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The nanny tax: What household employers need to know
The nanny tax: What household employers need to know Hiring household help, whether you employ a nanny, housekeeper or gardener, can significantly ease the burden of childcare and daily chores. However, as a household employer, it’s critical to understand your tax...
Make year-end tax planning moves before it’s too late!
Make year-end tax planning moves before it’s too late! With the arrival of fall, it’s an ideal time to begin implementing strategies that could reduce your tax burden for both this year and next. One of the first planning steps is to ascertain whether you’ll take the...
Understanding the $7,500 federal tax credit for buying an electric vehicle
Understanding the $7,500 federal tax credit for buying an electric vehicle Electric vehicles (EVs) have become increasingly popular. According to Kelley Blue Book estimates, the EV share of the vehicle market in the U.S. was 7.6% in 2023, up from 5.9% in 2022. To...
Are you liable for two additional taxes on your income?
Having a high income may mean you owe two extra taxes: the 3.8% net investment income tax (NIIT) and a 0.9% additional Medicare tax on wage and self-employment income. Let’s take a look at these taxes and what they could mean for you. 1. The NIIT In addition to income...
Six tax issues to consider if you’re getting divorced
Divorce entails difficult personal issues, and taxes are probably the farthest thing from your mind. However, several tax concerns may need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are...
What might be ahead as many tax provisions are scheduled to expire?
Buckle up, America: Major tax changes are on the horizon. The reason has to do with tax law and the upcoming elections. Our current situation The Tax Cuts and Jobs Act (TCJA), which generally took effect in 2018, made sweeping changes. Many of its provisions are set...
Certain charitable donations allow you to avoid taxable IRA withdrawals
If you’re a philanthropic individual who is also obligated to take required minimum distributions (RMDs) from a traditional IRA, you may want to consider a tax-saving strategy. It involves making a qualified charitable distribution (QCD). How it works To reap the...
The tax consequences of selling mutual funds
Do you invest in mutual funds or are you interested in putting some money into them? If so, you’re part of a large group. According to the Investment Company Institute, 116 million individual U.S. investors owned mutual funds in 2023. But despite their widespread use,...
You may be entitled to tax breaks if caring for an elderly relative
There are many rewards for taking care of an elderly relative. They may include feeling needed, making a difference in the person’s life and allowing the person to receive quality care. In addition, you could also be eligible for tax breaks. Here’s a rundown of four...
Pay attention to the tax rules if you turn a hobby into a business
Many people dream of turning a hobby into a regular business. Perhaps you enjoy boating and would like to open a charter fishing business. Or maybe you’d like to turn your sewing or photography skills into an income-producing business. You probably won’t have any tax...
Taxes when you sell an appreciated vacation home
Vacation homes in upscale areas may be worth way more than owners paid for them. That’s great, but what about taxes? Here are three scenarios to illustrate the federal income tax issues you face when selling an appreciated vacation home.
The tax deadline is almost here: File for an extension if you’re not ready
The April 15 tax filing deadline is right around the corner. However, you might not be ready to file. Sometimes, it’s not possible to gather your tax information by the due date. If you need more time, you should file for an extension on Form 4868. An extension will...
How renting out a vacation property will affect your taxes
Are you dreaming of buying a vacation beach home, lakefront cottage or ski chalet? Or perhaps you’re fortunate enough to already own a vacation home. In either case, you may wonder about the tax implications of renting it out for part of the year. Count the days The...
New option for unused funds in a 529 college savings plan
With the high cost of college, many parents begin saving with 529 plans when their children are babies. Contributions to these plans aren’t tax deductible, but they grow tax deferred. Earnings used to pay qualified education expenses can be withdrawn tax-free....
Get ready for the 2023 gift tax return deadline
Did you make large gifts to your children, grandchildren or others last year? If so, it’s important to determine if you’re required to file a 2023 gift tax return. In some cases, it might be beneficial to file one — even if it’s...
If you gave to charity in 2023, check to see that you have substantiation
Did you donate to charity last year? Acknowledgment letters from the charities you gave to may have already shown up in your mailbox. But if you don’t receive such a letter, can you still claim a deduction for the gift on your 2023 income tax return? It depends. What...
IRAs: Build a tax-favored retirement nest egg
Although traditional IRAs and Roth IRAs have been around for decades, the rules involved have changed many times. The Secure 2.0 law, which was enacted at the end of 2022, brought even more changes that made IRAs more advantageous for many taxpayers. What hasn’t...
Answers to your tax season questions
The IRS announced it will open the 2024 income tax return filing season on January 29. That’s when the tax agency will begin accepting and processing 2023 tax year returns. Here are answers to seven tax season questions we receive at this time of year. 1.What are this...
Don’t overlook taxes when contemplating a move to another state
When you retire, you may think about moving to another state — perhaps because the weather is more temperate or because you want to be closer to family members. Don’t forget to factor state and local taxes into the equation. Establishing residency for state tax...
IMPORTANT TIME SENSITIVE NOTIFICATION REGARDING THE 2024 CORPORATE TRANSPARENCY ACT (CTA)
A new reporting rule goes into effect on January 1, 2024 requiring the filing of a special form directly online with the Financial Crimes Enforcement Network. Single member LLC’s (even if filing Schedule C), multi-member LLC’s, S Corporations and C Corporations that...
Don’t forget to empty out your flexible spending account
If you have a tax-saving flexible spending account (FSA) with your employer to help pay for health or dependent care expenses, there’s an important date coming up. You may have to use the money in the account by year-end or you’ll lose it (unless your employer has a...
Contributing to your employer’s 401(k) plan: How it works
If you’re fortunate to have an employer that offers a 401(k) plan, and you don’t contribute to it, you may wonder if you should participate. In general, it’s a great tax and retirement saving deal! These plans help an employee accumulate a retirement nest egg on a...
Facing a future emergency? Two new tax provisions may soon provide relief
Perhaps you’ve been in this situation before: You have a financial emergency and need to get your hands on some cash. You consider taking money out of a traditional IRA or 401(k) account but if you’re under age 59½, such distributions are not only taxable but also are...
Casualty loss tax deductions may help disaster victims in certain cases
Casualty loss tax deductions may help disaster victims in certain cases This year, many Americans have been victimized by wildfires, severe storms, flooding, tornadoes and other disasters. No matter where you live, unexpected disasters may cause damage to your home or...
What are the tax implications of winning money or valuable prizes?
What are the tax implications of winning money or valuable prizes? If you gamble or buy lottery tickets and you’re lucky enough to win, congratulations! After you celebrate, be aware that there are tax consequences attached to your good fortune. Winning at gambling...
Investment swings: What’s the tax impact?
Investment swings: What’s the tax impact? If your investments have fluctuated wildly this year, you may have already recognized some significant gains and losses. But nothing is decided tax-wise until year end when the final results of your trades will reveal your...
Know the Signs of an Employee Retention Credit Scam
Know the Signs of an Employee Retention Credit Scam If it sounds too good to be true, it probably is. The IRS has sounded the alarm repeatedly regarding a scam involving the Employee Retention Credit (ERC). Third parties have been aggressively promoting that...
Can you deduct student loan interest on your tax return?
Can you deduct student loan interest on your tax return? The federal student loan “pause” is coming to an end on August 31 after more than three years. If you have student loan debt, you may wonder whether you can deduct the interest you pay on your tax return. The...
Pocket a tax break for making energy-efficient home improvements
Pocket a tax break for making energy-efficient home improvements An estimated 190 million Americans have recently been under heat advisory alerts, according to the National Weather Service. That may have spurred you to think about making your home more energy...
Retirement account catch-up contributions can add up
If you’re age 50 or older, you can probably make extra “catch-up” contributions to your tax-favored retirement account(s). It is worth the trouble? Yes! Here are the rules of the road.The deal with IRAs Eligible taxpayers can make extra catch-up contributions of...
Inheriting stock or other assets? You’ll receive a favorable “stepped-up basis”
If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes. How do the rules work? Under the current fair market value basis rules (also known as the “step-up and step-down” rules), an heir...
The best way to survive an IRS audit is to prepare
The IRS recently released its audit statistics for the 2022 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audits these days, that will be little consolation...
Using your IRA distributions to benefit charity
Recent legislation opened up a new opportunity to use your IRA to make tax efficient contributions to your favorite charity. Individuals must receive annual required minimum distributions (RMDs) out of their retirement plan or IRA when they reach age 73 or older (this...
Questions you may still have after filing your tax return
If you’ve successfully filed your 2022 tax return with the IRS, you may think you’re done with taxes for another year. But some questions may still crop up about the return. Here are brief answers to three questions that we’re frequently asked at this time of year....
Paperwork you can toss after filing your tax return
Once you file your 2022 tax return, you may wonder what personal tax papers you can throw away and how long you should retain certain records. You may have to produce those records if the IRS audits your return or seeks to assess tax. It’s a good idea to keep the...
There’s a favorable “stepped-up basis” if you inherit property
There’s a favorable “stepped-up basis” if you inherit property A common question for people planning their estates or inheriting property is: For tax purposes, what’s the “cost” (or “basis”) an individual gets in property that he or she inherits from another? This is...
Two important tax deadlines are coming up — and they don’t involve filing your 2022 tax return
April 18 is the deadline for filing your 2022 tax return. But a couple of other tax deadlines are coming up in April and they’re important for certain taxpayers: Saturday, April 1 is the last day to begin receiving required minimum distributions (RMDs) from IRAs,...
The 2022 gift tax return deadline is coming up soon
Did you make large gifts to your children, grandchildren or other heirs last year? If so, it’s important to determine whether you’re required to file a 2022 gift tax return. And in some cases, even if it’s not required to file one, you may want to do so anyway. Filing...
Claiming losses on depreciated or worthless stock
Have you bought stock in a company that later dropped in value? While you may prefer to forget such an ill-fated investment, at least you can claim a capital loss deduction on your tax return. Here are the rules that apply when a stock you own is sold at a loss or...
Awarded money in a lawsuit or settlement? It’s only tax-free in certain circumstances.
You generally must pay federal tax on all income you receive but there are some exceptions when you can exclude it. For example, compensatory awards and judgments for “personal physical injuries or physical sickness” are free from federal income tax under the tax...