Very frequently tax preparers are asked to provide clarification on IRS rules that they heard from a friend, neighbor or colleague. Usually some part of the statement is true; however, there is always more to the story or it may not apply to that person’s specific situation. If you’ve heard the statement, “You can’t deduct […]
The 2017 Tax Cuts and Jobs Act revised some foundational deductions, exemptions, and tax brackets for the 2018 tax year. Here’s a rundown of what’s changed in that area for individuals: Exemption On your 2017 1040 tax return, you likely received an exemption of $4,050 per person. Check line 42 of your own return. In […]
Has your friend, neighbor or colleague told you that if you take the home office deduction, it will be a “red flag” to the IRS that will trigger an audit? Well, that is just not true! 2017 is the last tax year that you can take a home office deduction since the Tax Cuts and […]
Do you know how long you are supposed to keep documents? Do you know when it’s safe to shred? Having this knowledge is the first step to good recordkeeping. By following these guidelines, you can keep your documents and files organized and updated. Avoid keeping things you don’t need – or discarding something you should […]
Want to save money in taxes WITHOUT working harder? One way is to shift income from a higher bracket taxpayer to a lower one or even a zero rate-bracket. Typically, splitting the income between family members by hiring them to work in the business will save thousands in taxes. An example is shifting income to […]
Tax time is probably not your favorite time of year, especially if you have to pay the government your hard-earned dollars. Here are five tips on how we can make it just a bit less painful. 1. Have patience. Practicing patience will go a long way when you’re dealing with taxes. Keep in mind that […]
Here are some basic rules you need to know to ensure that all your entertainment expenses are deductible: Do you have an ordinary and necessary business reason for the entertainment? Did you have a quiet business discussion before, during or after the event? No discussion, no deduction! You’ll need to explain why the entertainment would […]
Processing 1099s can be confusing and frustrating. Here are some facts you need to know! General Rule: If you pay someone more than $600 in a calendar year for services, not material/product, then you are required to provide a 1099 showing the amount you paid. One tip is to collect a W-9 at the time […]
If you have a high-deductible health insurance plan, you probably know how important it is to have a Health Savings Account (HSA) to save for those medical expenses that come out of your pocket. HSAs offer great tax savings if you qualify. What’s so good about them? Well, unlike the well-known flexible spending accounts that […]
Some individuals who start drawing social security benefits end up with a nasty surprise come tax time – they owe tax on a portion of these benefits! After all, such benefits were historically exempt from any federal income tax. Times have changed, however, and you need to be aware of how you might be affected. […]