Get Ready for Taxes: What to Do Before the Tax Year Ends Dec. 31

The following article was published by the IRS.

man with umbrellaAs tax filing season approaches, the Internal Revenue Service reminds taxpayers there are things they should do now to get ready for filing season.

For most taxpayers, Dec. 31 is the last day to take actions that will impact their 2017 tax returns. For example, charitable contributions are deductible in the year made. Donations charged to a credit card before the end of 2017 count for the 2017 tax year, even if the bill isn’t paid until 2018. Checks to a charity count for 2017 as long as they are mailed by the last day of the year.

Taxpayers who are over age 70 ½ are generally required to receive payments from their individual retirement accounts and workplace retirement plans by the end of 2017, though a special rule allows those who reached 70 ½ in 2017 to wait until April 1, 2018, to receive them. Continue reading

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Helpful End-of-Year Tax Tips

Own a small business? Trying to brainstorm to make sure you remember all the details you need to pull together at year end for tax season? Here are a handful of useful tips to keep in mind over the next few weeks and months.

  1. Document Donations – Make sure you keep a record of all donations made to qualified charitable organizations. Contact each organization and request a letter be sent to you by the end of the year, or by January 31 at the latest. While helpful but not required on smaller donations, the IRS does require a letter for each donation over $250, so make sure your records are accurate.
  2.  Gather Statements – Gather all 12 months of any bank or credit card statements and organize them. Make sure you don’t miss any accounts, including online accounts with statements that need to be downloaded.
  3. Estimated Taxes Paid – Figure out all of the estimated taxes you have paid to federal and state agencies. This information will be required when handing over your financial documents to your tax preparer this spring.
  4. Form 1095 – Keep an eye out for Form 1095 A, B, or C. This form offers proof that you had adequate health coverage throughout the year.
  5. Understand Tax Extensions – If you are one of the many businesses that request a tax filing extension, be aware that the extension only applies to the filing, not the payment. You are required to make a minimum payment by the due date even if your return is filed late; otherwise, you may face stiff penalties.

There are plenty of things that are important to consider when running a business, and taxes are definitely one of them. Make sure you are aware of these basic facts, and work with a reputable tax accountant to make this process simpler come tax time.

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Get to Know the Taxpayer Bill of Rights – Part 1

list and pencilThis is the first tip in a two-part summary of the rights granted to all taxpayers.

Every taxpayer has rights. The Taxpayer Bill of Rights takes these rights from the tax code and groups them into 10 categories. Taxpayers interacting with the IRS should know their rights, which are highlighted in Publication 1, Your Rights as a Taxpayer.

The Right to Be Informed. Taxpayers have the right to know how to comply with tax laws. They are entitled to clear explanations of the laws and IRS procedures. Taxpayers have the right to know about IRS decisions affecting their accounts with clear explanations of the outcomes. Continue reading

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Tips for Smart Charitable Giving

“Charitable giving” is a phrase used frequently towards the end of the year, both during the holiday season as well as at tax time. Giving is an extremely important gesture made by those who have towards those who aren’t as fortunate.

While need is a universal phenomenon, resources are often limited, necessitating that we prioritize where we would like to donate our hard-earned money. So how do we decide who should get our donations? Here are a few tips:

  1. Finding a charity whose mission is your passion. Giving requires sacrifice, but it can also bring great joy, especially if you give to an organization that supports something you are passionate about. Your money is a vehicle for change, so make sure it is going towards something that your heart is aligned with.
  2. Do some research. Find the charity that’s the most efficient at accomplishing your goal. Services such as Charity Navigator, BBB, Guide Star, or Charity Watch will help you dig into the financial details of many charities so that you can make the most informed decision. If you are unable to find a given charity’s financial information, just ask.
  3. Give directly. It’s common sense that getting rid of the middle man almost always saves money. The same goes for charities. Don’t give to an organization indirectly, as this will increase overhead and decrease the amount of money that reaches its final destination. Give directly to the charity of your choice, and watch your money make a highly efficient impact.
  4. Get involved. Giving your time, in addition to your money, makes your contribution intensely personal and brings real value to both the organization you support, as well as to your personal satisfaction.

Bottom line: research who you donate to, and donate wisely. In addition, donate your time as well as your money.

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National Tax Security Awareness Week: Recognize Phishing Email Scams

The following article was published by the IRS.

HackerThe IRS reminds people to be on the lookout for new, sophisticated email phishing scams. These scams not only endanger someone’s personal information, but they can also affect a taxpayer’s refund in 2018.

This tip is part of National Tax Security Awareness Week. The IRS is partnering with state tax agencies, the tax industry and groups across the country to remind people about the importance of data protection.

Phishing attacks use email or malicious websites to get personal information from the user. In many cases, the criminal fools someone into believing the phishing email is from someone they trust. The emails often have the look and feel of authentic communications. These targeted messages can trick even the most cautious person into doing something that may compromise data. Continue reading

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Shopping Tips for Cyber Monday and Beyond

Black Friday is behind us and we are now faced with the deals and bargains of Cyber Monday. Similar to Black Friday in many ways, Cyber Monday is a chance to knock out some, if not all, of your holiday shopping list at a fraction of the cost.

But there are some basic principles of gift buying that apply especially during times of deep discounts. First, it is critical to do some background research on an item before purchasing it. Is it brand new? Is it last year’s model? These things matter, as they ultimately determine if you are really getting a deal after all.

That being said, there is nothing wrong with finding a deal on an older model item. If it is new or in good working condition, and you don’t need the latest and greatest features, a good price on an older model item can still be a steal. Just make sure you know what you are getting before you make the decision.

However, on the flip side, some of the current, cutting-edge gadgets that have just recently been released are also being sold at deep discounts. Sounds great, right? In many cases it is, but beware of newer items that have gotten less than favorable reviews, or have known problems right out of the box. Retailers may be discounting these items just to move inventory. Again, do your research.

If you are one of the many who like to deal hunt on Amazon, take advantage of the site camelcamelcamel.com. It tracks price history of all items sold by Amazon, letting you know where the currently offered price stands in comparison to the average selling price. A deal isn’t a deal if it is a discount off an inflated price. This site will help you spot the difference.

Also, take a deep look at bundled items before you make a purchase. Often a bundle represents a significant discount, but other times the bundled items cost just as much together as if you purchased them separately. Even worse, bundles often times don’t include discounts that may be offered on individual items if purchased on their own. Again, there is no hard and fast rule for bundle pricing, but either way it pays to do your homework.

Finally, beware of off-brand gadgets. Sure, the prices are great, but you often get what you pay for. Make sure you read product reviews and talk to friends and family to see if someone already owns an item before you make a purchase. You don’t always have to buy top of the line, but buying from the bottom can sometimes leave you disappointed if you don’t pay attention.

Bottom line, do your homework every time you shop. Retailers offer great deals, but they don’t always make everything clear up front. Being an educated consumer is the best defense against getting ripped off. Take advantage of bargains you see, be thorough with your research, and watch the savings add up!

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Taxpayers Should do an End-of-Year Withholding Check-up

The following article was published by the IRS.

December calendarAs the end of the year approaches, the IRS encourages taxpayers to consider a tax withholding checkup. When taxpayers take a close look to make sure the right amount of tax is withheld now, they can avoid an unexpected tax bill next year.

Here are five examples of taxpayers who would benefit from a withholding check-up:

Taxpayers who received large tax refunds in past years
When a taxpayer has too much tax withheld from their paycheck, they pay too much tax during the year. They can change their withholding to have money upfront rather than waiting for a bigger refund. Continue reading

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