Ideas to help manage and save money on the income tax you must pay.
The "baby boomers," Americans born between 1946 and 1966, are moving like a wave into their fifties and sixties. Unfortunately, between helping kids and parents, many of them are facing new financial pressures.
With a little discipline you can ensure that the qualified miles you drive for business, charity, moving and medical reasons can be deducted on your tax return.
Over the past few years, the IRS has started penalizing late filers of Sub S Corporation tax returns. This despite the fact that late filing of the Sub S tax return does not typically impact the timely payment of the tax.
Time to buy school supplies? Pay for field trips? Is any of this tax deductible? Here are some ideas to find a tax break in the back to school rush.
If you're going through a divorce, taxes may be the last thing on your mind. But divorce involves many potential tax traps and pitfalls. Here are some things to watch out for. Alimony and child support. Alimony is taxable income to the person who receives it and deductible by the person who pays it,...
Are you planning to use your vacation home soon? If you're not going to use it, have you considered renting it? Here are some great ways to enjoy tax savings through use of a vacation home.
Be aware that important tax consequences are often associated with some fairly common events involving your home.
Moving is expensive, but if you maintain good records, you may be able to recover some of those costs through tax benefits.
These days, charities need your support more than ever. As you lend a helping hand, keep the following tax facts in mind.
Receiving a gift is not a taxable event to the one who receives the gift. If the gift is large enough, it could result in gift tax being due by the donor. Here is what you need to know.
You are allowed a deduction for each dependent on your tax return, but only if you qualify. Here are the tests you need to pass.
Couples often enter into marriage without ever having had a serious discussion about financial issues. As a result, they find themselves frequently arguing about money. If you are planning a wedding, here are some steps you can take to get your marriage off to a good financial start.
When natural disasters occur, they often leave many people with severely damaged or destroyed homes and businesses. Some lose everything they own. If you are affected by a disaster that is declared by the President to qualify for federal assistance, there are several provisions in the tax law that may help.
Read on for some easy to implement tax saving ideas.
The death of a loved one is a stressful event. In addition to the emotional turmoil, survivors must deal with a number of financial and tax issues, some of them mundane and some quite complex. Here's a quick guide to help you through this difficult time.
Here's an overview of the many ways that taxes can affect your decisions as a parent.
Oops, there is a mistake on your tax return. How do I amend my return?
Your home. Your office. Are they one and the same? If so, you may be able to take a home-office deduction that can save income and self-employment taxes.
If you're like some taxpayers, you have a pastime that brings in cash but produces a loss after you deduct your expenses. The tax code creates disadvantages for hobbies over businesses. Here is what you need to know.
When big things happen in your life, the tax code is rarely far behind. This is especially true when there is a new birth in the family. Here are some tips.
There are special tax benefits to members of the U.S. Armed Forces. If you or someone you know is in the military, prior to filing a tax return it makes sense to review your situation. Outlined here are some of the more common items that may be excluded from your taxable income.
If you recently got married, plan to get married or know someone who is taking the matrimonial plunge, here are some important tax tips every new bride and groom should know.
Alimony is both income and a non-deductible expense. When handled correctly there are no problems. When handled incorrectly you could quickly find yourself in a complicated tax mess. This is especially true since if the IRS looks at your situation they often look at both involved taxpayers.
On August 29th, the IRS issued IR 2013-72 that implements federal tax outcomes from the June 26 Supreme Court decision regarding the Defense of Marriage Act. Here is what you need to know.
The tax laws are complex, and they change every year. Here are some suggestions that can help make filing your tax return an easier task.
Tax law changes so frequently that you must be concerned with tax planning year-round, or you'll miss opportunities to lower your tax bill. Here are some of the more common areas that can reduce your tax bill.
Although the child tax credit is simple in concept, it's actually quite complicated in application. Here is what you need to know.
Some popular tax preparation software is relatively inexpensive, but what does using software to prepare your taxes really cost you?
What should parents teach their teenagers about finances? How can you help them avoid the lure of easy credit and overspending? Here are some ideas.
Are you getting the tax break you deserve? Most taxpayers often overlook and under-report their contributions on their tax return. And the Treasury Department is not looking to help ensure you are fully reporting your charitable giving. So what can you do...
Use the following financial checklist if you find yourself considering divorce. This list is not all-inclusive and is no substitute for the professional assistance of your accountant and attorney.
If you are searching for a new job in your present line of work, your job hunting expenses may be tax deductible. This is what you need to know.
Here is a simple idea to avoid late payment penalties if you miss a quarterly estimated tax payment (form 1040 ES). While it might not apply to everyone, it could save you some money come tax time.
Home equity debt is often seen as a nice way to deduct interest on your tax return. But if not fully understood, what you thought would be a nice itemized deduction could result in a surprise increase in your annual tax bill.
There is a fairly large tax exclusion on the gains made when selling your main home. While the gain may be large enough to avoid worrying about the tax consequences, if done wrong you could be saddled with a large tax bill. Here is what you need to know.
Do you have a home office? Are you interested in saving time filing keeping track of your expenses? A safe-harbor rule might just make tracking your home office expenses a lot easier.
With all the new tax changes taking place this year, it is more important than ever to make quarterly estimated tax payments to avoid potential penalties.
Effectively using your investment losses can make a big impact in your taxable income. These losses could offset income that is barely taxed, or it could offset income taxed at 39.6% or higher! Here are some ideas to make those losers into winners on your tax return.
If you are starting a job with tips involved, you will want to read this.
Military personnel and those that support them have a number of special provisions built into the tax code just for them. If they apply to you, there may be some tax savings in your future.
Did you know you can rent out your home or vacation property for up to 14 days and not need to claim the income? Here are some tax tips to take advantage of this opportunity.
In some rare cases, making a tax savings move can benefit you in more than one way. This is the case with direct contribution of qualified investments, such as stock, owned more than one year that have appreciated in value.
It's your lucky day. You just won $5,000. Are you prepared for the tax event to follow? Here are some things to think about.
There are certain areas of the tax code that the IRS wishes to focus its auditors' attention. These areas are typically identified by the IRS development of an Audit Technique Guideline to train its staff. Here are some key audit areas of interest.
Avoid Common Tax Filing Mistakes Want to ensure your refund gets to you in the shortest amount of time? Want to avoid a letter from the IRS? Here are some of the most common tax filing mistakes.
Retaining copies of your federal tax return is important. Not only will you need the return in case of audit, but the tax return is often used to secure student aid, obtain loans, purchase a home or business, plus much more. What can you do if you cannot find a copy of your tax return?
If you used the Premium Tax Credit and wish to continue using the credit you must file your tax returns as soon as possible. Here is recap of the IRS notice.
Roth IRA or Traditional IRA? The answer is never easy, but perhaps asking the right questions can make your decision easier. Here are some thoughts.
Long-term care insurance has the same tax-favored status as regular health insurance. With the high cost of assisted living and nursing homes, this insurance product is becoming more popular. Is it right for you?
One of the most challenging questions concerning Roth IRAs is whether or not you should convert your existing IRA to a Roth IRA. Here on some thoughts on the matter.
You may have considered an individual retirement account (IRA) at some time in the past. But perhaps you didn't qualify for tax-deductible contributions, or you couldn't contribute much because you were a stay-at-home spouse. It might be time for another review.
Looking for a last minute way to reduce last year's taxable income? Consider funding a Traditional IRA or Roth IRA. Here is what you need to know.
Want to reduce your taxable income using a tax deferred contribution to an IRA but don't have the funds to do so? If you expect a tax refund, here is a technique that may help.
Most tax beneficial retirement accounts limit your ability to contribute to them after you reach age 70 1/2. But there are exceptions. Consider these account options if you wish contribution flexibility as you get older.
Each year select clients must withdraw minimim amounts from their qualified retirement plans. If you don't the penalty is a severe 50% in addition to paying regular income tax on the withdrawal. Don't let this happen to you.
With rapidly increasing costs in both health care and in college tuition, deciding which is more important can be a real dilemna. Here are some thoughts.
The tax code is long and complicated. And, unfortunately, inconsistent on how it handles similar provisions. This is especially true when it comes to early distributions from retirement plans.
While it is not a good idea to tap retirement accounts prior to retirement age, sometimes it cannot be avoided. What can often be avoided, however, is the punitive 10% penalty for early fund distributions. Outlined here are exceptions to the 10% penalty rule for Traditional IRAs.
If the alimony you paid does not match the alimony income reported by the person who received the funds you can expect more attention from the IRS. A lot more attention. Here is what is happening.
A big surprise can occur when you see your Social Security Retirement Benefits being subject to income tax. This "tax torpedo" is often triggered by Retirement Account distributions. Are you prepared for this?
Determining the value of items on your tax return is always open to interpretation. You do not want that to happen to you during an audit as it can lead to additional tax and penalties. Here are some tips to help defend your Fair Market Value (FMV) determinations.
The "tax gap" is a concept developed by the Internal Revenue Service to measure voluntary compliance with the tax laws by taxpayers. Here are some current figures.
In 1986, a tax law was introduced to block parents from transfering investments to their children as a technique to lower their taxes. This law, commonly known as the kiddie tax, ensures that this unearned incomeis taxed at a parent's, usually higher, tax rate. But there is still a tax planning opportunity.
What is the difference between a Marginal Tax Rate and an Effective Tax rate? Who cares? You might if you add a second job and see some of your tax benefits disappear. Here is what you need to know.
The IRS wants all of us to capture bartering activity as income. Is it really that simple? Here are some tips.
Deduct this or take a credit? Which is worth more to you? Often the answer is not as simple as you think.
There are many ways to save for college, but one thing is certain: it is never too early to start. Should you consider a 529 college saving plan?
The Earned Income Credit is one of the most common ways Americans reduce their tax bill. Yet per the IRS, 1 out of 5 people who could qualify for the credit do not file for it. Here are answers to some common questions.
Adjusted Gross Income (AGI) is a central term in the IRS vocabulary. Can you provide a working definition of the term? Doing so is often the starting point for effective tax planning.
As you receive informational tax forms like W-2s and 1099s, you will want to make sure they are correct and received on a timely basis. Here are some tips to make this part of your tax filing experience smooth.
Year end moves by mutual fund managers often causes tax obligations for their fund owners. These surprises come in the form of 1099 DIV and 1099 B forms. Here are some ideas to help manage the problem.
Have you recently married, divorced, or lost a spouse? A change in marital status should prompt a review of financial matters, but at such a time it is easy to overlook the details. Here are a few reminders and suggestions.
Your ex filed a tax return, didn't pay the tax, and left you holding the bag. Unfair! There may be relief, but only if you know the innocent spouse rules.
Taking valid deductions on your tax return is your right. Defending your deductions is becoming harder and harder to do. Read this to make sure your deductions rule the day.
Frequent tax law changes have made the tax code very complicated; only the informed taxpayer can take advantage of tax-cutting opportunities that remain. Here are some suggestions you should consider if you're interested in cutting your taxes.
If you donate a used vehicle to charity, you are allowed to take a tax deduction for your generosity as an itemized deduction. Determining the amount you can deduct is not as simple as you might think.
How can something so simple be made so complex? Here is what you know so that you file your tax return on time.
In 2016, tax return filing deadlines are changing for some. If you have foreign bank accounts, expect to receive a Form K-1 from a partnership or LLC, or participate within a C-corporation you will need to know this information
As part of recent tax legislation, the IRS is now mandated to delay sending out some refunds to taxpayers beginning with 2016 tax returns. If impacted, you will need to plan for this delay.
Tax credits are one of the most powerful ways to lower your income taxes. A tax credit reduces your tax bill dollar for dollar. A tax deduction, on the other hand, only reduces your taxable income, so your benefit is determined by your tax bracket...
The earlier the better when it comes to adopting a strategy to reduce your taxes. But even if time gets away from you, there are some year-end actions you can take to cut your taxes. Here are some last-minute tax cutters you might consider.
Parents facing college expenses have several provisions in the tax law to consider. The benefits don't apply to all, but there is something of interest for many families.
Health savings accounts can be used to build tax-sheltered nest eggs that can pay out-of-pocket medical expenses with tax-free dollars. Here is how you can take advantage of this tax opportunity.
In your tax planning, don't overlook how your tax-saving strategies might be affected by the alternative minimum tax. Here is what everyone should know.
If you want certain individuals to receive property from your estate, there may be advantages to making those gifts while you are still alive. Consider these facts about making lifetime gifts.
Don't ignore the impact of taxes on your investments. While taxes should not drive your investment strategy, understanding how taxes affect your earnings will help you minimize taxes and maximize your return.
Five last-minute tax savings ideas.
With the re-introduction of the itemized deduction phase-out, does it still make sense to contribute to charities? For most taxpayers, the answer is a resounding yes. Here is what you need to know.
If you own a home you probably itemize your deductions on your tax return. But what if you do not itemize? Can someone using the standard deduction still get a tax break?
Many famous taxpayers have been caught in an oft overlooked part of the tax code; household employees. The commonly referred "nanny tax" can be an expensive audit finding if not handled correctly. This is what you need to know.
Every year thousands of taxpayers go through a "gotcha" with the IRS. A large, unexpected tax bill. Here are five common causes of tax surprises from lost refunds to retirement plan mistakes.
The progressive nature of income tax rates offers taxpayers the incentive to transfer assets to lower earning taxpayers. Why not your children? Here are some tips.
What you need to know to ensure your allowable business, charitable and medical miles are not dismissed during an audit.
Yes Virginia, there is a Santa Claus. There is also a lot of income that the IRS does not tax. Here are a few of the more common...
Re-balancing your portfolio when you get older makes sense. So does anticipating for these possible tax surprises during your retirement years.
Few things are more unnerving than having your tax return selected for an IRS audit. Here is what everyone should know.
The $4,000 tuition and fees deduction students have relied on in past years is no longer available. The good news is that there are alternatives.
All too often taxpayers take action that will cost them dearly when they file their tax return. With a little planning, the IRS will receive their fair share, but not a dollar more, due to ingnorance of tax laws.
If you recently changed your name due to marriage or divorce, do not get caught in the nightmare of a rejected or changed tax return by the IRS.
Tax reform was passed by Congress this week and is expected to be signed into law soon. Most of the new laws take effect for the 2018 and 2019 tax years, but there are a couple items that you need to know about right away for your 2017 taxes.
The ever-popular Health Savings Accounts (HSA) limits are set for 2018. The new limits increase the amounts you can save and pay for qualified medical expenses with pre-tax dollars.
The Healthcare Marketplace allows open enrollment each year to obtain health insurance. If eligible, you may also receive a reduction in your insurance premium by use of a Premium Tax Credit. Should you apply the credit now or wait and receive the credit on your tax return? Here is what you need to know.
The tax law provides a valuable tax-saving opportunity to business owners and real estate investors who want to sell property and acquire similar property at about the same time.
Employees' ability to deduct unreimbursed expenses related to their job is going away under the new tax reform laws. Employers can consider reimbursing employees directly and deducting the cost from their business returns.
A good way to create years of correspondence with the IRS is to cash a check received that does not match the amount you expect. When errors occur it can take time to straighten out the error.
Often a tax surprise occurs when selling your home. The possibility of capital gains tax should be understood before selling your residence. Here is a summary of the rules.
When does a tax benefit not become a tax benefit? When you assume you no longer need to keep track of something. This is the case with the home gain exclusion.
The IRS recently announced its outside collection agencies are now actively collecting past due tax bills. This will impact all of us. Here is what you need to know.
One of the worst surprises you can have at tax time is discovering a dependent files their own tax return. It can create a tax filing mess. Here's why.
Suppose you retire in a new state with warm weather and lower taxes. If you keep a part-time home in your original state or you later decide to return, you could have a tax problem. Here are some tips to help you stay on the right side of the state taxman.
Questions about your financial situation? Contact us!
This publication provides summary information regarding the subject matter at time of publishing.
Please call with any questions on how this information may impact your situation. This material may not be
published, rewritten or redistributed without permission, except as noted here. This publication includes,
or may include, links to third party internet web sites controlled and maintained by others. When accessing
these links the user leaves this web page. These links are included solely for the convenience of users and
their presence does not constitute any endorsement of the websites linked or referred to nor does
William L. DeSouchet, CPA have any control over, or responsibility for, the content of any such websites.
© 2018 All rights reserved.