Individuals Can Find Answers to their Questions about Tax Reform on IRS.gov

The following article was published by the IRS.

ask-2341784_1280Tax reform legislation passed in December 2017 affects almost every taxpayer. The IRS is working closely with partners in the tax return preparation and tax software industries to prepare for tax reform affecting tax year 2018. This ongoing collaboration ensures that taxpayers can continue to rely on the IRS, tax professionals, and tax software programs when it’s time to file their returns.

As people prepare to file their 2018 tax returns in 2019, they can visit IRS.gov for answers to their questions about tax reform. Here are several of the resources that will help taxpayers find out how this law affects them: Continue reading

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How to Deduct Your Home Office

If you work at home and don’t claim the home office deduction, you could be flushing money down the toilet. For the self-employed, a home office deduction can save you hundreds of dollars on your taxes.

When claiming this deduction, you may claim things such as your mortgage and your utilities. But it’s important to realize that there are some very specific rules that must be followed, according to the IRS. The simplest way to remember them is with the letters “P” & “E”.

  • “P” or Principal – The space you use in your home must be your primary or principal place of business in order to qualify.
  • “E” or Exclusive – This space must also be used exclusively for work-related activities.

Continue reading

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Tax Reform Affects If and How Taxpayers Itemize their Deductions

The following article was published by the IRS.

checklist-2320130_960_720Tax reform that affects both individuals and businesses was enacted in December 2017. It’s commonly referred to as the Tax Cuts and Jobs Act, TCJA or simply tax reform. In addition to nearly doubling standard deductions, TCJA changed several itemized deductions that can be claimed on Schedule A, Itemized Deductions.

This means that many individuals who formerly itemized may now find it more beneficial to take the standard deduction. Taxpayers may only do one or the other. They either take the standard deduction or claim itemized deductions.

The tax reform law made the following changes to itemized deductions that can be claimed on Schedule A for 2018. Continue reading

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Debt Snowball

Before embarking on any debt reduction plan, be sure to save up $1000 as an emergency fund. Once this first step is behind you, it’s time to take a look at your debt repayment plan.

One of the most effective way of paying down debt is a method known as the debt snowball. It takes a lot of dedication and effort to stick with this, but it works every time if followed properly.

Personal finance is 80% behavior and 20% head knowledge, according to financial expert Dave Ramsey. The debt snowball is designed to modify your behavior with money. Some might argue that the math needs to add up before one comes up with an effective plan, but in reality it’s having the right motivation that is the most important factor for a plan to work. Continue reading

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IRS Confirms Tax Filing Season to Begin January 28

The following article was published by the IRS.

agenda-3292366_1280Despite the government shutdown, the Internal Revenue Service has 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.

Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations. Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse. Continue reading

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What to Say When Your Friends, Family Ask For Money

It is commonly said that friendships and money don’t mix, and in most cases that is correct. The simple fact is that money can easily strain any relationship.

Many of us at some point have been there — our kids, our friends, our family — they want to borrow money, making us feel like a human ATM. It’s a tough dilemma, as saying yes OR no can both make you feel awful.

What should you do about this? First and foremost, don’t wait to decide how to handle these situations. Come up with a personal lending policy in advance and then stick to it when situations arise.

Evaluate your own lending power, how much you could realistically afford to lend, and perhaps more importantly, if you would be able to absorb a loss if the money can’t be repaid. Continue reading

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IRS Issues Standard Mileage Rates for 2019

The following article was published by the IRS.

odometer-1227836_1280The Internal Revenue Service has issued the 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 58 cents per mile driven for business use, up 3.5 cents from the rate for 2018,
  • 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018, and
  • 14 cents per mile driven in service of charitable organizations.

Continue reading

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