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Got Debt? How To Improve Your Financial Situation

Got Debt? How To Improve Your Financial Situation

by | Apr 18, 2022 |

Being debt-free is a worthwhile goal; unfortunately, for most people, it is unrealistic - especially for those of pre-retirement age with children, a car payment or two, and a mortgage. As such, most people need to focus on managing their debt first since it's likely to be there for much of their adult life. With inflation on the rise (and subsequent interest rate hikes), your credit card debt could be even more difficult to pay off. Eliminating debt is especially crucial for anyone approaching retirement age. However, the good news is that when debt is handled wisely, you won't need to shell out every cent of your hard-earned money to your lender because of exorbitant interest rates or feel like you're always on the verge of bankruptcy. Here's how you can pay off debt the smart way...

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The Tax Consequences of Crowdfunding

The Tax Consequences of Crowdfunding

by | Apr 11, 2022 |

Crowdfunding websites such as Kickstarter and GoFundMe have become an increasingly popular way for small business owners to stay afloat. The upside is that it's often possible to raise the cash you need; the downside is that the IRS considers that money taxable income. Let's take a closer look at how crowdfunding works and how it could affect your tax situation. What is Crowdfunding? Crowdfunding is the practice of funding a project by gathering online contributions from a large group of backers. It was initially used by musicians, filmmakers, and other creative types to raise small sums of money for projects that were unlikely to turn a profit. More recently, it has been used to fund projects, events, and products and, in some cases, has become an alternative to venture capital....

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Reminder: Rules for Depreciation and Expensing

Reminder: Rules for Depreciation and Expensing

by | Apr 8, 2022 |

As part of final guidance issued that pertains to the Tax Cuts and Jobs Act of 2017, new rules and limitations are in effect for taxpayers who deduct depreciation for qualified property acquired after September 27, 2017. As a business owner, they could affect your tax situation. Let's take a closer look: Businesses Can Immediately Expense More Under Tax Reform A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. These changes apply to property placed in service in taxable years beginning after December 31, 2017. As a reminder, the new law (ie., the Tax Cuts and Jobs Act of 2017) increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million....

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Tax Return Tips for Last-minute Filers

Tax Return Tips for Last-minute Filers

by | Apr 5, 2022 |

When it comes to working on your taxes, earlier is better, but many people find preparing their tax return stressful and frustrating and wait until the last minute. If you've been procrastinating on filing your tax return this year, here are eight tips that might help. Don't Delay Resist the temptation to put off your taxes until the last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error. Getting a head start (even if it is a week or two) will keep the process calm and mean you get your return faster by avoiding the last-minute rush. Gather Tax Documents in Advance Make sure you have all the records you need, including W-2s and 1099s. Don't forget to save a copy for your files....

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Tax Tips for March 2022

Tax Tips for March 2022

by | Mar 31, 2022 |

Click on the links below to jump to each section in this article: There's Still Time To Make an IRA Contribution for 2021 What Is the Credit for Other Dependents? Business Meals Fully Deductible in 2021 and 2022 Employee Business Expense Deductions: Who Qualifies? The Facts: Taxable vs. Nontaxable Income There's Still Time To Make an IRA Contribution for 2021 If you haven't contributed funds to an Individual Retirement Account (IRA) for tax year 2021, or if you've put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 18, 2022, due date (April 19 if you live in Maine or Massachusetts), not including extensions. Be sure to tell the IRA trustee that the contribution is for 2021. Otherwise, the trustee may...

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Reminder: Social Security Benefits May Be Taxable

Reminder: Social Security Benefits May Be Taxable

by | Mar 24, 2022 |

Social Security benefits include monthly retirement, survivor, and disability benefits; they do not include Supplemental Security Income (SSI) payments, which are not taxable. Generally, you pay federal income taxes on your Social Security benefits only if you have other substantial income in addition to your benefits. Your income and filing status affect whether you must pay taxes on your Social Security. About 40 percent of people who get Social Security have to pay income taxes on their benefits. At the end of each year, the Social Security Administration sends a Form SSA-1099, Social Security Benefit Statement, showing the amount of benefits you received. Use this statement when you complete your federal income tax return to find out if you must pay taxes on your benefits. Although...

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Small Business Financing: Securing a Loan

Small Business Financing: Securing a Loan

by | Mar 21, 2022 |

At some point, most small business owners will visit a bank or other lending institution to borrow money. Understanding what your bank wants and how to approach them properly can mean the difference between getting a loan for expansion or scrambling to find cash from other sources. Unfortunately, many business owners fall victim to several common, but potentially destructive myths regarding financing, such as: Lenders are eager to provide money to small businesses Banks are willing sources of financing for start-up businesses When it comes to seeking money, the company speaks for itself A bank is a bank, is a bank, and all banks are the same Banks, especially large ones, do not need and do not want the business of a small firm Understand the Basic Principles of Banking It's vital to...

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What To Know About the Gig Economy and Your Taxes

What To Know About the Gig Economy and Your Taxes

by | Mar 14, 2022 |

The gig economy, also called sharing or access economy, is defined by activities where taxpayers earn income providing on-demand work, services, or goods. This type of work is often carried out via digital platforms such as an app or website. There are many types of sharing economy businesses, including two of the most popular ones: ride-sharing, Uber and Lyft, for example, and home rentals such as Airbnb. If taxpayers use one of the many online platforms to rent a spare bedroom, provide car rides, or other goods or services, they may be part of the sharing or gig worker economy. Understanding how gig work can affect taxes may sound complicated, but it doesn't have to be. Let's take a look at what taxpayers should keep in mind: Income is Taxable Whether it's a full-time job or just a...

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Tax Breaks for Taxpayers Who Itemize

Tax Breaks for Taxpayers Who Itemize

by | Mar 7, 2022 |

Many taxpayers opt for the standard deduction, but sometimes itemizing your deductions is the better choice - often resulting in a lower tax bill. Whether you bought a house, refinanced your current home, or had extensive gambling losses, you may be able to take advantage of tax breaks for taxpayers who itemize. Here's what to keep in mind: Deducting State and Local Income, Sales, and Property Taxes The deduction that taxpayers can claim for state and local income, sales, and property taxes is limited to a combined, total deduction of $10,000 - $5,000 if married filing separately. State and local taxes paid above this amount can't be deducted. Refinancing a Home The deduction for mortgage interest is limited to interest paid on a loan secured by the taxpayer's main home or second home....

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Filing a Tax Return: Avoid These Common Errors

Filing a Tax Return: Avoid These Common Errors

by | Mar 3, 2022 |

While not all mistakes on tax returns cause delays in refunds, as the April 18 deadline approaches, taxpayers are advised to steer clear of the common tax return errors listed below to ensure a timely refund. Not Using Electronic Filing While this isn't necessarily a mistake per se, electronic filing is the best way to cut the chances for many tax return mistakes while maximizing deductions to reduce the amount of tax owed. The reason for this is that the tax software your tax professional uses automatically applies the latest tax laws, checks for available credits or deductions, does the calculations, and asks taxpayers for all required information. Due to the backlog of returns related to COVID-19, processing paper tax returns could take much longer than usual, and electronic filing is...

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