No one wants to be audited by the IRS. Sometimes IRS audits are warranted and other times they simply happen to people who really didn’t deserve it. However, there are ways to minimize your risk of an IRS audit. Here are nine to keep in mind as you organize your finances and work with your CPA.
1. File Accurate Returns
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Renting out a vacation home can be a lucrative venture, but it comes with a complex set of tax rules that homeowners must navigate to remain compliant and maximize their financial benefits. Learn more about the essential aspects of vacation home rental rules, including clarity and guidance for prospective and current vacation home landlords.
Introduction to Vacation Home Rentals
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When traveling for business, understanding what constitutes allowable business deductions can significantly impact the financial health of your business. The Internal Revenue Service provides guidelines that help distinguish between personal and business expenses, ensuring taxpayers do not overstep boundaries while maximizing their deductible expenses.
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As a business owner, it’s likely that you have one or more vehicles that you use for business purposes, either full-time or part-time. The IRS offers business deductions for business vehicle use, but it’s important to know the rules, so you can get the most out of the potential deductions. Navigating the complexities of using vehicles for business purposes requires an understanding of best practices, tax implications, and meticulous record-keeping. Your CPA is the best source of information about business use of vehicles.
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Charitable giving not only supports those in need but also can provide financial benefits in the form of tax deductions. However, maximizing these benefits while staying compliant with IRS regulations requires careful planning and understanding. Learn how to best ensure you get full credit for your charitable donations, covering the importance of receipts, understanding what constitutes a charitable donation, and the various types of donations you can make.
Securing and Managing Donation Receipts
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More people are engaging in remote contract work than ever before. Remote contract work offers almost as many advantages to workers and companies as full-time employment. However, this sea change from traditional in-house work to remote contract positions not only alters the way work is done, but also affects both the tax obligations and opportunities for workers. The tax implications of remote contract work are complex, so the advice of a CPA is strongly recommended. In general, however, here is a broad outline of those implications.
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If you’re like many people, your parents probably taught you that debt is a good thing. Responsibly handling debt makes you a good credit risk, and a lender would be eager to loan to you. However, without judicious use of debt, it can quickly spiral into something much more sinister. Debt has a way of wrecking life plans from a variety of angles.
Student Debt
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Annuities aren’t such a modern concept as you might think. Although many people are just now hearing about annuities, they’ve been around as far back as the Roman Empire. Citizens of Rome would make a lump sum payment into what they called an “annua” fund. They would then receive a payment each year until death. In the Middle Ages, annuities were used to raise money to pay for wars. In the U.S., the Presbyterian Church used annuities starting in 1720 to fund retirement accounts for ministers and their family. As of 1812, annuities became available to the general public.
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By now, you may have already given up on some of your New Year’s resolutions. Making huge changes all at once is often too much to sustain. Experts have said that small changes, made consistently over longer periods of time, can be just as transformative—and easier to maintain—than trying to force yourself to change overnight. Of all your New Year’s resolutions, financial resolutions could be the most important for your long-term security. Whether or not the following resolutions made it onto your list, here are eight financial moves worth making in 2024.
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When considering the purchase of a vehicle, the debate between opting for a new or used car is a significant one, impacting various aspects of your finances. Cars, second only to houses in terms of big-ticket purchases, demand careful financial planning and consideration of how they fit into your budget. This article delves into the various financial implications of buying new versus used cars, examining aspects such as down payments, monthly payments, operating costs, and depreciation.
Down Payment
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Traveling can be an enriching experience, but it also exposes you to unique risks, especially regarding your digital and financial security. In an age where internet hackers, identity thieves, and skimming devices are increasingly prevalent, protecting your assets is more crucial than ever. This guide offers essential tips on how to shield yourself from these threats. From securing your internet connections in hotels to using RFID-blocking wallets, there are a range of actionable strategies you can use to protect yourself.
1. Secure Internet Connections
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High energy bills are a common frustration for many, straining household budgets and causing financial stress. The relentless rise in utility costs can feel overwhelming, particularly for families and individuals trying to balance their expenses in an increasingly costly living environment. This financial burden is not just about numbers on a bill; it affects daily life, sometimes forcing tough decisions between energy usage and other necessities.
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The financial side of an upcoming marriage isn’t romantic or swoon-worthy. But it’s something that must be considered and discussed in order to help ensure a smooth union for years to come. It’s not too hard; the practicalities of whether or not to mingle money after marriage can be taken care of swiftly so that the other, “fun” details of the pending nuptials can be focused on. The following pros and cons will serve as a helpful guide so that you and your intended can make an informed decision based on all the factors.
Pros of Merging Finances
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One of the misconceptions about CPAs is that they’re only for the wealthy. While it’s true that CPAs are often associated with high-net-worth individuals, it’s also true that anyone can use the services of a CPA. It’s not just the wealthy who need help with financial planning and tax strategies. In fact, CPAs can play a vital role in helping people from all walks of life to improve their financial situations.
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Does your money seem to shrink overnight? Do you make a decent salary but still can’t seem to make ends meet? Or is there just enough to pay the bills but never enough to tuck away into savings? You aren’t alone. The mystery of the missing dollars is something that a lot of people are dealing with these days. If you’re living paycheck to paycheck with never a dime left over to get ahead in life, it’s time to take a close look at where your money is really going and why.
Possible Reasons Why You’re Living Paycheck to Paycheck
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Inflation is a mystery for many. Unless you’re an economist, this economic phenomenon is elusive and mysterious. It’s also something that we have no control over. Yet, it wields an undeniable, powerful force over your finances. Because of this, it pays to try to understand what inflation is and its impact on your money.
What is Inflation?
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The key to building a secure financial future is as much about knowledge as it is about having a lot of money. Lots of people with tons of money have squandered it away because they were financially illiterate. Many with very little have lifted themselves out of poverty by learning as much as they could about money and business matters. Whether you’re just starting out or trying to turn bad finances around, here are some of the basics you should know.
Start Saving as Soon as You Start Earning
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People can have strange relationships with money. For some, it’s a powerful tool to get what they need. For others, it’s a necessary evil; something they have to contend with to live in this world. Some people want to accumulate as much money as possible; others believe that wealthy people must have done something bad to get where they are. The psychology of money and our relationship to it isn’t just fiction. It’s a genuine field of study called Behavioral Economics.
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Millennials are in a good position to achieve financial freedom. There are more opportunities than ever to make a good living, live debt-free and earn financial success. There are mistakes to avoid along the way, too. These tips for achieving financial freedom will help you to make all the right money moves.
Avoid Debt
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One of the newest commodities that people are trading these days is digital assets. Digital assets may be images, videos, documents, cryptocurrency, software and more. Due to the digital nature of these assets, they can be a challenge to manage and track. Here are some best practices to keep your digital assets safe, organized and in compliance with the law.
Use a Digital Asset Management System
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There’s a long-standing tradition of businesses giving Christmas bonuses to loyal employees. Each year, employees eagerly await these bonuses, trying to guess how much they will be, when they’ll be handed out and fantasizing about how they’ll spend it. Whether it’s a large corporation, a medium-sized company or a small business, at this point, it’s almost expected that Christmas bonuses will be given. It’s so commonplace that movies have been made around the premise, the most well-known being “National Lampoon’s Christmas Vacation,” with Chevy Chase and Randy Quaid.
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Starting and running a business is both an exhilarating and demanding endeavor. It involves not only your professional aspirations but also your financial investments. For many small business owners, the business itself becomes an integral part of their lives. Many entrepreneurs initially start by themselves, with no special plan to take on a business partner in the future. But as time passes, it often becomes preferable or even necessary to consider bringing in another professional to help run or grow the business.
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As the seasons change, so do the fortunes of many businesses. Whether it's a cozy winter wonderland attracting skiers, a vibrant summer resort beckoning beachgoers, or a bustling holiday season for retailers, seasonal businesses face unique challenges and opportunities. It takes a lot of planning and experience to navigate the waters of seasonal business trends. Here are some tips for preparing for the busy months.
Harnessing Customer Insights for Personalization
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Cash bonuses have traditionally been used to reward employee performance, communicate the value of an employee, recognize, support employee loyalty and more. But many business owners—particularly small ones—may not have the cash needed to hand out bonus checks. Given the complexities of business operations, combined with the challenging economic climate, cash bonuses may simply not be a viable option. If you’re a business owner starting to look ahead at ways to reward employees, here are some creative alternatives to cash bonuses to consider.
Flexible Working Arrangements
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Decluttering has become popular, based in part on the now famous teachings of Marie Kondo, and in part on the minimalist lifestyle movement. But you don’t need to be part of a cultural trend to want to get rid of things you no longer use. People have been selling unused items in one form or another since civilization began. In your lifetime, you may have driven past untold numbers of garage sales and flea markets. Online selling is an iteration of those platforms, where people can sell unused items and put a little cash in their pockets.
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Caring for a loved one with dementia is a profound emotional experience. The gradual loss of memory, personality changes, and the increasing need for constant care can be overwhelming. It's a time of sorrow, frustration, and often, financial strain. The emotional toll is heavy, and the financial implications can add to the burden. But understanding the available support, both emotional and financial, can make this journey a little easier.
Financial Challenges and Tax Considerations
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Health Savings Accounts, or HSAs, are specialized accounts designed to help individuals save money for medical expenses. These accounts offer unique tax benefits and are frequently linked to high-deductible health plans (HDHPs). They offer a unique blend of tax benefits, investment opportunities, and spending flexibility, all tailored to healthcare needs. The concept of HSAs transcends traditional savings accounts, providing a multifaceted approach to healthcare financing.
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Every day, scammers are concocting new ways of trying to separate you from your money. It seems with every new security measure, a new way of getting around it is invented. Since nearly everyone is online these days, the vulnerability risk is high. Take a look at five of the latest money scams, and you’ll get a sense of how incredibly sneaky they can be.
1. Charitable Giving Scams
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The average American has about $65,000 in savings, according to a recent poll. But if that’s the average, that means that a great number of people have much less; maybe more in the neighborhood of a few thousand or even less than that. The recent pandemic certainly wreaked havoc with people’s savings, of course.
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If you’re a business or self-employed, you have to deal with estimated tax payments. These are used to pay alternative minimum tax, income tax and self-employment tax. Many people find estimated tax payments to be a nuisance, and they wonder if they are mandatory. The fact is, the IRS is within its rights to penalize taxpayers who miss estimated tax payments, so it’s worth the time to fully understand what estimated tax payments are, and your obligations for payment.
What Are Estimated Tax Payments?
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