IRS issues notice on state and local tax deductions

state and local tax deductionsThe U.S. Department of the Treasury and the Internal Revenue Service have stated that proposed regulations will be issued addressing the deductibility of state and local tax payments for federal income tax purposes.

Notice 2018-54 also informs taxpayers that federal law controls the characterization of the payments for federal income tax purposes regardless of the characterization of the payments under state law.

The Tax Cuts and Jobs Act (TCJA) limited the amount of state and local taxes an individual can deduct in a calendar year to $10,000. In response to this new limitation, some state legislatures have adopted or are considering legislative proposals allowing taxpayers to make payments to specified entities in exchange for a tax credit against state and local taxes owed. Continue reading

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Posted in Compliance, Government, IRS, Personal Taxes, Tax Credits, Tax Deductions, Tax Law Changes, Taxes | Tagged , , , , , , ,

Saving for the Future While Paying Off Debt

So here’s the scenario: you’ve landed a new job and are now making a decent salary. Conventional wisdom says it’s time to start saving for the future, and that is correct. This includes goals such as your first house, a new car, and even retirement.

But in addition to these savings goals comes mandatory obligations such as paying off your student loan debt and even lingering credit card balances. How is it possible to accomplish both needs at the same time, eliminating debt while saving for the future?

Here are some things to think about: Continue reading

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Taxpayers who usually itemize deductions should check their withholding to avoid tax surprises

itemized tax deductionsThe Internal Revenue Service encourages taxpayers who typically itemized their deductions on Schedule A of the Form 1040 to use the Withholding Calculator this year to perform a “paycheck checkup.”

People who have itemized before may be affected by changes from the Tax Cuts and Jobs Act. Taxpayers who itemize should use the IRS Withholding Calculator to make sure their employers are withholding the appropriate amount of tax from their paychecks for their financial situation.

The law changes are effective in 2018 and affect the tax returns taxpayers will file in 2019. The new law makes a number of major changes, including:

  • Limiting the deductions for state and local taxes
  • Limiting the deduction for home mortgage interest in certain cases (see IR-2018-32 for more information)
  • Excluding deductions for employee business expenses, tax preparation fees and investment expenses, including investment management fees, safe deposit box fees and investment expenses from pass-through entities

Continue reading

Posted in IRS, Personal Finance, Personal Taxes, Planning Strategies, Tax Deductions, Tax Law Changes, Tax Tips, Taxes, Year End | Tagged , , , , , , , , , ,

5 Tips For Financial Freedom

If money is something that makes you happy — and let’s face it, more money never hurts — then the following tips will help you earn more and keep more in your pocket.

  1. Stop Being a Consumer, Start Being an Investor – Getting rid of unnecessary spending and unwanted debt is a must. The goal is to make your balance sheet positive, meaning placing an emphasis on assets instead of liabilities. If liabilities are a must, make sure they are somehow helping you obtain assets that grow in the long run.
  2. Create an Emergency Fund – Having money sitting around for a rainy day is a must. Most experts agree that enough to cover 6 to 8 months of expenses is usually best. Note that this does not mean you need to replace your income exactly for those months. Most people can live on far less than their income if they are disciplined. So aim to save enough to cover your necessary expenses during this time.
  3. Invest in the Stock Market – Not investing isn’t the same as sitting still. Money not earning interest is losing out to inflation. Make sure you are at least matching inflation, and hopefully beating it. Aim to reinvest your dividends if possible.
  4. Purchase Real Estate and Rent Out Your Property – Real estate has historically been a solid, long-term investment. Renting out your property adds positive cash flow to the investment. Consider adding this to your overall portfolio.
  5. Create Your Own Business – Ideas include a blog, a graphic design company, or a salon. Working for yourself has many upsides, including being able to choose your path and earn an income doing something you love.

Employing these five tips will ensure a balanced approach that will help you reach your goals and ultimately lead to financial freedom.

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Many tax-exempt organizations must file information returns by May 15

The following article was published by the IRS.

man sitting at desk The Internal Revenue Service reminded certain tax-exempt organizations that the Tuesday, May 15 filing deadline for Form 990-series information returns is fast approaching.

Form 990-series information returns and notices are normally due on the 15th day of the fifth month after an organization’s tax-year ends. Many organizations use the calendar year as their tax year, making May 15, 2018 the deadline to file for 2017. Continue reading

Posted in Accounting, Charitable Organizations, Non Profits, Planning Strategies, Tax Tips, Year End | Tagged , , , ,

Mixing Money and Marriage

When it comes to marriage, being on the same page financially is critical for the success of the relationship. So having any sort of “money talk” should happen earlier rather than later. In fact, it should be more than just a talk; it should be an ongoing topic of conversation.

According to a recent poll, two-thirds of adults don’t want to talk to their spouse about money. But not only is it important to talk about, it’s actually not as difficult as you might think. Here are some helpful conversation starters: Continue reading

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IRS provides certain small employers with relief for the small business health care tax credit for 2017 and later years

The following article was published by the IRS.

health insurance and dollarThe Internal Revenue Service recently issued guidance that provides relief for certain small employers that wish to claim the Small Business Health Care Tax Credit for 2017 and later years.

The Small Business Health Care Tax Credit can benefit certain small employers who provide health coverage to their employees. Generally, small employers must provide employees with a qualified health plan from a Small Business Health Options Program (SHOP) Marketplace to qualify for the credit. Also, small employers may only claim the credit for two consecutive years. Continue reading

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