|
Are you having the right amount of tax withheld from your paycheck? The IRS's Tax Withholding Estimator helps you calculate federal tax withholding, which affects your take-home pay as well as your tax refund or tax due. To use the estimator, you'll need paystubs from your job(s). Be sure to include your spouse's job and any other income information, such as side jobs, self-employment and investments. It's good to have your latest tax return handy as well.
Property taxes aren't due with your tax return each year. Instead, you pay them to the local government (city, town, etc.) where you live. If you have a mortgage, you don't pay them directly; they are included in your mortgage payment. Every month, a portion of your mortgage payment goes into an escrow account from which the bank pays your property taxes when they are due.
If you make any mistakes on your tax return, you can end up owing even more money. This means you might miss out on the full refund you claimed.
There’s something known as the Taxpayer Bill of Rights, and it was put into place by the Internal Revenue Service itself. This list of 10 rights pertains to instances where you file your tax return, pay your tax balances, respond to letters or notices, experience being audited or appeal a decision made by the IRS regarding your tax situation.
When starting a family, you might be interested to know that you're now eligible to claim new credits and deductions, which ultimately lessens the total value of your tax liability.
One of the most significant tax benefits you as a homeowner will enjoy is arguably the mortgage interest deduction. This is applied to the interest you pay on your mortgage for your primary place of residence, though it may also apply to your second home or vacation home. For more insight into the specifics of this mortgage interest deduction, check out Publication 530 on the IRS website.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It's an option if you can't pay your full tax liability or if doing so would cause you financial hardship. What's considered by the IRS in allowing an offer in compromise?
The second relief bill, passed at the end of 2020, contains updates to the employee retention credit, a refundable payroll tax credit. Each option has its own rules and regulations for first- and second-round funding. The act changes some requirements for the ERC — retroactively and prospectively — giving businesses more options to claim it.
This has been a difficult year for everyone, and the last thing anyone wants to think about is owing an unexpected tax penalty. Unfortunately, self-employed individuals and small-business owners who are required to pay estimated taxes may find themselves in that position if they did not pay their estimated tax for 2020.
Are there business deductions you can take advantage of? Yes, but first you have to make sure your expenses are truly business-related. The lines can blur, especially with a small business, because you generally cannot deduct personal, living or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts, and then deduct the business part.
The second stimulus package (Consolidated Appropriations Act, 2021) includes $10 billion to provide immediate assistance to child-care providers and $250 million for the Head Start program. Who is in line for this aid? There are multiple recipients, as outlined below.
The recently signed relief bill — the Consolidated Appropriations Act, 2021 — is letting those who have flexible spending accounts roll money over, which is a win for parents and those with live-in elderly loved ones.
As of this writing, 15 states and Washington, D.C., require paid sick leave, while eight states and Washington, D.C., require paid family leave. Many local governments also mandate paid sick or family leave.
The IRS has introduced a new Form 1099-NEC, Nonemployee Compensation. It's a sibling to Form 1099-MISC and replaces it for certain purposes. You must file it for each person in the course of your business to whom you have paid at least $600 during the year for the following:
The IRS released the final regulations and other guidance on the limitation on the deduction for business interest expenses under the Tax Cuts and Jobs Act of 2017 that was amended by the CARES Act of 2020.
A trust can be a powerful estate-planning tool, but contrary to popular belief, trusts do not make all taxes disappear. The families who set them up still need to consider tax consequences.
The SECURE Act's fix to the TCJA glitch — that's how Forbes describes what's been going on with the football that is called the Kiddie Tax. When the Tax Cuts and Jobs Act changed the way the Kiddie Tax was figured, it caused a lot of concern for families with children with unearned income. The fix is retroactive for 2019 and 2018 returns.
Employers needs to make themselves familiar with Form 940, used to report the Federal Unemployment Tax Act tax. The FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs.
The IRS has released new guidance on various aspects of PPP loan forgiveness. Below are summaries of the key provisions.
What can business owners do to reduce their taxes? Some need to make themselves aware of the various breaks available. Some of the benefits available to businesses for 2020 are the result of the 2017 Tax Cuts and Jobs Act (TCJA) and some were created by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). In addition, although the chance of any further tax or Covid-19 legislation seems slim, further changes may come.
What will 2021 bring us? After a year of turmoil and surprises, no one has a clear crystal ball. But there are some certainties, and one is that the federal government is changing a variety of number affecting the finances of businesses and individuals.
First, any individual or business that received government funds this year should keep that in mind and have records on hand. This includes unemployment benefits and Paycheck Protection Program funds. The taxable situation for these can be complicated, so be sure to discuss them with a financial professional before the end of the year. Even if you're doing a little freelance work from a home office, you're technically running a business and have some new tax responsibilities that you didn't have working entirely for wages. One of those requirements is filing Schedule C, which is used to report income or loss from a business you operated as a sole proprietor. An activity qualifies as a business if your primary purpose for engaging is for income or profit and you're involved with continuity and regularity.
The COVID-19 pandemic made 2020 a rough year for everyone, and entertainers are among the hardest-hit groups. The shutdown of entertainment venues and production facilities across the country cut off a primary source of entertainers' incomes. But it did not cut off their creativity, as they moved online to showcase their talent.
The amount of taxes you should withhold from your pension is dependent on your tax rate and your household sources of income and deductions. Basically, you add up all your sources of income and subtract your deductions to get your taxable income.
|
Newsletter articles are posted every 2 weeks. If you would like to have our e-newsletter delivered directly to your inbox, please sign up. Your information is confidential; you can unsubscribe at any time. Subscribe. Categories
All
|
Menu
RSS Feed
Proudly powered by Weebly