Taxpayers know that there are tax deductions out there to be utilized to reduce the taxes paid on your income. Most are aware of the common deductions, but there are many deductions that simply get overlooked by most taxpayers.
Gifts to charity is a good place to start. Most taxpayers know that when you give a gift of money or items to a qualified charity, you can deduct the value of this gift, with proper documentation. One common item that gets missed is the miles that you drove or out-of-pocket expenses you paid for the charities benefit.
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Now that tax season is here, the early indications of the effects the 2017 Tax Reform are starting to show. While fewer people have filed their returns than this time period in past years, the data is showing that more and more Americans are seeing lower refunds than in years past. Many taxpayers did not understanding the full implications of the tax reform and failed to make the proper changes. Since we are still relatively early in the year, now is the time to review those possible changes for 2019.
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We often think that having a home in multiple states is a great idea, and sometimes we contemplate working while traveling between these homes. In some cases, our jobs take us to multiple locations. What happens when we work in multiple states throughout the year?
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The Tax Cuts and Jobs Act of 2017 has led to changes in the way companies choose to be taxed. Prior to the tax reform, many businesses were required to use the accrual method of accounting. But with the change in tax law, businesses with $25 million or less in annual revenue over the prior three years can use the cash method. More businesses are choosing the cash method of accounting instead of the previous accrual method, but what is the difference between cash and accrual methods of accounting?
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In recent years, the economy has been having its share of ups and downs. When businesses and private citizens want to secure financing from financial institutions to make large purchases, the economy can greatly influence the bank’s willingness to loan funds. In an unknown or down-turned economy, the installment sale lends itself as a great alternative option. An installment sale occurs when property is sold with at least one payment being made in the year of the sale, and at least one payment being made in the tax year after the sale is completed. Generally, the buyer will make regular
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Most of the time, children are considered to be an extension of their parents when it comes to legal application until the age of majority. Therefore, many taxpayers are surprised to learn their child is a separate taxpayer, even as a minor. If your child has enough income, he or she has an obligation to file a return and pay the tax. In some cases, you may include their income on your tax return; in others, they'll have to file their own tax return, or you will have to file a separate return on their behalf. Whether this is required depends on both the amount and source of the minor's
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“You should sell those.” It’s a phrase many people have heard when showing someone their crafts. When does a hobby become a business? Is it when you first start selling your items? Is it when you first turn a profit? When can you start deducting expenses against the income?
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In recent years, raising money online through third-party backers, or crowdfunding, has grown in popularity. Originally utilized mostly by musicians, filmmakers and for other creative endeavors, it has now become a more widespread method of raising money for a trip, medical expense, or startup, and is often a quicker and easier alternative than conventional fundraising. Often the creator of a campaign puts little thought to the tax ramifications before launching and collecting the funds. With this increase in utilization, the business of its taxation has become an increasing question. W
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With the close of 2018, we begin to look ahead to 2019 and ensuring that we set ourselves up for a good tax outcome at year end. There are many things to consider as you move through the tax year and some require pre-planning to ensure maximum benefit.
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Vehicle purchases are one of the largest expenses for most families. With an increase in people choosing to lease instead of buy, what are the differences? As with most decisions in life, taxes should only be one of the considerations. A few of the non-tax considerations on buying or leasing a business vehicle: number of miles you drive each year, how long you keep a car, how much do you want to spend on your monthly payments?
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For most standard wage earners, preparing for your tax filing is fairly simple. You receive a Form W2 in the mail and unless you have other rental properties or other complications, your return is relatively straightforward. But for the freelancer, things aren’t quite as simple.
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In 1993, then President Bill Clinton sought to find a support system to aid the rapid growth in the workforce, which was increasingly made up of women with families. The Family and Medical Leave Act (FMLA) was passed “to balance the demands of the workplace with the needs of families.” This Act allowed both women and men to participate in work, but also protect them if a medical need arose. Under this Federal Act, employers with fifty of more employees were required to provide up to twelve weeks to attend to seri
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With the introduction of the Tax Cuts and Jobs Act, many taxpayers are wondering how it will affect the tax deductibility of their medical items – like insurance. Largely, the new tax bill has left these deduction as they were, albeit perhaps harder to take the itemized deductions
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When most of us think about running our business, we think about the fun things like product development, marketing and customer outreach. For most business owners, the idea of accounting is, to say the least, not exciting. We know we need it, and moreover, we love to do everything ourselves. But at the end of the day.
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You had a great idea and now you’ve put it in motion as a business. And while income recognition is easy to determine, qualified business deductions can be a bit harder. So… what are the most common tax deductions for small businesses?
Any materials you utilize for marketing your business and the cost of developing these can be deductible. This can be advertisements in print or media, brochures, branded promo items, events or trade shows. Non-branded gift cannot be deducted.
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It used to be that the term “Section 1031 Exchange” or even “Like-Kind Exchange” was uncommon except in certain circles. But as the idea of tax strategies have reached more and more taxpayers coupled with the housing market’s fluctuation in recent years, 1031s have become increasingly commonplace.
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We’ve all heard it before. That voice on the other end of the line that states that she or he is from the United States Treasury Department and you have an unpaid debt that needs to be settled, or else … With the reduction in their workforce, the Internal Revenue Service has been authorized to utilize private debt collectors. This has further complicated authenticity protocols for the taxpayer. As tax season comes to a close, the increase in scams is well documented. It is important to know what the Internal Revenue Service will and will not do if you do in fact owe a debt.
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As the holidays near, more and more shoppers are turning to online methods of procuring that special gift. And it makes complete sense. The world of e-commerce opens the buyer up to products that may be unavailable in the local area, and it’s often cost-efficient. With this massive turn in consumer spending, tax systems are struggling to keep up. By now most taxpayers have heard of the South Dakota v.
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Small business ownership is a good way to take more control of your time and puts more money in your pocket. But what is the true cost of small business ownership? Surprisingly, many small business owners are faced with many challenges that may leave them with less time and less money than when they were earning a living working for someone else.
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Before the Tax Cuts and Jobs Act of 2017 bill was passed, buying a home was a big incentive to taxpayers looking to reduce their annual taxes. While some states do have a benefit calculation on rental costs, and home office users can add rental costs to their expenses, for most taxpayers the tax breaks received on the real estate taxes and mortgage interest you pay through homeownership were far more beneficial than renting. In addition, building equity in your home for possible use later was a nice add
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Most of us have heard of the term Alternative Minimum Tax, Alt Min Tax, or AMT. But what is it? Alternative Minimum Tax is a tax system that parallels the standard tax systems and adds an additional level of taxation to baseline income tax for certain individuals, corporations, estates and trust. Traditional tax is adjusted for certain items and computed differently for AMT. Some of these items are depreciation, medical expenses, state taxes, certain mortgage interest, real estate and personal property taxes. AMT was first introduced in 1969 when Congressed determined that a portion of
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While alternative education paths are on the rise, a traditional education track is still the most readily available to most high school graduating classes. However, college, professional, and graduate schools are more costly than ever. The cost of higher education surged more than five hundred percent since 1985. In fact, higher education costs more than four times the amount it did thirty years ago. Financial challenges are one of the largest qualifiers for non-completion of higher education. Those lacking a financial cushion and even those with financial assistance, can easily find
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When most people think of foreign accounts, they think of ex-pat living overseas and utilizing banks for the accumulation of their payments. However, many taxpayers may also be subject to the federal Foreign Bank and Financial Accounts or FBAR reporting without realizing it. The United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) 114 form is filed alongside taxpayers’ federal tax return and reports information for those
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As technologies advance and real estate costs increase, more and more companies are moving towards allowing workers to telecommute. With the advantages of having remote employees, comes the question of how these employees interact with the company resources. While many companies choose to provide workers with computers and cellular phones, technology allowances have also become a method by which companies request that the employee provide his or her own technology. Additionally, many workers prefer to utilize their own devices for work, even if the company does not provide reimbursement.
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With the change in the season and the return of fall, many people begin the act of making their homes less cluttered, and we will all begin to get donation requests in the mail. As the weather cools, we tend to turn an eye towards end of year tax moves as well. The Tax Cuts and Jobs Act of 2017 brought about many changes in how businesses and individuals are going to operate starting for 2018 onward. With the deviations to the itemized deductions that we are all so used to, rethinking your charitable giving is a must.
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Until the inception of the Tax Cuts and Jobs Act, entity selection by businesses was a fairly easy decision. In most cases, businesses chose a form of pass-through entity, given the high tax rate of thirty-five percent given to C corporations in the past. With the new changes brought forth in TCJA, and the lower tax rate of twenty-one percent, change is in the air. But what are the benefits of considering C corporation status? Unless you are a very large company, determining if you should change
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When we are working, taxes are a part of daily life and influence the considerations that we take in our spending habits. Once we start thinking about retiring, we often forget to add in taxes as a component to our thought process. It is important to understand your tax situation in retirement prior to retiring so that you will be ready when the time comes to pay on the taxes due.
1. Social Security
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We’ve all thought it… Sitting on the beach in a tropical place while attending a quick meeting via your laptop before hitting the waves in the afternoon sun. Many people imagine that all they must do is get a work Visa, wave good-bye to family and friends and head to sunnier shores for a bit. Before you jump ship, or hop a plane, there are important tax items to take into consideration. The Internal Revenue Service will not ignore you just because you live in a remote village on a Fijian island. United States citizens (and resident aliens) for the most part, are subject to federal inco
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The Tax Reform Act of 1986 first brought about the concept of taxation on the investment and unearned income for those individuals over thirteen and under seventeen years of age. It is commonly known as the “Kiddie Tax.” Originally the law only covered children over fourteen, as children under that age cannot legally work. This meant that any income of a child under fourteen was derived from dividends or interest from bonds. More recently, the age limits were revised to include children who hadn’t reached
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One of the major complications facing aging individuals is the passing down of wealth to the next generation without creating large tax implications. The dynasty trust is a straightforward estate planning technique that can substantially reduce taxes.
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