M&Y International - Newsletters

January 22, 2020

Wealth Management - 4 Things To Do With Your Tax Refund

There I said it.  I know it won’t be a popular suggestion but every year, nearly eight out of 10 U.S. tax filers get a federal tax refund. The average amount paid over the past few years was roughly $2,800, according to the most recent IRS data from 2018.

Getting a refund is not a bad thing.  In fact, having had to pay the past several years I appreciate not having to worry about whether I owe more than I paid into the treasury.

Now I am going to offer you 4 suggestions of what to do with your tax refund before you go rushing out to buy a new TV, furniture for the house, or that long overdue vacation

August 19, 2019

Understanding Payroll Tax Payment and Filing Requirements

When you hire your first employee, you'll need to get a federal employer identification number from the IRS if you do not already have one for your business. You may also need to get state and local tax numbers as well. In addition to assigning an employer identification number (EIN) for use on all your correspondence, deposits, returns, and other documents, the tax agencies will usually supply you with information about your specific payroll tax obligations

August 08, 2019

The Key Steps To A Smooth Monthly Close For Your Business

Monthly close is the process of recording and reconciling all transactions that occurred during the month, then closing the associated temporary accounts: i.e., “closing the books.” The goal is both to deliver a snapshot of your business’ financial position and provide a fresh start to the new period.

August 05, 2019

Credit Reports: What You Should Know

Credit reports are records of consumers' bill-paying habits, but do not include FICO credit scores. Also referred to as credit records, credit files, and credit histories, they are collected, stored, and sold by three credit bureaus, Experian, Equifax, and TransUnion.

August 01, 2019

Two New Tax Scams To Watch Out For

The two new variations of tax-related scams that are currently making the rounds are what the IRS has dubbed the "SSN Hustle" and the "Fake Tax Agency." The first involves Social Security numbers (SSNs) related to tax issues and the second threatens people with a tax bill from a fictional government agency. Both display classic signs of being scams.

July 29, 2019

Tips for Students with Summer Jobs

With summer almost here, many students will turn their attention to making money from a summer job. Not all the money they earn will make it to their pocket because employers must withhold taxes from their paycheck. Here are some tax tips young individuals should know when starting a summer job.

July 26, 2019

How Much Can Businesses Deduct For Vehicles Placed In Service In 2019?

The Tax Cuts and Jobs Act (TCJA) allows unlimited 100% first-year bonus depreciation for qualifying new and used assets (including eligible vehicles) that are acquired and placed in service between September 28, 2017, and December 31, 2022. However, for a used asset to be eligible for 100% first-year bonus depreciation, it must be new to the taxpayer (you or your business entity.

July 24, 2019

Summer Tax Planning Ideas For Individuals

The summer months are a good time to brainstorm tax planning strategies. Some ideas will help cut your tax bill for the current year; others will allow you to minimize future taxes. Here are various short- and long-term strategies to consider. They factor in changes included in the Tax Cuts and Jobs Act (TCJA).

April 08, 2019

6 Tips for Last-Minute Tax Filing

Earlier is better when it comes to working on your taxes, but many people find preparing their tax return to be stressful and frustrating and wait until the last minute. Complicating matters this year is tax reform and the newly redesigned Form 1040. If you've been procrastinating on filing your tax return this year, here are six tips that might help.

April 08, 2019

Wins & Losses: 2018 Tax Season

​​This year, many Americans owe less to the Internal Revenue Service due to the tax cuts of Trumps recent tax legislation. However, while some owe less, there are many who are receiving significantly less amounts in their refunds, due to the fact that the IRS now withheld less from incoming wages.

March 11, 2019

Tax Year 2018: What Can Taxpayers Expect?

In 2018, 90% of the United States’ employees saw bigger paychecks due to the recent overhaul of tax legislation carried out by the Treasury Department. The consequences following these tax cuts, leave taxpayers with approximately $180 billion given to the total of employee paychecks and direct deposits...

March 06, 2019

Cost-of-Living Refund Act of 2019

Senator Sherrod Brown (D-OH), Representative Bonnie Watson Coleman (D-NJ), and Representative Ro Khanna (D-CA) recently reintroduced a bill to greatly expand the Earned Income Tax Credit (EITC) called the Cost-of-Living Refund Act of 2019. This bill would increase the size of the EITC and increase the number of tax filers eligible for the credit.

February 20, 2019

Seven Common Small Business Tax Myths

​​The complexity of the tax code generates a lot of folklore and misinformation that could lead to costly mistakes such as penalties for failing to file on time or, on the flip side, not taking advantage of deductions you are legally entitled to take and giving the IRS more money than you need to. With this in mind, let's take a look at seven common small business tax myths...

February 11, 2019

Tax Refunds Down 8.4% as the Result of Recent Legislation

This year with the partial government shutdown, tax season got off to a slow start. As a result of recently passed legislation, signed by the president in late 2017, data released this Friday shows a significant drop in returns and refunds for filed taxes...

February 06, 2019

Thousands Miss Out On Earned Income Tax Credit Because They Don't File

The Earned Income Tax Credit is the biggest single check many working families see in a year. But they have to file a tax return — and be aware of the credit — to get the money...

February 04, 2019

Get A Tax Benefit From Your Charitable Contributions

Giving to charity not only benefits your chosen charities, it may also benefit your own tax situation. Here are three ways to potentially receive a tax benefit for your contributions...

February 04, 2019

IRS Extends Passthrough Deduction to Real Estate Rental Activities, Provides Other Guidance

New IRS guidance fills in several more pieces of the Code Sec. 199A passthrough deduction puzzle. Taxpayers can generally rely on all of these new final and proposed rules.

January 17, 2019

IRS Confirms Tax Filing Season To Begin January 28 Including Refunds

Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.
 
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.

April 26, 2018

National Small Business Week: Remember to Check out these IRS.gov Resources

The 2018 National Small Business Week is April 29 through May 5. This is the perfect time for small business owners and the self-employed to check out many online products to help them understand their tax responsibilities

April 18, 2018

Facts about Filing for an Extension

This year’s tax-filing deadline is today. Taxpayers needing more time to file their taxes can get an automatic six-month extension from the IRS.

April 12, 2018

Tax Time Tips from the IRS

The tax filing deadline is Tuesday, April 17 this year. This is because April 15 falls on a weekend and the following Monday is a holiday in the District of Columbia. Even with an extra two days, the IRS urges taxpayers to avoid waiting until the last minute to file their taxes

April 05, 2018

Tips for Getting Unclaimed 2014 Tax Refunds

The IRS reminds taxpayers they may have money waiting for them. About 1 million taxpayers who did not file a 2014 federal income tax return have unclaimed tax refunds totaling about $1.1 billion

March 28, 2018

Low income taxpayer clinics represented 19,479 taxpayers dealing with an IRS tax controversy

What's thiWASHINGTON — The Internal Revenue Service’s Low Income Taxpayer Clinic (LITC) Program Office has issued its annual program report. The report describes how LITCs provide representation, education, and advocacy for taxpayers who are low income or speak English as a second language (ESLs item about? What makes it interesting? Write a catchy description to grab your audience's attention...

March 15, 2018

Things to Remember when Considering Early Withdrawals from Retirement Plans

Many taxpayers may need to take out money early from their Individual Retirement Account or retirement plan. Doing so, however, can trigger an additional tax on early withdrawals. Here are a few key points to know:

March 08, 2018

IRS: Refunds worth $1.1 billion waiting to be claimed by those who have not filed 2014 federal income tax returns

WASHINGTON ―Unclaimed federal income tax refunds totaling about $1.1 billion may be waiting for an estimated 1 million taxpayers who did not file a 2014 federal income tax return, according to the Internal Revenue Service.

March 01, 2018

Updated Withholding Calculator, Form W-4 Released; Calculator Helps Taxpayers Review Withholding Following New Tax Law

WASHINGTON –The Internal Revenue Service today released an updated Withholding Calculator on IRS.gov and a new version of Form W-4 to help taxpayers check their 2018 tax withholding following passage of the Tax Cuts and Jobs Act in December.

February 28, 2018

Interest on Home Equity Loans Often Still Deductible Under New Law

Responding to many questions received from taxpayers and tax professionals, the IRS said that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labelled. The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan. Under the new law, for example, interest on a home equity loan used to build an addition to an existing home is typically deductible, while interest on the same loan used to pay personal living expenses, such as credit card debts, is not. As under prior law, the loan must be secured by the taxpayer’s main home or second home (known as a qualified residence), not exceed the cost of the home and meet other requirements.

February 21, 2018

Get to Know the Earned Income Tax Credit and How It Benefits Taxpayers

The IRS reminds taxpayers to avoid the rush. As with previous years, the agency expects taxpayers to submit a surge of tax returns during the upcoming Presidents Day weekend. Here are some tips and resources to get taxpayers the help that they need.

February 15, 2018

How Taxpayers Can Avoid the Rush Ahead of Presidents Day

The IRS reminds taxpayers to avoid the rush. As with previous years, the agency expects taxpayers to submit a surge of tax returns during the upcoming Presidents Day weekend. Here are some tips and resources to get taxpayers the help that they need.

February 01, 2018

Tax Refund Offsets Pay Unpaid Debts

If you can’t pay your taxes in full, the IRS will work with you. Past due debts like taxes owed, however, can reduce your federal tax refund. The Treasury Offset Program can use all or part of your federal refund to settle certain unpaid federal or state debts, to include unpaid individual shared responsibility payments. 

January 31, 2018

What to Expect for Refunds in 2017

The IRS issues more than 9 out of 10 refunds in less than 21 days. However, it’s possible your tax return may require additional review and take longer. Where’s My Refund? has the most up to date information available about your refund. The tool is updated no more than once a day so you don’t need to check more often. 

January 24, 2018

Updated 2018 Withholding Tables Now Available; Taxpayers Could See Paycheck Changes by February

WASHINGTON — The Internal Revenue Service today released Notice 1036, which updates the income-tax withholding tables for 2018 reflecting changes made by the tax reform legislation enacted last month. This is the first in a series of steps that IRS will take to help improve the accuracy of withholding following major changes made by the new tax law.

January 23, 2018

Five Things to Remember about Hobby Income and Expenses

From scrapbooking to glass blowing, many Americans enjoy hobbies that are also a source of income. A taxpayer must report income on their tax return even if it is made from a hobby. However, the rules for how to report the income and expenses depend on whether the activity is a hobby or a business. There are special rules and limits for deductions taxpayers can claim for hobbies. Here are five things to consider.

January 19, 2018

Here’s Five Reasons to Use Direct Deposit for a Tax Refun

As taxpayers prepare for the January 29 start of filing season, they should consider a direct deposit of any refunds due. It’s easy, safe, fast — and the best way to get a refund. That’s why 80 percent of taxpayers choose it every year. 

January 18, 2018

Get Ready for Taxes: Plan Ahead to Avoid Refund Delays

Taxpayers can take steps to ensure smooth processing of their 2017 tax return next year. Here are three things taxpayers should know about the tax returns they will file next year

January 17, 2018

6 ways The Tax Plan Could Change Homeownership

Here are five elements of the tax law that could affect home-ownership, home selling and moving.

January 16, 2018

IRS Private Debt-Collection Program Hurts Low-Income Americans

The Internal Revenue Service's handling of its private debt-collection program is harming lower-income Americans who can least afford to repay tax debts, a federal watchdog warned Wednesday...

January 12, 2018

IRS Closer To Obtaining Virtual Currency Records

U.S. taxpayers who have traded in virtual currencies such as bitcoin, but have not reported and paid tax on the income or gains from those transactions, may face the heat as the IRS continues to press for greater tax compliance in the virtual currency arena. 


Some taxpayers may evade their tax obligations by concealing or otherwise failing to report their proper amount of taxable income and thus underpay their taxes, according to the IRS, and the Service has identified several tax-compliance risks associated with virtual currencies, including a lack of third-party reporting. 


Tax practitioners should understand how virtual currency transactions work because their clients may already be trading in virtual currency or will be in the near future

January 11, 2018

IRS Announces When Filing Season Will Start

The IRS announced that this year’s filing season will begin Jan. 29, a little later than last year’s filing season, which began Jan. 23. The announcement of the start date for tax season comes much later than last season (Jan. 4 versus the beginning of December last time). The Service had announced in November that it was still updating its systems to prepare for the 2018 filing season.

January 07, 2018

Important Tax Changes for 2018

As we start the New Year, it's always a sure bet that there will be changes to current tax law and 2018 is no different now that many of the tax provisions pursuant to the Tax Cuts and Jobs Act of 2017 (TCJA) are in full effect. From health savings accounts to tax rate schedules and standard deductions, here's a checklist of tax changes to help you plan the year ahead.

December 19, 2017

2017 Year-End Tax Tips For Individuals

Before Dec. 31, think about how you can help your tax situation for this year. By following year-end tax tips, you can prepare in 2017 to save on taxes due April 16, 2018.

 

Compare standard versus itemized deductions — Your current or planned 2017 itemized deductions might be more than your standard deduction. If so, you’ll save tax dollars by itemizing.

November 09, 2017

2017 Year-End Tax Planning For Businesses

As year-end approaches, each business should consider the many opportunities that might be lost if year-end tax planning is not explored. A business may want to consider several general strategies, such as use of traditional timing techniques for delaying income recognition and accelerating deductions. A business should also consider customized strategies tailored to its particular situations...

November 06, 2017

House GOP Leaders Unveil Tax Reform Bill

House Republican leaders formally introduced what they hope will be their signature legislative achievement in the 115th Congress: a sweeping tax reform bill that lowers individual and business tax rates, while also broadening the base by repealing or limiting many tax preferences.

The "Tax Cuts and Jobs Act" is slated for consideration in the Ways and Means Committee starting at noon on Monday, November 6.  At or just before the start of the session, Chairman Kevin Brady (R-TX) will likely unveil a different version of the bill, reflecting additional input from lawmakers and outside interests, as well as technical corrections and clarifying edits to the bill language. Brady this week reaffirmed the goal of getting a reform bill signed into law this year.

Introduced as H.R. 1, the bill is 429 pages long and includes at least 120 separate provisions that would add to, modify or delete portions of the current tax code.  The provisions are proposed to be effective for tax years beginning in 2018 and beyond.

 

Some of the major provisions affecting corporations include:..

October 31, 2017

Uber, Lyft, Airbnb, Etsy, Rover, TaskRabbit. If you've used any of these services--or provided services for them to others--you're a member of the sharing economy.


If you've only used these services (and not provided them), then there's no need to worry about the tax implications but if you've rented out a spare room in your house through a company like Uber or Airbnb then you're probably collecting a fee--a portion of which goes to the provider (in this example, Airbnb) and a portion that you keep for providing the service. But whether it's your full-time gig or a part-time job to make some extra cash, you need to be aware of the tax consequences....

October 25, 2017

Keeping Track of Miscellaneous Deductions

Miscellaneous deductions such as certain work-related expenses you paid for as an employee can reduce your tax bill, but you must itemize deductions when you file to claim these costs. If you usually claim the standard deduction, think about itemizing instead because you might be able to pay less tax. Here are some tax tips that may help you reduce your taxes:

October 24, 2017

Starting a New Business? MYIFS Can Help in Preparing an Effective Business Plan

Whether you're starting a new company, seeking additional financing for an existing one, or analyzing a new market, a business plan is a valuable tool. Think of it as your blueprint for success. Not only will it clarify your business vision and goals, but it will also force you to gain a thorough understanding of how resources (financial and human) will be used to carry out that vision and goals.

Before you begin preparing your business plan, take the time to carefully evaluate your business and personal goals as this may give you valuable insight into your specific goals and what you want to accomplish. Think about the reasons why you are starting a new business; maybe you're ready to be your own boss, or you want financial independence. Whatever the reason it is important to determine the "why."

October 23, 2017

Tax Breaks For Hiring New Employees

If you're thinking about hiring new employees this year, you won't want to miss out on these tax breaks.

1. The Work Opportunity

The Work Opportunity Tax Credit (WOTC) is a federal tax credit for employers that hire employees from the following targeted groups of individuals below.

The tax credit (a maximum of $9,600) is taken as a general business credit on Form 3800 and is applied against tax liability on business income. It is limited to the amount of the business income tax liability or social security tax owed. Normal carry-back and carry-forward rules apply...

October 17, 2017

Tax Planning for Small Business Owners

Tax planning is the process of looking at various tax options to determine when, whether, and how to conduct business transactions to reduce or eliminate tax liability.

Many small business owners ignore tax planning. They don't even think about their taxes until it's time to meet with their CPAs, EAs, or tax advisors but tax planning is an ongoing process, and good tax advice is a valuable commodity. It is to your benefit to review your income and expenses monthly and meet with your CPA, EA, or tax advisor quarterly to analyze how you can take full advantage of the provisions, credits, and deductions that are legally available to you.

October 13, 2017

Special Tax Relief: Hurricanes HARVEY, IRMA & MARIA

Key tax relief provisions are now available for victims of Hurricanes Harvey, Irma and Maria. This tax relief applies to individuals and businesses anywhere in Florida, Georgia, Puerto Rico and the Virgin Islands, as well as parts of Texas. A key component of this tax relief is that it postpones various tax deadlines. For example, individuals and businesses will have until January 31, 2018, to file any returns and pay any taxes due.

October 12, 2017

Tax-Saving Strategies That Reduce Your Tax Liabilities

If you're looking to save money on your taxes this year, consider using one or more of these tax-saving strategies to reduce your income, lower your tax bracket, and minimize your tax bill.

 

Max Out Your 401(k) or Contribution to an IRA

You've heard it before, but it's worth repeating because it's one of the easiest and most cost-effective ways of saving money for your retirement.

Many employers offer plans where you can elect to defer a portion of your salary and contribute it to a tax-deferred retirement account. For most companies, these are referred to as 401(k) plans. For many other employers, such as universities, a similar plan called a 403(b) is available. Check with your employer about the availability of such a plan and contribute as much as possible to defer income and accumulate retirement assets.

August 12, 2017

Rules for Managing Tax Basis on Stock Sales Worth a Look

A recent Tax Court decision and pending tax reform proposals have intersected in highlighting how stock sales can be timed for maximum tax advantage. The taxpayer in the recent case (Turan, TC Memo. 2017-141) failed to convince the Tax Court that he timely made an election with his broker to use the last-in-first-out (LIFO) method to set his cost-per-share cost basis for determining capital gains and losses on his stock trades on shares of the same company. As a result, he was required to calculate the capital gain or loss on his stock trades using the firm’s first-in-first-out (FIFO) “default” method, which, in his case, yielded a significant increase in tax liability for the year.

August 12, 2017

School District - Outsourcing Saves Money Enhancing (Potentials and Pitfalls)

Define Outsourcing

To obtain services from an outside supplier instead of internal source.  For School Districts, this can be summarized as anyone who works on behalf of our students and do not receive their paycheck directly from the district....

June 10, 2017

School Districts - Enhancing Your Financial Management Skills

Monthly Financial Reports

Board Secretary’s Report

  • Review and verify revenue report – amount budgeted, realized, and over/under

  • Review and verify expenditure report – amount budgeted, expended, outstanding and available

  • Review and verify recapitulation of balances

    • Verify adjustment for prior year encumbrances

“Bottom line” should be budgeted surplus plus any additional amounts authorized during the year

May 09, 2017

Time To Do A Financial Plan

It’s too late for your 2016 tax return, but there are plenty of things you can start doing and ought to start doing now to lower your 2017 tax bill.

April 05, 2017

Putting American Workers First: USCIS Announces Further Measures to Detect H-1B Visa Fraud and Abuse

WASHINGTON – U.S. Citizenship and Immigration Services (USCIS) today announced multiple measures to further deter and detect H-1B visa fraud and abuse. The H-1B visa program should help U.S. companies recruit highly-skilled foreign nationals when there is a shortage of qualified workers in the country. Yet, too many American workers who are as qualified, willing, and deserving to work in these fields have been ignored or unfairly disadvantaged. Protecting American workers by combating fraud in our employment-based immigration programs is a priority for USCIS.

April 05, 2017

What To Expect From President Trump's Tax Reform Plan

After Republican leaders in the House of Representatives decided to pull their healthcare bill last week, President Donald Trump indicated that his focus would most likely shift to tax reform. While we don't know anything official about what a finalized tax reform bill might look like, we do know what the president promised during his campaign and how it compares to the current GOP platform

April 04, 2017

Tax Credits Save You More Than Deductions: Here Are The Best Ones

If you’ve ever had to write a check to Uncle Sam in April, you’ve likely become a fan of finding ways to cut your tax bill — and that may have you wondering whether you qualify for any tax credits. 
Tax credits are the gold nuggets of the tax world. Qualifying for one feels better than finding $100 in your pants pocket. 
Here’s a brief look at how some of the most common ones work — maybe you’ll find some cash here, too.

March 31, 2017

USCIS Will Accept CW-1 Petitions for Fiscal Year 2018 Beginning April 3, 2017

 

On April 3, 2017, U.S. Citizenship and Immigration Services (USCIS) will begin accepting CW-1 petitions subject to the fiscal year (FY) 2018 cap. Employers in the Commonwealth of the Northern Mariana Islands (CNMI) use the CW-1 program to employ foreign workers who are otherwise ineligible to work under other non-immigrant worker categories. The cap for CW-1 visas for FY 2018 has not been set, but it is required to be less than the FY 2017 cap, which is currently set at 12,998.

March 31, 2017

Why Paying Taxes By Credit Card Probably Isn't A Good Idea

A big tax bill is like hay fever. You don't want it, you try to avoid it — and then April rolls around and it hits you hard. Now you have to figure out how to take care of it. 
Taxes have to be paid, and putting them on your credit card might seem a good option. Maybe you need more time to come up with the money, or you're imagining the rewards you could rack up by putting a big expense on your card. But paying the IRS with plastic probably isn't a good idea, and here's why. 
 

March 24, 2017

4 Reasons To Love The Roth IRA

If you earn money, whether in the form of wages, interest, or even gambling winnings, among other things, you are required to pay taxes on that money. And there are very few exceptions to those tax laws. But one particular exception to that rule stands out: The tax treatment of earnings within a Roth IRA. And that special tax treatment leads to four reasons you should love saving for retirement in a Roth account.

March 23, 2017

What's The Average American's Tax Rate?

According to the IRS's preliminary data from the 2015 tax year (the returns you filed during 2016), there was a total of $1.454 trillion in income tax owed, which translates to an average effective federal income tax rate of about 13.5% per return. However, that doesn't tell the entire story, as there are several other taxes that most Americans pay. Here's a clearer picture of how much Americans pay in taxes as a percentage of their income

March 23, 2017

Lesser-Known Tips To Save More On Taxes, Cut Credit-Card Debt

The economy seems to have perked up, with a bit more hiring, gradually rising wages and consumer confidence at a 16-year high. Will it translate into increased savings, less personal debt and other signs of financial stability?

March 22, 2017

3 Tax Breaks Investors Should Strongly Consider

No one likes paying any kind of taxes, so you might think that in any ranking of the most hated tax Americans have to pay, every tax you have to pay would all tie for first. That said, we're in the middle of income tax season, and there's been plenty of political and tax policy discussion about the negative impacts of the estate tax, which many call the death tax. Yet neither the income tax nor the estate tax turns out to be the most-hated tax, instead giving way to a tax that nearly everyone pays either directly or indirectly. 
 
 

March 21, 2017

What Qualifies As Nontaxable Income?

What does the IRS tax? Just about everything. 


The Internal Revenue Code defines taxable income as gross income minus deductions. And gross income, federal law says, “means all income from whatever source derived.” 
That’s a lot of territory, covering not only earned income like wages but also unearned income from investments. If you operate on a cash-free basis, the value of items you receive as a barter exchange is taxable, too. So are gambling jackpots and prize winnings. 
And the IRS doesn’t care one bit how you get your money, specifically saying, “Income from illegal activities … must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.” Al Capone learned that hard lesson.

March 17, 2017

12 Tips To Cut Your Tax Bill Now And Next Year

To help avoid an unpleasant surprise, here are 12 easy moves many people can make to cut their tax bills. In many cases, you must itemize rather than take the standard deduction in order to use these strategies, but the extra effort may be worth it. 

March 16, 2017

10 Tax Breaks Every Parent Needs To Know

Starting a family isn't cheap. According to a report issued by the Department of Agriculture in early January, a middle-income married couple with two children is estimated to spend $233,610 to raise a child born in 2015. Keep in mind that this cumulative expense only covers the cost to raise a child through age 17, meaning it doesn't include college expenses. 

March 15, 2017

Can I Deduct Work Clothes On My Tax Returns?

The IRS under certain circumstances allows employees to deduct unreimbursed business expenses, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown. 
“These expenses are subject to a 2% limitation,” Kiely said. “This means if your reimbursed employee business expenses are greater than 2% of your adjusted gross income, you can deduct the amount that exceeds 2%.” 

March 10, 2017

7 Things You Should Know About America's Most-Hated Tax

No one likes paying any kind of taxes, so you might think that in any ranking of the most hated tax Americans have to pay, every tax you have to pay would all tie for first. That said, we're in the middle of income tax season, and there's been plenty of political and tax policy discussion about the negative impacts of the estate tax, which many call the death tax. Yet neither the income tax nor the estate tax turns out to be the most-hated tax, instead giving way to a tax that nearly everyone pays either directly or indirectly. 

March 08, 2017

What qualifies as nontaxable income?

What does the IRS tax? Just about everything.

The Internal Revenue Code defines taxable income as gross income minus deductions. And gross income, federal law says, “means all income from whatever source derived.”

That’s a lot of territory, covering not only earned income like wages but also unearned income from investments. If you operate on a cash-free basis, the value of items you receive as a barter exchange is taxable, too. So are gambling jackpots and prize winnings.

And the IRS doesn’t care one bit how you get your money, specifically saying, “Income from illegal activities … must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.” Al Capone learned that hard lesson.

March 08, 2017

Inexpensive Retirement Plans For Small-Business Owners

You’ve built your own company from the ground up, and now it’s time to start thinking about a retirement plan for yourself and your employees.  
The good news is that there are several plans available to small-business owners from IRAs to 401(k)s to cash plans and pensions. And you could get a tax credit of up to $500 just to set up the plan! But where do you start? 

March 07, 2017

How To Drop Into A Lower Tax Bracket

Lowering your tax bill is always a joy. For most taxpayers, it's fairly easy to trim down your tax liability without breaking the rules (and therefore inviting some truly nasty penalties down the road). The simplest way to manage this feat is to reduce your taxable income. That doesn't mean asking your boss for a pay cut – rather, the idea is to make part of your income exempt from taxation. This strategy really shines when it can drop you into a lower tax bracket, because not only will you pay less in taxes, but you'll also reduce your tax rate for part of your income.

March 01, 2017

How unemployment can really drive up your tax bill

Back in September of 2015, I lost my job and decided to take unemployment benefits for the first time in my life while I looked for a new one. Even the significantly reduced income that the unemployment benefits provided was a needed cushion since we’d closed on a new home the same week I lost my job. I’d crunched the numbers, and taking the benefits was going to be a better alternative than using money from our emergency fund (which was tied to the markets and had fallen significantly just the month before).