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Taxes

Mar 17, 2021 Many people dread tax season. But if you're expecting a tax refund for the 2020 tax season - and even if you're not - you've got a couple of things to look forward to. Firstly, the IRS has extended the tax filing deadline by one month to May 17. Secondly, with your extra funds, you may be able to pay off some debt, start saving in a high-interest savings account or work with a financial advisor to set and reach investing and retirement goals. Most people will get their tax refund within three weeks, but it varies based on how you file and how you get your refund. Let's break down the refund schedule and how long it takes for the IRS to issue refunds. Read More...

Apr 30, 2021 The federal income tax rates remain unchanged for the 2019 and 2020 tax years: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The income brackets, though, are adjusted slightly for inflation. Read on for more about the federal income tax brackets for Tax Year 2019 ( due July 15, 2020) and Tax Year 2020 (due May 17, 2021). Go beyond taxes to build a comprehensive financial plan. Find a local financial advisor today. Read More...

Mar 17, 2021 President Trump signed the Tax Cuts and Jobs Act, into law in December 2017. This bill largely didn't affect individual income taxes until the 2018 tax year, which you filed in early 2019. How exactly the Trump tax plan affects you depends on your income, your current filing status and the deductions you take. But because of tax code changes, you might want to work with a financial advisor to optimize your tax strategy for your financial goals. Take a look at the following guide to help you better understand the main features of the new tax plan. Read More...

Jan 25, 2021 The start of a new year means it’s time to file your federal tax return. Many people stress about filing taxes but there are a number of tax filing services to make the process easier. Two of the most well-known services are H&R Block and TurboTax. They both offer a friendly user experience. They provide information along the way so you understand what you're doing. And they both offer affordable filing options. Which of these services should you use when you file your 2020 taxes? Go beyond taxes to build a comprehensive financial plan. Find a local financial advisor today. Read More...

Jan 22, 2021 Filing taxes yourself has never been easier. As long as you have internet access, you can submit your tax return from the comfort of your couch. Before you get started, however, you'll have to choose which online tax software to trust with all your financial details. That's not always easy. A financial advisor can help you take an extra step to align your tax strategy with your overall financial goals. Read More...

Jan 20, 2021 There are a number of ways to decrease your tax burden. The two most popular ones, though, are likely tax credits and tax deductions. While these may seem like they are the same thing, they are actually two very different mechanisms. A tax credit gives you a dollar-for-dollar reduction of the tax you owe, while a tax deduction lowers your taxable income for the year. Both, though, can save you some cash. For help with all tax issues, consider working with a financial advisor. Read More...

Jun 28, 2021 Seismic changes could be coming to the way America’s wealthiest investors are taxed. Under President Joe Biden’s $1.8 trillion American Families Plan, taxpayers whose incomes exceed $1 million would pay nearly twice the current long-term capital gains tax rate. While Biden’s tax proposal may have you looking to sell positions to stave off a hefty tax bill, a financial advisor can help you make sense of the potential changes and preserve your capital. Read More...

Jun 23, 2021 Investment tax must be paid on interest income and rent from investment property. You also pay investment tax on dividend and capital gains income from stocks, mutual funds and exchange-traded funds. Holding stocks and bonds in taxable accounts allows for a larger tax liability than if you hold the securities inside a retirement account with tax-deferred provisions. You may want to work with a financial advisor to determine the best mix of taxable and retirement accounts for your needs. Read More...

Jun 23, 2021 Dividends can be an important part of your income from investments, especially if you have significant fixed-income holdings. Internal Revenue Service Form 1099-DIV supplies you with all the information on your dividend income that you will use when you file your income taxes. Here are some instructions to assist you in preparing the dividend income portion of your federal tax return. Dividend reporting, though, can be tricky so consider working with a financial advisor as you create and maintain a tax-efficient portfolio. Read More...

Jun 21, 2021 Tax efficient investing allows investors to reduce, delay and otherwise manage taxes generated by investment activities, potentially improving after-tax returns. Investors can use a variety of methods to manage taxes efficiently, including selecting tax-advantaged investments, practicing tax-aware strategies and using IRAs, 401(k)s and other tax-deferring accounts. Sorting through the various ways to boost the tax efficiency of your investing can be confusing, which is why working with a financial advisor can help cut down on your tax bill. Read More...

May 21, 2021 The Internal Revenue Service (IRS) sends U.S. investors a myriad of tax forms every year. While the number and complexity of these forms can be off-putting and confusing, it's important that you understand them and what your responsibilities regarding these are. Here's an overview of common IRS investment tax forms and what you need to know about them. If you're uncertain about taxes on your investment consider working with a financial advisor. Read More...

May 21, 2021 Filing taxes may not be your favorite financial chore but it is a necessary one to stay in the good graces of the IRS. Why do I owe state taxes is a question you might have if filing your return has resulted in a tax bill rather than a refund. There are different reasons why you might owe state income taxes this year. Knowing what’s behind your state tax bill can help you plan ahead for next year so you don’t end up owing again. A financial advisor can help you avoid paying more than you need to the state and federal governments. Read More...

May 12, 2021 As part of your employee benefits package, you may have the option to own stock in the company you work for. You can own company shares inside your 401(k) but once you start taking distributions, those investments would be subject to capital gains tax. Applying net unrealized appreciation (NUA) to those distributions could help you to lock in a lower capital gains rate on the sale of company shares. If you have company stock in your retirement plan at work, NUA could help you save money on investment taxes. Working with a financial advisor can disclose a number of ways to save on your taxes. Read More...

May 04, 2021 The 2017 tax reform law ended the ability for most taxpayers to deduct expenses for working from home just in time for millions more people to begin working from in response to the Covid pandemic. Nowadays only a few select groups of salaried home-based workers can still deduct relevant expenses. However, even if you’re not one of these, there are still a few possible ways for you to get tax deductions from your expense for working from home. A financial advisor can help you find every deduction and credit you are entitled to. Read More...

Jun 04, 2021 President Joe Biden proposed doubling capital gains taxes for investors making over $1 million to fund his $1.8 trillion American Families Plan. This could compel some high-income investors to sell off assets before the tax hike takes effect. Others will look into alternate strategies to lower their taxes. Whether you're thinking about selling off investments or holding on to them, a financial advisor can help you optimize a tax strategy for your needs and goals. Let's take a look at what this tax increase could mean for investors, who will get taxed and what you can do to minimize capital gains taxes. Read More...

Mar 31, 2021 The Trump tax bill - formally known as the Tax Cuts and Jobs Act (TCJA) - nearly doubled the standard deduction while also limiting some itemized deductions. From 2017 to 2018, the standard deduction rose from $6,350 to $12,000 for singles, from $12,700 to $24,000 for married couples filing jointly and from $9,350 to $18,000 for heads of household. Additionally, the bill capped state and local tax deductions at $10,000, lowered the mortgage interest deduction and eliminated deductions for casualty losses and miscellaneous expenses. Read More...

Apr 01, 2021 Losing a loved one is a tragedy that requires space to grieve, and the last thing a family needs at that time is to deal with unexpected costs. However, there are federal and state-level taxes that need to be handled if the decedent had an estate or property to pass on. Knowing the differences between estate tax and  inheritance tax can help you plan ahead of time and navigate the process more smoothly. Most importantly, there may be responsibilities both the estate and the beneficiary have to manage. So, to understand these crucial “ death taxes” and your possible role in them, let’s compare both. Read More...

Apr 26, 2021 The White House and the U.S. Treasury Department have outlined the goals of President Joe Biden's tax plan, which include provisions to raise corporate taxes and eliminate incentives that allow companies to move profits overseas. These moves would mark the first major tax hike since the early 1990s. As a presidential candidate in 2020, Biden had also called for raising taxes on those earning more than $400,000, while benefiting lower-income families with tax credits for health insurance, childcare, long-term elderly care and first-homebuyers. Let's break down what the various tax proposals of the Biden administration could mean for American corporations and you. Note:  This is a developing story, and we will continue to update the article as more information becomes available. Read More...

Mar 04, 2021 The U.S. is a federal republic, meaning that power is held by both the central federal government, located in Washington, D.C., and by the governments of every state and territory that make up the union. But the “division of powers” isn’t as simple as it seems - and neither is the division of finances, since states rely on the federal government for money and various programs to help them operate. With all this in mind, SmartAsset crunched the numbers to see which states are the most dependent on the federal government. Read More...

Mar 02, 2021 Many foreign countries have higher income tax rates than the U.S., and others impose value added tax (VAT) charges that the U.S. does not. These foreign assessments can produce significantly higher tax bills for American individuals and companies that do business overseas. However, there is a way to have profits earned outside the U.S. taxed at the regular IRS rates rather than the other country’s rates. To qualify for these savings, U.S. citizens and businesses can submit IRS Form 6166 to the other country’s taxing authorities. If you're earning money outside the U.S., you should consult a financial advisor with relevant experience to make sure you don't overpay. Read More...

Feb 17, 2021 Social Security benefits can provide an additional income stream in retirement alongside withdrawals from a 401(k), individual retirement account or brokerage account. Part of shaping a retirement plan around Social Security income means planning ahead for taxes. Social Security benefits are considered taxable for some retirees, though whether yours are can depend on your income. If you’re wondering, how you can avoid paying taxes on Social Security, there are some strategies you can try. Do you have questions about your overall tax situation? Speak with a financial advisor today. Read More...

Jan 06, 2021 Savings bonds can be a safe way to save money for the long term while earning interest. You might use savings bonds to help pay for your child’s college, for example, or to set aside money for your grandchildren. Once you redeem them, you can collect the face value of the bond along with any interest earned. It’s important to realize, however, that interest on savings bonds can be taxed. If you’re wondering, how you can avoid paying taxes on savings bonds there are a few things to keep in mind. Of course, one key thing to keep in mind is that a financial advisor can be immensely helpful in minimizing your taxes. Read More...

Jan 06, 2021 Owning  a rental property can help you to grow wealth long-term and diversify your income streams. Receiving regular rental income can help supplement withdrawals you might make from a 401(k) or an  individual retirement account (IRA) in retirement or give you an extra cushion in addition to your regular paychecks if you’re still working. But rental income isn’t tax-free money; you do have to pay the IRS taxes on the income you earn. Capital gains tax can also apply when you sell a rental property. If you’re interested in how to avoid capital gains tax on rental property, there are some strategies you can try. It can also be helpful Read More...

Dec 01, 2020 Inheriting a home or other property can increase the value of your estate but it can also result in tax consequences. If the property you inherit has appreciated in value since the original owner purchased it, you could be on the hook for capital gains tax should you choose to sell it. That could result in a large tax bill if there’s a sizable gap between the original purchase price and the price you’re able to sell the property for. There are some possibilities for how to avoid paying capital gains tax on inherited property which are worth considering if you’re the beneficiary of an estate or trust Read More...

Dec 01, 2020 Taxes can take a big bite out of your income, especially if you’re in a higher income tax bracket. And even with careful planning, it’s possible that you could still be hit with an unexpected tax bill. The good news is, there are things you can do to keep more of your hard-earned dollars in your pocket instead of handing them over to the IRS. If you’re interested in how to avoid paying taxes legally or at the very least, minimize your tax liability each year, these tips and strategies can help. Read More...

Mar 25, 2021 The satisfaction of receiving a year-end bonus may soon be tempered by the realization that income taxes will have to be paid on the extra money. Bonuses are treated as income and thus subject to taxation, but there are ways to manage and reduce the amount of taxes that will be owed. And as is the case with other income from an employer, the employer is required to withhold taxes from a bonus, reducing your take-home pay from the windfall. A financial advisor can help you optimize a tax strategy for your bonus and invest that money in your retirement and other financial goals. Let's break down key strategies to avoid paying taxes on a bonus check. Read More...

Nov 18, 2020 Social Security benefits, including disability benefits, can help provide a supplemental source of income to people who are eligible to receive them. If you're receiving disability benefits from Social Security, you might be wondering whether you'll owe taxes on the money. For most people, the answer is no. But there are some scenarios where you may have to pay taxes on Social Security disability benefits. It may also behoove you to consult with a trusted financial advisor as you navigate the complicated terrain of taxes on Social Security disability benefits. Read More...

Nov 16, 2020 Every year, people's lives change in ways that affect their taxes. They may start a higher education program or have a child, and others take on elderly parents as dependents. These situations can change their eligibility for tax credits. In addition, federal, state and local governments sometimes adjust rules about credits, so it is crucial to understand what credits you can take. Navigating the world of tax credits and deductions can be confusing. That is why a  trusted financial advisor can help you find every tax credit you are entitled to. Read More...

Oct 22, 2020 Simply put, political contributions are not tax deductible. Americans are encouraged to donate to political campaigns, political parties and other groups that influence the political landscape. When it comes time to file taxes, though, many people are surprised to learn what qualifies as a tax deduction. If you support your favorite candidate, you might be wondering: Are my political contributions tax deductible? Though your political contributions may not lower your tax liability, it pays to have a nuanced understanding of where else in your donations  and spending you can secure tax deductions. Read More...

Oct 15, 2020 A wealth tax is a type of tax that's imposed on the net wealth of an individual. This is different from income tax, which is the type of tax you're likely most used to paying. The U.S. currently doesn't have a wealth tax, though the idea has been proposed more than once by lawmakers. Instituting a wealth tax could help generate revenue for the government but only a handful of countries actually impose one. Read More...

Sep 29, 2020 The question of tax dodging has been in the news a lot lately -- namely because of the New York Times Report that President Donald Trump, despite his claimed billions of dollars in wealth, paid only between $0 and $750 in taxes for the past several years. While rich people paying very little in taxes compared to their wealth isn’t exactly news for anyone who understands the American tax system, this has attracted attention, partially because the mystery of Trump’s tax returns has intrigued many since he entered the race in 2015. While there are still plenty of details to be worked out regarding Trump’s taxes, it is worth taking the time to consider the difference between tax evasion and tax avoidance, the latter of which can come in the form of tax credits, deductions and exemptions. If you want help with your own taxes to make sure you are legally lowering your tax liability, consider finding a financial advisor to guide you. Read More...

Sep 25, 2020 A financial transactions tax is exactly what it sounds like -- a tax levied on each transaction an investor makes in the financial markets. The U.S. does not have a significant financial transaction tax, but it has become a favorite cause of many progressives and left-leaning politicians -- including Senator Elizabeth Warren, who made a financial transactions tax a major part of her platform when she was running for the Democratic presidential nomination over the past few years. As the financial transactions tax continues to be a topic of national debate, it is worthwhile to understand how it works so you can be part of an informed discussion and so that you know what to expect if it ever becomes law in a substantial way. For help with all tax and investing questions, find a financial advisor using SmartAsset’s free financial advisor matching service. Read More...

Sep 18, 2020 Healthcare was already one of the most high profile and contentious political issues in America, but since the COVID-19 pandemic began it has become even more of a pressing topic. Donald Trump tried and failed to repeal the Affordable Care Act (commonly known as Obamacare) in the first year of his presidency but has mostly abandoned healthcare as an area of potential reform -- especially since the Republicans lost the House of Representatives in 2018. Democratic challenger Joe Biden, though, has a series of healthcare proposals that he hopes to enact if he wins in November. If you have questions about healthcare coverage or any other financial issue, consider finding a financial advisor with SmartAsset’s free financial advisor matching service. Read More...

Mar 11, 2021 President Trump's 2017 Tax Cuts and Jobs Act made big changes to the tax code, specifically in deductions and tax brackets. President Biden is now poised to reverse different aspects of the 2017 tax overhaul, calling for higher taxes on capital gains and high net worth individuals. Let's break down the differences between both tax plans below. A financial advisor can help you keep up with tax code changes and optimize a tax strategy for your financial needs and goals. Read More...

Oct 29, 2020 Tax policy is one of the more inscrutable parts of American politics, yet it's one of the areas that impacts the most people on a day-to-day basis. Former Vice President Joe Biden, the Democratic presidential candidate, has released a number of proposed tax policies, but it's understandable if you aren’t sure exactly what they mean for you, your family and your business. This article breaks down the key points of Biden’s tax and financial policies and explains exactly how they could impact you if Biden were to take the Oval Office next January. No matter who wins in November, a financial advisor can help you make the most out of your money. Read More...

May 27, 2020 Though it may not always be apparent to the average citizen, the federal government is responsible for many of the everyday conveniences that help the country operate. Even some state programs are ultimately paid for by federal government money through intergovernmental aid. SmartAsset wanted to see which states are ultimately most reliant on the federal government for their operations, so we crunched the numbers to find out. Read More...

Jun 16, 2021 Due to the COVID-19 pandemic, the federal government extended this year's  federal income tax filing deadline from April 15, 2021, to May 17, 2021. In addition the IRS further extended the deadline for Texas, Oklahoma and Louisiana residents to June 15. These extensions are automatic and applies to filing and payments. If you need more time than the May 17 or June 15 deadlines, you can file for an extension to Oct. 15 with Form 4868. The deadline to submit this form is April 15. This extension, however, is only for filing - it does not apply to payments. So if you owe money for 2019, an extension will not buy you more time. You will still owe penalties and interest if you don't pay by May 17. Taxes likely won't be the only aspect of your finances to be affected by the COVID-19 pandemic.  Talk to a financial advisor about your plans today. Read More...

Jan 08, 2020 A charitable gift annuity allows you to donate money to a non-profit, such as your alma mater. Planned giving can include charitable gift annuities. You can give back and get tax benefits. Meanwhile, you'll receive an additional stream of income for the rest of your life. Here's how to set it up and benefit from it. Read More...

Oct 12, 2020 Excise taxes apply to specific goods and services. Businesses that make or sell chosen goods and services pay most of these taxes. As a consumer, you generally won’t get a bill for excise tax. If you purchase a good or service subject to an excise tax, though, you’ll pay it nonetheless -- businesses generally include cost of the tax in the prices they charge. For help with taxes and other financial issues, consider working with a financial advisor. Read More...

Oct 31, 2019 Before you see a dollar of lottery winnings, the IRS will take 25%. Up to an additional 13% could be withheld in state and local taxes, depending on where you live. Still, you’ll probably owe more when taxes are due, since the top federal tax rate is 37%. So the best first step lottery winners can take is to hire a financial advisor who can help with tax and investment strategies. Read on for more about how taxes on lottery winnings work and what the smart money would do. Read More...

Oct 25, 2019 Maintaining a home office for your business can yield a benefit at tax time if you're able to claim a deduction for your expenses. The IRS lays out the rules for deducting home office costs in Publication 587. There's a common myth about this deduction triggering an audit. But that shouldn't stop you from claiming it if you're eligible. Here's more on how this deduction works and what it covers. Read More...

Jan 07, 2020 A taxpayer advocate is an employee of the Office of the Taxpayer Advocate, also known as the Taxpayer Advocate Service (TAS). Working closely with, but independent of, the IRS, a taxpayer advocate can help you resolve tax disputes you might have with the IRS. While there's no guarantee that you'll see the result you want, working with a taxpayer advocate is the first step towards working out a tax issue. Best of all, the service is free if they agree to take on your case. A CPA or tax attorney can also be a big help in dealing with tax issues. If you'd like to take a more holistic view of your financial plan and long-term tax planning, consider working with a financial advisor. Read More...

Oct 01, 2019 The Lifetime Learning credit is a tax credit for college expenses, though it can also be claimed for tuition paid for graduate courses, vocational schools and continuing education courses. The credit is worth up to 20% of the first $10,000 in qualifying expenses, for a maximum credit of $2,000. To qualify, you must have made tuition and fee payments to the educational institution in question during the tax year. However, if your income is too high during the year, you may not be able to claim the Lifetime Learning credit. We'll walk through what expenses do and don't qualify, and how to claim it on your taxes. Read More...

Jan 20, 2021 When you sell a depreciated capital asset, you may be able to earn "realized gain" if the asset's sale price is higher than its value after deduction expenses. You'll then be able to recapture the difference between the two figures after you report it as income. Depreciation recapture is popular among taxpayers because it allows them to save when it comes to taxes. Instead of accounting for your asset's entire value at the date of your purchase, you can spread out its cost over time, allowing you to earn tax deductions for its duration. But this process varies for different types of assets. Below, we explore how depreciation recapture works on your taxes. And if you want hands-on guidance when it comes to lowering your tax liability on your investments, consider enlisting the help of a trusted financial advisor in your area. Read More...

Jan 20, 2021 There are two key education tax benefits that can help families who are paying for college: the Lifetime Learning Credit and the American Opportunity Tax Credit (AOTC). In general, it may be wise to take the American Opportunity Tax Credit if you qualify. It could provide a larger credit, and you may not have to spend as much in order to get it. Here's how to know if you qualify for the American Opportunity Tax Credit, plus how it works. For help with all types of tax and other financial questions, consider working with a financial advisor. Read More...

Mar 25, 2021 When filing taxes, it's important to make sure you're reporting all of your income correctly. That includes making note of early distributions from qualified retirement plans or other tax-favored accounts that may be subject to a 10% early withdrawal penalty. Failing to report those distributions could result in a major tax headache if the IRS determines you owe additional taxes or penalties later. If you've taken a withdrawal from an individual retirement account (IRA) or another account with tax-advantaged status, you may need to file IRS Form 5329 with your regular income tax return. Here's what you need to know about when you're required to submit this form and how to fill it out to avoid any tax snafus. If you need some hands-on expert advice as you navigate your retirement withdrawals, consider enlisting the help of a trusted financial advisor. Read More...

Jan 05, 2021 For individuals, gross income is the total pay you earn from employers or clients before taxes and other deductions. This is not limited to income received as cash, as it can also include property or services received. On the other hand, net income refers to your income after taxes and deductions are taken into account. For companies, gross income is revenue after cost of goods sold (COGS) has been subtracted. That makes a business' net income equal to profit, or net earnings. A long-term financial plan should account for your income taxes. Speak with a local financial advisor about your financial plan. Read More...

Apr 28, 2021 In the world of accounting, finance and taxes, there's more than one type of year. In addition to regular years, there are a number of different fiscal years. A fiscal year is the 12-month period a company uses for accounting purposes. Here's how it works and why it's important in business and taxes. A financial advisor can help you create a financial plan for your business needs and goals. Find a financial advisor today. Read More...

Jan 21, 2021 If you're self-employed or a freelancer, you likely get paid as an independent contractor rather than an employee. The IRS defines an independent contractor as someone who performs work for someone else, while controlling the way in which the work is done. In other words, someone pays you to perform a service or deliver a product, but they only have a say in the final outcome. As an independent contractor, there are some unique responsibilities where taxes are concerned. Understanding the guidelines for filing and paying taxes as an independent contractor can help you avoid issues with the IRS. A financial advisor can also help you optimize your tax strategy for your financial goals and needs. Read More...

Jan 22, 2021 Paying for health insurance and medical bills can get expensive. Luckily, you can recoup some of those costs when you file your taxes by taking a deduction for medical expenses. To do so, the expenses in question must meet the qualifications outlined by the IRS. We'll show you how to figure out whether your expenses qualify, and how to calculate and take your deductions. And once you've figured out your deductions, a financial advisor could help you connect your tax strategies with your overall financial goals. Read More...

Dec 11, 2019 If you're considering buying a new home, a tax abatement may provide an incentive that's hard to pass up. These beneficial tax programs allow for a long-term break on your  property tax bill. Savings like that will undoubtedly impact your bottom line in a positive way. However, tax abatements are only available in specific areas of certain cities, so you may need to do some digging.  Read More...

Jan 08, 2020 Doing your taxes is never easy, but for small business owners there are some extra layers of complexity. Schedule C is a tax form that some small business proprietors use to file their tax returns each year. For those using it, command over the Schedule C is an important part of making sure they are compliant with federal regulations and not paying more in taxes than they need to be. If you want help with your small business taxes, consider finding a financial advisor with SmartAsset’s free financial advisor matching service. Read More...

Mar 19, 2021 Net income refers to a company’s earnings minus business and operating expenses. An individual’s net income is equal to total income minus applicable deductions and taxes paid. Net income helps you understand how profitable your business is. If you’re an investor, it can help you analyze a company’s stock. And as an individual, it can help you understand your actual take-home pay. If you want hands-on guidance as a business owner or investor with net income, check out our free financial advisor matching tool to link up with up to three advisors in your area best suited to your particular needs. Read More...

Dec 21, 2020 Adjusted gross income, or AGI, is extremely important for filing your annual income taxes. More specifically, it appears on your Form 1040 and helps determine which deductions and credits you are eligible for. Based on the amount of your AGI, you can then figure out how much you'll owe in income taxes. For tax year 2020, yo can find your AGI on page 1, line 11 of the  IRS Form 1040. As you take care of your taxes, make sure you have an adequate financial plan in place.  Talk to a financial advisor today. Read More...

Mar 26, 2019 A large majority (75%) of taxpayers overpay on taxes and receive a tax refund, according to IRS data. A smaller proportion (19%) see the opposite: They will have overestimated their withholdings and learn they still owe the IRS some money. Apart from overpaying and underpaying, there is another small, exclusive group of savvy Americans who manage the Goldilocks fantasy: withholding just the right amount so, come tax time, the tax balance between them and the IRS reads an even zero. Read More...

Jan 22, 2021 For many employees in America, especially those at tech companies and other startups, stock options are a part of compensation packages. While the right to buy stock in a company at a set price is an attractive form of compensation, stock options have more complex tax implications than straight cash. Many taxpayers will use a  financial advisor to help them develop the best tax strategy for their investments. Let's take a look at how your tax return will change depending on whether you have incentive stock options (ISOs) or non-qualified stock options (NQSOs). Read More...

Dec 10, 2019 The U.S. experienced a partial government shutdown from Dec. 22, 2018 to Jan. 25, 2019. This 35-day shutdown was the longest in U.S. history and disrupted the service of multiple federal agencies, such as the National Park Service. However, the IRS did not stop work entirely, and never does during a shutdown. Many of its employees were furloughed (temporarily laid off) and some services experienced interruptions or delays, but others didn’t. What does this mean for your tax return? Read More...

Mar 18, 2021 Donating your car to charity is a thoughtful and generous act. It's also one that can save you some money on taxes. Many non-profit organizations that take automobile donations advertise it heavily, but doing research is necessary before you hand over your keys. Here's what you should know if you want to find the best charities to donate your vehicle. Read More...

Jan 20, 2021 If in 2020 you gave someone cash or property valued at more than $15,000, you’ll have to fill out Form 709 for gift tax purposes. But don’t fret. This doesn’t always mean you’ll owe an actual tax. The government requires this to keep track of your lifetime gift and estate tax exemption. Only once you use up that large exemption would you owe an out-of-pocket tax. Still, filling out Form 709 can get complicated. This article will walk you through the process step-by step. It'll also help you determine if you need to fill out a Form 709 in the first place. We can also help you work with a financial advisor who can guide you through the process so you won't get in trouble with the IRS. Read More...

Feb 22, 2019 Filling out your taxes can be a real headache. It’s no surprise, then, that online software like TurboTax has been growing in recent years to meet the demands of taxpayers in need of expert advice. But there are more resources available to you beyond tax software. Many states have programs to help taxpayers fill out their forms, and some states have an abundance of high-skilled accountants ready to work for those willing to pay. And, given the potentially severe consequences of a tax-filing mistake, the cost may well be worth it. Of course, not all states are equally equipped to help you stay in good standing with the IRS. Below, we look at the best states to get help completing your taxes. Read More...

Feb 22, 2019 About 75% of American taxpayers overpaid on taxes in tax year 2016, according to IRS data. And though they may have been overjoyed to get a handsome tax refund, this scenario means they are simply being reimbursed for money they've lent the government. This tax season, whether or not an individual has a windfall on the way depends on his or her tax-planning savvy, but residents of certain states overpay more on their taxes and thus get higher refunds.   Read More...

Apr 14, 2020 One of the most popular ways to organize a business is as a limited liability company, otherwise known as an LLC. LLCs require less paperwork than C corporations and S corporations, while giving owners some of the same protections against being held personally liable for any actions of the business. But the true advantage of this title comes in the form of tax benefits. LLCs give business owners significantly greater federal income tax flexibility than a sole proprietorship, partnership and other popular forms of business organization. Make sure you have a financial plan in place for your small business. Talk to a financial advisor today. Read More...

Dec 12, 2019 California doesn’t enforce its own gift tax. However, the federal government does. That tax rate can climb to as high as 40%. Still, there are plenty of ways you can minimize the hit or avoid it all together. For the 2019 and 2020 tax years, you can give away up to $15,000 to any individual without triggering a gift tax. But even if you go over the limit, you may just need to file some extra paperwork come tax time. You won’t owe an actual tax until you exceed your lifetime gift and estate tax exemption. We’ll explain how that works, and how you can give without ever setting off a gift tax. But first, let’s define what a gift really is in the eyes of the IRS. We can also help you find a financial advisor to develop a personalized gift-tax strategy. Read More...

Jan 25, 2019 It can be difficult to look at your paycheck and see upwards of 15% of it sent to the government. Of course, those taxes pay for worthwhile causes, a fact that doesn’t always lessen the initial sting of seeing your money disappear. Thanks to local and state taxes, though, residents in some places have it much worse than others. Below, we look at data from the 25 largest cities to estimate how much the average full-time worker pays in income taxes. Read More...

Jan 04, 2019 An annuity can provide you with income that is guaranteed for as long as you live.  These retirement savings vehicles do provide some tax benefits by letting earnings grow tax-deferred. However, at least part of your annuity payments may be subject to federal income taxes. Throughout this guide, we highlight the different ways the IRS taxes annuities. Read More...

Mar 18, 2021 North Carolina no longer enforces its own gift tax. However, you may trigger a gift tax at the federal level depending on the value of the gifts you provide.  But you won’t owe a gift tax until you breach your lifetime gift and estate tax exemption. The Tax Cuts and Jobs Act signed by President Donald Trump recently raised that threshold dramatically, and it now stands at $11.7 million for individuals in 2021. Nonetheless, you may still have to report some gifts that fall far below that value in order to avoid trouble with the IRS. But don’t worry. We’ll explain exactly how the gift tax works. We’ll also cover steps you can take to steer clear of this tax you may unwittingly trigger. We can also help you find a financial advisor to help you navigate the IRS rules, so you can stay generous without letting the government get in your way. Read More...

Mar 18, 2021 There is no Florida gift tax, but the federal government enforces one. Nonetheless, you may just need to report a gift to an individual in a particular year that’s valued at more than $15,000. In most cases, you won’t pay an actual gift tax unless you exceed your lifetime gift and estate tax exemption. The Tax Cuts and Jobs Act recently raised that threshold significantly. We’ll explain how gift taxes work in detail, as well as ways you can legally avoid them or minimize the hit. We can also help you find a financial advisor to help you with all estate planning and tax-related matters. Read More...

Dec 12, 2019 New Jersey doesn’t have a gift tax. However, you may still owe a federal gift tax if the value of the gifts you provide exceed a certain amount. Following the passing of the Tax Cuts and Jobs Act, the federal gift tax exclusion rose to $15,000 a year. So you can give someone $15,000 worth of cash, assets or property annually without worrying about a gift tax. You would have to report it if you breach that threshold. But you won't owe anything out of pocket until you exceed your lifetime exclusion limit. This article will cover everything you need to know about the gift tax as well as steps you can take to avoid or minimize your tax payment obligations. We can also help you find a financial advisor to help you with your estate planning. Read More...

Dec 12, 2019 Minnesota no longer enforces its own gift tax, but you may still owe one at the federal level if you exceed your lifetime gift and estate tax exemption. However, the Tax Cuts and Jobs Act signed into law by President Trump raised that limit to $11.4 million for 2019 and $11.58 million in 2020 per individual. Still, you may need to report a gift if it’s valued at more than $15,000. But don’t worry. We’ll explain exactly how gift taxes work and what you need to watch out for. We’ll also explain how to make non-taxable gifts and steer clear of a potential gift tax. We can also help you find a financial advisor who can guide you through the entire estate planning and charitable giving process. So let's begin with exploring what the IRS taxes in the first place. Read More...

Mar 18, 2021 Connecticut increased its lifetime gift tax exemption to $7.1 million for tax year 2021, and it will continue to climb in the coming years. The exemption will be $9.1 million in 2022. This means you won't owe a Connecticut gift tax unless the gifts you provide in those years exceed their corresponding exemption levels. But even if you do, there are plenty of steps you can take to protect your assets and your estate from taxes. This article will explain everything you need to know about Connecticut and federal gift taxes, as well as ways you can steer clear of these taxes. We can also help you find a financial advisor to guide you through the entire estate planning process. Read More...

Jan 21, 2021 If you recently received a sizable gift from Mom and Dad, don’t fret about the gift tax. The IRS generally holds the giver liable for taxes. And unless the person is handing over a small fortune, he or she won’t owe any gift taxes either. But if your parents are being generous, you might want to fill them in on how the IRS views the transfer of money. This article would help you understand all about the gift tax. But because rules behind calculating gift tax can be complex, your parents should find a financial advisor if their gift might trigger a tax bill. Read More...

Mar 19, 2021 If you run your own business, you need a way to identify it to the government when it comes time to do your taxes. The same is also true if you're the executor of an estate, the creator of a trust or the founder of a non-profit. The way entities accomplish this is with an Employer Identification Number (EIN). If you don’t yet have an EIN, you can apply to receive one with IRS Form SS-4. Read More...

Dec 24, 2020 Selling a home is a major life change. Maybe you’re moving into a bigger house after outgrowing your starter home, or you're downsizing as your kids go off to college. Or, perhaps, you're buying a house in a different part of the country because of a new job. No matter what your reason is, selling the place you’ve called home is a big deal. One potentially confusing part of the process is figuring out the taxes on selling a house and how the sale will impact your finances for the years to come. Read More...

Nov 14, 2019 If you have a traditional IRA, you will need to start taking  required minimum distributions (RMDs) when you reach age 70.5. As traditional IRAs are tax-deferred, you will need to pay federal income tax on these distributions, but you can avoid those taxes if you donate your RMD directly to a qualified charity. Here's what you need to know about IRA charitable rollovers. And if you need hands-on help navigating IRA charitable rollovers, consider enlisting the help of a trusted financial advisor. Read More...

Jan 05, 2021 Being a landlord can significantly bolster your savings, but it's also a lot of work. On top of the finances and responsibilities of your own living space, you have to find tenants, secure insurance and pay a mortgage and property taxes. Renting a home can also complicate your personal tax situation. Luckily, Uncle Sam allows you to deduct some expenses associated with running a rental property. The IRS stipulates that deductible expenses must be ordinary and generally accepted in the rental business, along with being necessary for managing and maintaining the property. From mortgage interest and insurance to utilities and repairs, we'll walk through some rental property tax deductions landlords should take advantage of. Consider also working with a financial advisor who can help manage the tax and financial impact of your real estate holdings. Read More...

Sep 25, 2018 There are a lot of reasons to give to charity. The most obvious is that you're giving money to a cause or group that you believe in. This can make you feel like you’re making a difference in the world. However, there is a common reason beyond that to make a donation: the charity tax deduction. When you give money to charity, you can use the gift to reduce the amount of money on which you must pay taxes. It’s a fairly simple process to get the charity tax deduction, though it does require you to take a few actions to get the most out of your donation. This guide will take you through how to get your charity tax deduction, what qualifies as a charity tax deduction and other questions about the process. Read More...

Jan 13, 2020 The Social Security tax is one reason your take-home pay is less than your income. The tax of 6.2% (on income up to $132,900) is deducted from your pay and appears on your paycheck stub either as FICA or Fed OASDI/EE. Your employer also pays 6.2%, making for a total  Social Security tax of 12.4% per employee. Read on to learn what the pay-stub acronyms stand for, whether the self-employed have to pay the tax and if there's any way to avoid paying it. Read More...

Jan 20, 2021 The first-time homebuyer tax credit emerged during the 2008 financial crisis to help make buying a home more affordable for Americans. Though various other mortgage programs and loans exist, the tax provision here was strictly for first-time homebuyers. Simply put, it offered homebuyers a significant tax credit for the year in which they purchased their home. Unfortunately, this credit no longer exists. Below, we discuss what the tax credit program did, and explore additional mortgage programs that can still help you save on your first home. A financial advisor can also help you plan for buying a home and determine which deductions and credits you may qualify for. Read More...

Jan 21, 2021 When you're filing your taxes, there's a whole lot to consider. From figuring out who counts as a dependent to organizing your income streams, you may find the process a bit overwhelming. And if you're a new homeowner tackling mortgage payments, there's another key question you'll want to know the answer to this tax season as you try to lower your tax liability: Are closing costs deductible on your recent home purchase? A financial advisor can help you optimize your tax strategy for your property and family needs. Below, we give you the rundown. Read More...

Jul 19, 2018 State and local taxes (SALT) are a frustrating part of living in a high-tax locale. Before the passing of the Tax Cuts and Jobs Act at the end of 2017, which ushered in sweeping tax legislation overhaul, Americans could deduct state and local taxes, including income and property taxes, from their federal income taxes. Under the new tax law, that deduction has been capped at $10,000. This change will disproportionately affect residents who pay high state and local taxes. Read More...

Mar 18, 2021 IRS Form W-4 tells your employer how much federal income tax to withhold from your paycheck. You'll be asked to fill one out when you start a new job. You can also submit a new W-4 to your HR or payroll department when you have a life event that affects your taxes - e.g., getting married or divorced or having a baby - or if you paid too little or too much in taxes. The form used to be a bit complicated, but the IRS simplified it for 2020 and beyond. Now there are only five steps, three of which you can skip if you are the only breadwinner in your family, have only one job and have no dependents. The two mandatory steps involve providing your name, address, Social Security number, filing status and signature. Read More...

Jan 22, 2021 If you’re getting a divorce, the tax implications probably are not the most pressing issue on your mind. The specifics of filing taxes after divorce and how you draw up your divorce agreement could make a big difference when it comes to  your tax refund. Many couples consult  financial advisors to help them divide assets and plan for a financial future after divorce. As you prepare for your divorce needs, here are some important things to think about so you can stay on top of your taxes.  Read More...

Jan 20, 2021 Earning dividends is a great incentive for investing in certain companies or mutual funds. Dividends are particularly useful for people who need to supplement their retirement income. However, you will need to pay tax on any dividends you receive. Your dividend tax rate will depend on what type of dividends you have, how much you made from those dividends and how much other income you have. It can also be helpful to consult with a financial advisor to learn more about dividends and dividend taxes. Read More...

Jan 22, 2021 For many Americans, filing federal income taxes means getting a refund. The average tax refund, according to the IRS, was $2,535 as of November 2020. Taxpayers often rely on this money to boost their  retirement savings and  invest it with a financial advisor. But what happens when you need the money before the IRS sends your refund? You may want to consider a tax refund loan. It functions like other short-term loans, but the loan amount is based on your refund amount. Refund advances are also a popular alternative. Let’s take a look at whether you should consider a tax refund loan and where you can get one. Read More...

Jan 20, 2021 Once you've gone through the burdensome process of filing your taxes, your sigh of relief might be short-lived. That's because you'll likely be wondering, "How long does it take to get a tax refund?" But as excited as you may be to get that refund check from your federal income tax return, you may be disappointed with IRS' processing times. So as you plan your budget for the year, let's look at how long it will take to get your federal tax refund. Go beyond taxes and build a comprehensive financial plan for your future. Speak with a local financial advisor today. Read More...

Mar 18, 2021 President Donald Trump signed a law that dramatically overhauled the U.S. tax code in December 2017. The law created new income tax brackets that changed what many Americans pay in taxes. Most changes went into effect on Jan. 1, 2018 and so they didn't affect your  tax return until the 2018 tax year, which you filed in 2019. Let's take a look at the 2020 tax brackets, and compare them with 2019 and 2017 brackets to see how the Trump tax plan could have affected your tax return. And depending on these changes, you might want to work with a financial advisor to help maximize your tax strategy for your finances. Read More...

Mar 17, 2021   There are many reasons your tax refund could be delayed. Perhaps your numbers and your employer's numbers didn't match. Or you accidentally skipped a line—or an entire form. Or maybe you claimed a credit that the IRS takes longer to check. This year, however, the mostly likely reason your tax refund is delayed is that you filed a paper return. There was an additional backlog of tax returns created by the COVID-19 pandemic. While IRS workers have been back at work for a while, there is always a chance this is still impacting your return. Of course, the reasons for a delayed tax refund before the coronavirus crisis may still apply. Read on for more reasons and how to prevent future delays. Go beyond taxes to build a comprehensive financial plan. Find a local financial advisor today. Read More...

Jan 22, 2021 When you file federal income  tax return, you have the choice between taking the standard deduction and itemizing your deductions. The option that you pick should depend on which strategy will maximize your tax benefits. Your calculations may also have changed recently because of the new tax plan passed by President Trump and Congressional Republicans. Here’s a look at who should itemize under the new tax plan. A financial advisor can help you figure out exactly what you should do with your taxes. Read More...

Dec 12, 2019 If you're investing in cryptocurrency, it's important to know how these currencies - and any gains you earn from buying and selling them - are taxed. The IRS has done its best to keep taxpayers apprised of the relevant rules. In 2014, it released guidance to taxpayers informing them that cryptocurrency transactions, which the agency referred to as virtual currency transactions, must be reported on income tax returns. It issued further guidance in 2019 concerning the tax treatment of specific types of cryptocurrency transactions. In this article, we'll discuss this guidance and all the tax rules you need to know. Read More...

Mar 17, 2021 When you file your federal income tax return, you can check the status of your tax refund by visiting the IRS website or its mobile app. However, each state has its own process for handling state income taxes. If you expect a refund, your state may take only a few days to process it or the state may take a few months. There is no hard-and-fast rule but you can expect paper returns taking significantly longer to process than e-filed returns. Luckily, each state with an income tax also has an online system that lets you check the status of your state tax refund. Go beyond taxes to build a comprehensive financial plan. Find a local financial advisor today. Read More...

Mar 17, 2021 When filing federal income taxes, everyone has to choose a filing status. There are five filing statuses: single, married filing jointly, married filing separately, head of household and qualifying widow/er with dependent child. Most people are only eligible for one or two of the statuses and your status is likely to change at some point in your life. One common change is going from filing single to filing married. In this article, let's look at how your tax situation could change when your filing status changes from single to married. Planning your family’s finances goes beyond just taxes. Find a local financial advisor today. Read More...

Mar 18, 2021 Everyone filing federal income taxes for the 2020 tax year will need to get their returns in by the filing deadline. The original deadline was April 15, 2021, but it has been pushed back to May 17, 2021, due to the ongoing Coronavirus pandemic. This is the one general date by which most filers need to get returns in; you may have a different deadline if you filed for an extension or if you are a corporation. Here's a rundown of all the deadlines you need to keep track of. Read More...

Mar 17, 2021 Want to get a big tax refund come tax filing season? You can minimize your tax liability, and potentially snag a larger refund, by taking advantage of every possible tax break. In this article we'll discuss a few strategies to keep in mind as you look to get the biggest refund possible. Keep in mind, though, that if you want to go beyond this year's tax refund and minimize taxes on your long-term financial plan, your best bet is to find a financial advisor. Read More...

Mar 14, 2018 If filing your federal income taxes has you filled with apprehension, you may want to find a tax filing service to help you. The right service will not only take the pain out of filing your taxes, but it will also give you confidence by helping you understand the process. Different people will want different features from a tax filing service, but there are a few things you should always look for. For example, you want responsive technical support no matter how much you know about taxes. Below are six things you should look for when choosing a tax filing service. Read More...

Mar 26, 2018 After filing your federal income taxes, the wait for your tax refund is on. But you might want to take a step back before you spend that "extra" money. It helps to have a plan for how you'll spend. That way, you can avoid blowing the whole refund on things you don't really need. There are ways to spend that cash to better your financial situation, especially in the long run. Read More...

Jan 25, 2021 If you own an investment property and collect rent from your tenants, it's important to declare that rental income on your taxes. You can, however, deduct expenses you incur to maintain your rental property. In other words, becoming a landlord for the first time will make filing your taxes more complicated. If you need help with taxes, consider working with a financial advisor. Read More...

Jan 25, 2021 When you start a new job, there's a lot of paperwork to fill out, from direct deposit documents and benefits enrollments to your W-4 form. But when you're a contractor or self-employed person, income taxes work a little differently. You will still have to report your earnings to the IRS, and the companies that use your services will have to report those earnings, too. That’s where the W-9 form comes in. Planning out your taxes is just one aspect of your financial plan. Talk to a financial advisor in your area today. Read More...

Mar 18, 2021 Hollywood and New York City probably come to mind when you think about the places with the most million-dollar earners. While location plays a part in how much money you earn, there are other factors that can help you reach millionaire status. Plenty of patient saving is most likely required. Many people seek professional advice from a financial advisor to help them make the best decisions about their finances. Below, we looked at the unique economic profiles of each state through IRS data to find the states with the most million-dollar earners. Read More...

Dec 24, 2020 With the new year starting, it’s just about the time to file your federal tax return. But there’s no need to get stressed out. Tax filing services are making it easier than ever to file your taxes. You will, of course, need to choose between those filing services. Let's compare two of the largest tax filers: TurboTax vs. TaxSlayer. Read More...

Jan 31, 2018 For most people, the only fun part of doing your taxes is getting your tax refund. Not everyone receives a refund. Technically speaking, tax refund is money you overpaid in taxes, meaning it was always your money and the government was just "borrowing" it for a while. Regardless, it always feels good to get a large check. Below we look at this topic at a state level, to determine which states have the largest average income tax refund. Read More...

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