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Taxes

Dec 30, 2022 If you're like most people, you dread tax season. But if you're expecting a tax refund, you may have something to look forward to. Most people will get their tax refund within three weeks of filing, but it varies based on how you file and how you get your refund. If there's extra money coming your way from the IRS, you may be able to pay off some debt, build an emergency fund using a  high-interest savings account or work with a financial advisor to set investing and retirement goals. Read More...

Nov 18, 2022 The federal income tax rates remain unchanged for the 2022 tax year are 10%, 12%, 22%, 24%, 32%, 35% and 37%. The income thresholds for each bracket, though, are adjusted slightly every year for inflation. Read on for more about the federal income tax brackets for Tax Year 2022 (filed by April 17, 2023). You can also work with a financial advisor who specializes in taxes to craft a financial plan that helps you to make sure you don't overpay on your taxes. Read More...

Dec 27, 2022 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. Read More...

Dec 29, 2022 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. Each is known for offering a friendly user experience. In fact, they both provide information along the way so you understand what you're doing and they offer affordable filing options. This makes them both viable tax filing options, though which is best for you will vary based on your needs. If you have questions about how to minimize your taxes, consider working with a financial advisor. Read More...

Jan 22, 2023 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 11, 2023 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 your tax strategy, consider working with a financial advisor. Read More...

Jan 24, 2023 Whether you're a business owner who relies on independent contractors or you make your living as a freelancer, understanding the difference between Form 1099-MISC and 1099-NEC is critical to ensuring  tax season runs smoothly. While Form 1099-MISC is used to report payments that aren't subject to self-employment tax, 1099-NEC reports non-employee compensation. A financial advisor may be able to help optimize your tax strategy as part of a comprehensive financial plan. Read More...

Jan 24, 2023 When you're starting with any investment, it's always good to be aware of the tax implications. This is especially true when investing in real estate. Because the government wants to encourage real estate investment, there are several real estate investing tax strategies that investors can take advantage of. Let's go over five of the major tax strategies and how you can make them work for you. A financial advisor can help you optimize a tax strategy for your real estate investments and goals. Read More...

Jan 18, 2023 For most Americans, tax day comes once per year. That’s not the case for businesses though. If you own a business, you have to file tax forms on a regular basis. There are deadlines you must stay on top of from quarterly income taxes to paying payroll taxes. Below are the deadlines that small businesses need to worry about and when they will occur in 2023. If you're looking for tax automation for your small business, consider working with a financial advisor. Read More...

Jan 11, 2023 Trust fund taxes are a common form of tax withholding. These are the taxes that W-2 employers withhold from their employees’ paychecks for Medicare, Social Security and income tax programs. They are otherwise known as payroll taxes. Let's break down how they are taxed. A financial advisor can help you optimize your financial plan to lower your tax liability. Read More...

Jan 05, 2023 When you're saving for retirement, there are a variety of accounts you could use. The Roth IRA, or individual retirement account, is one of those options. Roth IRAs offer more investment flexibility, as well as their own tax benefits. Understanding how a Roth IRA is taxed is essential to taking full advantage of it. It's important to understand how Roth IRAs are taxed, especially when it comes to gains and withdrawals. You can work with a financial advisor who can help set your retirement and tax planning strategies up in ways that can benefit you.  Read More...

Jan 05, 2023 After losing a loved one, responsibilities can quickly pile up during a time when you’d like to focus on grieving. Unfortunately, taxes don’t disappear when someone passes. If you’re the executor of your loved one’s estate, you’ll be responsible for filing a tax return and paying any balance due to the Internal Revenue Service. If their estate is valued over a certain threshold, you’ll be responsible for filing a regular return and a complex return called an estate tax return. Here’s what you need to know about who needs to file these returns and how to file them. A financial advisor can walk you through the tax requirements of an estate plan. Read More...

Jan 04, 2023 Contrary to general belief, you cannot file your taxes on Jan. 1. Although April 15 is the standard deadline for the latest day you can file your taxes, the IRS also has deadlines for the earliest it begins accepting returns each year. You also can't file your returns until you've received the necessary tax documents from employers or other parties you've worked with. They typically have until the end of January to send these out to you. If you need help with filing your taxes then you may want to consider working with an experienced financial advisorRead More...

Jan 03, 2023 Getting divorced can have financial implications for how you file taxes. One question you might have is whether both of you can claim head of household if you maintain separate residences but share children. The IRS allows legally separated or divorced parents to claim head of household for a dependent child, but there are some requirements you’ll need to meet first. A financial advisor can help you optimize your financial plan to lower your tax liability. Read More...

Jan 03, 2023 Flipping houses can be a lucrative business. But don't let the idealized house-flipping TV shows affect your view of how it works. You need to be experienced, funded and knowledgeable about what you're doing. That's especially true when it comes to flipping houses and taxes. This real estate guide breaks down what to expect with house flipping taxes. A financial advisor can help you create a financial plan for your real estate investment goals and help protect your business from financial mistakes. Read More...

Jan 03, 2023 Giving money to a good cause can lift our spirits, but can it also lift our tax burden? What about if we’re not donating to a charity, but to a church? Church, synagogue and mosque donations are tax-deductible, as long as your church meets the 501(c)(3) regulations set by the Internal Revenue Service. Whether or not you actually benefit from a deduction depends on your record keeping and if you itemize your deductions. If you intend to make a charitable donation, a financial advisor can help you figure out whether it is tax-deductible and how it impacts your taxes.  Read More...

Jan 03, 2023 Although swaths of the economy grounded to a halt in 2020 because of the COVID-19 pandemic, governments across the world worked to keep businesses afloat. In the United States, the Employee Retention Credit was part of these efforts. The Employee Retention Credit is a refundable tax credit for qualifying employee wages. Here’s what you need to know. Consider working with a financial advisor on preparing your taxes. Read More...

Dec 20, 2022 As a general rule, you cannot deduct the interest that you pay on a personal or family loan. The IRS considers these standard lending products, with the same rules whether you borrow from a family member or the bank. However, there are some exceptions. For certain types of loans, like student loans or business-related loans, the IRS may allow you to deduct your interest payments. If you use a personal loan for that kind of qualifying expense, you may be able to deduct your interest. You can work with a financial advisor who can advise you about getting a loan, repaying your loans and how you can build wealth long-term. Read More...

Dec 20, 2022 Owning a home can offer some unique financial benefits, including appreciation and a potentially lower monthly cost compared to renting. But you might be wondering: Does buying a house help with taxes? The short answer is yes, there are numerous tax benefits associated with homeownership. The tax breaks you’re able to take advantage of can depend on how you file. A financial advisor can help you create a financial plan for your home buying and tax planning goals. Read More...

Dec 20, 2022 Most businesses can get an extension of six months to file a federal income tax return by filing Form 7004. No explanation for making the request is necessary and the extension is automatic. However, filing Form 7004 only grants more time to file the return. It doesn’t extend the time allowed to pay the tax. Filers sending in Form 7004 have to calculate how much they’ll owe and send payment in with the form or risk being subjected to penalties and interest on the unpaid amount. Also, the form has to be filed in most cases by the original due date for the business return. Consider talking to a financial advisor for help with your business taxes. Read More...

Dec 20, 2022 There are two main ways to give significant amounts of money to a family member: gifts and loans. Each has its own tax consequences and advantages. In the case of a loan, if you want this not to count as a gift you have to actually structure the transaction as a loan. If you don’t have a written contract with fixed repayments and a minimum interest rate, the IRS will likely treat this as a gift. If you do meet those standards, the loan will typically have few tax consequences. You can work with a financial advisor whenever you're considering a big financial move like this, though, to see how it might impact your long-term financial plans. Read More...

Dec 20, 2022 Owners of home-based businesses can take advantage of a slew of tax deductions that will help them reduce their taxable income and save on income taxes. The home office deduction is a tax break, especially for home-based businesses. Other deductions are similar to those that other small businesses get to take. Making full use of tax deductions can help improve the after-tax profitability of home-based businesses and solidify your financial position. To get help with your home-based business taxes and other financial matters, consider talking to a financial advisor. Read More...

Dec 20, 2022 If you’ve spent a sizable amount of money improving your residence, you may understandably be looking for ways to offset those costs and find yourself wondering if your home improvements are tax deductible. Alas, in most cases, the answer is a clear-cut no. But there are a few exceptions where you may get a tax break that you can further investigate. Let’s take a look at what those exceptions are and what it means for you. You may want to also work with a financial advisor who can help you with all of your tax planning and filing needs as well as help you build your wealth.  Read More...

Dec 20, 2022 Claiming tax deductions you’re eligible for is an effective way to reduce your tax burden. But identifying all the deductions available to you can be challenging and you can’t claim deductions if you don’t know they exist. You may be surprised to find out that certain costs related to your insurance and healthcare may actually lower your tax bill. In some instances, you might be able to deduct your insurance premiums, medical expenses and other health-related costs on your taxes. Here’s what to know about potential deductions, when they apply and how much they can reduce your tax bill. You can also work with a financial advisor to help you plan out all of your tax options to find the right strategy for your situation.  Read More...

Dec 20, 2022 While persevering in sickness and health is a familiar concept during a wedding, you’ll rarely hear about tax breaks at the altar. However, married couples can take advantage of a slew of tax benefits, especially when they file jointly. Here is a list of tax benefits of marriage and how to maximize your refund as a couple. You may also want to consider working with a financial advisor to help you with your full tax planning strategies, especially if you're planning a big life event. Read More...

Dec 16, 2022 Marginal taxation systems like the U.S. federal income tax system increase the percentage of income owed to taxes as a taxpayer’s income increases. There are seven income brackets. Your marginal tax rate will also be affected by your filing status, which could be single, married filing jointly or head of household. Only the amount of income within a particular bracket is subject to the corresponding marginal tax rate. To calculate your marginal tax rate, apply the percentage of tax charged to the amount of income in each bracket according to your filing status and add up the totals. A financial advisor can help you determine your tax situation. Read More...

Dec 16, 2022 It can pay to be a responsible rental property owner. For instance, if you’re always investing in your rental property and making improvements, not only will your tenants appreciate it and remain tenants longer, you can get a depreciation deduction on your taxes. Unfortunately, upon selling the property, depreciation sometimes becomes a migraine for landlords in the form of a depreciation recapture tax. You have options, however, to avoid depreciation recapture tax. Here's how. If you need help with taxes, a financial advisor can help you create a tax strategy. Read More...

Dec 15, 2022 The IRS has many different payment options for taxpayers who owe money. The important thing is to reach out and arrange a payment plan. As long as you address it, tax debt is almost always manageable. If you ignore it, though, tax debt can grow out of control. Here’s what you should know. For help managing tax debt and other financial matters, consider matching with a vetted financial advisor for free. Read More...

Dec 14, 2022 The world of investing is vast, exciting and often expensive for individual traders. Occasionally, you’ll encounter an investment opportunity you don’t want to pass up but can’t quite afford. Fortunately, you can borrow the funds necessary from your broker to acquire the asset and pay margin interest for the loan. Furthermore, you can deduct the cost of trading on margin from your taxes, allowing you to reduce your tax burden while trading assets you don’t have the financial capacity to purchase on your own. Here are the details on margin interest and how to deduct the costs from your taxes. Consider working with a vetted financial advisor to discuss whether the investment makes sense for you and, if so, how you can deduct margin interest from your taxes. Read More...

Dec 13, 2022 The gig economy pads the budgets of millions of Americans  -- but there are tax implications from taking a side job. Fortunately, you can reduce the taxes on your side jobs, depending on your situation. For help figuring out how a side job will impact your taxes, consider working with a financial advisor. Read More...

Dec 08, 2022 When you earn interest income on your investments or other financial endeavors, then you'll likely need to pay taxes on all or part of that income. Earned interest is considered the same as any other ordinary income and must be included as part of your federal and state tax returns. The tax rate is the same rate you would pay on any other income that you declare on your tax return. Basically any interest-bearing account will require you to pay tax on the earned income. Any exceptions, which can include municipal bonds, tax earned income as a capital gains tax. If you're looking for guidance on taxes, you may want to consider  working with a financial advisor. Read More...

Dec 07, 2022 Selling investments for more than what you paid for them could lead to a tidy profit. It could also trigger capital gains tax, potentially resulting in a larger tax bill. The good news is that you may be able to minimize what you owe through tax-loss harvesting. Knowing how to net short- and long-term capital gains and losses is an important step. You can also work with a financial advisor who can advise you on a good tax planning strategy for your investments. Read More...

Dec 07, 2022 The link between IRA contributions and your adjusted gross income (AGI) can get complicated because not all contributions to IRAs lower your AGI. Generally, this is one of those situations where you’ll be pleased to file a tax return with a smaller AGI because those IRA contributions will go to your retirement while also reducing your tax bill. If you're looking for smarter tax strategies to help you with your investments and long-term retirement planning, consider working with a financial advisorRead More...

Dec 06, 2022 Sitting down to file taxes can sometimes bring an unpleasant surprise of taxes owed or a pleasant relief of a hefty refund. After filing taxes for years, you might wonder how the government calculates your taxes. Understanding effective and marginal tax rates can clarify how you end up paying a specific amount in taxes and how to lower your overall taxable income. An effective tax rate is an average rate you pay in taxes, while the marginal tax rate is the rate paid on the last dollar of income. For proper tax planning, you may want to consider working with a financial advisor. Read More...

Dec 01, 2022 A long-term capital loss refers to money that you lose on investments held for more than 12 months. The alternative is a short-term capital loss, money lost on investments that you held for less than a year. When you do your taxes, each category of capital loss offsets its equivalent capital gains first. This can have very real consequences when it comes to determining your overall tax liability so it’s important to get right. You may want to consider working with a financial advisor who specializes in tax planning in order to help you make the best overall tax strategy.  Read More...

Nov 30, 2022 Even the savviest investors pick assets that turn out to be duds. But fortunately, your capital losses can become tax deductions. While you don’t have to sell an asset whose value has nosedived, ridding your portfolio of dead weight can help you at tax time. In addition, federal tax law requires you to report capital losses when filing. Here’s how to comply with IRS regulations for capital losses and ensure you reap a tax benefit. A financial advisor can help optimize your financial plan to lower your tax liability.   Read More...

Nov 29, 2022 Normally when you hear the word tax haven, the typical places spring to mind. The Cayman Islands, Switzerland, Panama and the Bahamas are all tax havens, but over the course of the past decade South Dakota has joined their ranks as one of the world's top destinations for stashing assets and avoiding taxes. There are currently hundreds of billions of dollars worth of assets squirreled away in South Dakotan trusts that generate no tax revenue for the state or federal government, and these assets are functionally untouchable by anyone who may have a legitimate claim to them, such as creditors or ex-spouses. The state has been thrust into the spotlight recently with the leaks of the Pandora Papers that revealed a great deal about who actually uses these South Dakotan trusts. While tax havens like Switzerland may seem like a tool for the ultra wealthy, there are ways you can potentially take advantage of the Mount Rushmore State's auspices yourself -- even without being based there. If you're looking for help with tax planning, whether by taking advantage of South Dakotan trusts or otherwise, it may also be a good idea to speak with a financial advisor. Read More...

Nov 29, 2022 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...

Nov 28, 2022 Capital losses realized when selling securities for less than you paid can be used to reduce income received from dividend-paying stocks -- but only up to a point. The IRS will let you use up to $3,000 in net capital losses to offset income from dividends. Within this limit, you also can use capital losses to shelter other income, such as wages and salaries. Have a conversation with a financial advisor before making investing decisions. Read More...

Nov 28, 2022 A tax write-off is how businesses account for expenses, losses and liabilities on their taxes. Write-offs are a specialized form of tax deduction. When a business spends money on equipment or operating expenses, it can deduct that spending from its taxes. The same is true when a business loses money on uncollected debts and lost assets. With write-offs, businesses can lower their tax burden and help make their operations more affordable. Here’s how it works. For more help with how you could use write-offs, consider working with a financial advisor. Read More...

Nov 23, 2022 Usually, if you have a debt canceled, you will owe taxes on the amount of the canceled debt. The Internal Revenue Service does not consider debt as income unless the debt is canceled. Then the canceled debt is regarded as income and subject to taxation at regular rates. There are some exceptions, however, when you may not owe taxes on canceled debt. These include debt cancellation as a result of bankruptcy, insolvency and possible student loan forgiveness. A financial advisor can help you evaluate whether you owe taxes on canceled debts and help you make a plan if you do. Read More...

Nov 23, 2022 Capital gains and capital losses both have tax implications. When you sell stocks for a profit, you owe taxes on those gains. These taxes are calculated based on capital gains rates. However, when it comes to investments, the IRS taxes you based on your net gains for the entire year. This means that you calculate your taxes based on the total amount of profits you made after accounting for any investment losses you took during the year. You can simplify this process if you work with a financial advisor who specializes in tax planning.  Read More...

Nov 22, 2022 The American Rescue Plan boosted 2021 tax returns for millions of working families. However, the 2022 tax year will be a return to the norm, and dependent tax deduction rules are no exception. A dependent tax deduction can lower your overall tax liability. Here are the IRS rules for the dependent tax deduction. For help figuring out your own dependent tax deductions, consider working with a financial advisor. Read More...

Nov 22, 2022 If you're self-employed or own a small business, chances are high that your business is an LLC or could benefit from becoming one. It's not always straightforward how an LLC works and what it means for you, however. Here we'll cover the different ways you can be taxed with an LLC and what the LLC tax rate can mean for you. By knowing how taxes are handled with LLCs, you can better understand their tax benefits. You can also work directly with a financial advisor to help you choose the best tax route for your business that will have a positive impact on your personal taxes.  Read More...

Nov 22, 2022 Investors holding qualified small business stock (QSBS) may be confused about what the tax rules are but they should know that they can qualify for tax benefits. This can encourage small business investment while providing a benefit for investors. There are some small business and shareholder rules that you must follow in order to qualify. Read on to learn more or you could speak with a financial advisor who can help you through situations like these and properly plan out your taxes.  Read More...

Nov 22, 2022 As a contributor to a Roth IRA, you’re likely looking forward to a retirement chock full of tax-free income from your account. However, paying income taxes now and eliminating them later doesn’t mean you won’t submit and receive tax forms throughout the years. Like any other tax-advantaged account, Roth IRA account holders receive tax forms that include information you must file with the IRS. You can also work with a financial advisor who can take care of tax planning for all of your retirement accounts. Read More...

Nov 22, 2022 The tax code has changed a lot recently, and there may be some confusion among filers about whether or not education expenses are tax-deductible. Though the standard tuition and fees deduction expired at the end of 2020, you may be eligible for the American opportunity credit, the lifetime learning credit or a student loan interest deduction. Here we'll break down what each of these tax credits and deductions means for your taxes. For help with taxes and other financial questions, consider working with a financial advisor. Read More...

Nov 18, 2022 Having a large debt balance is never good but it can be incredibly nerve-wracking when your creditor is the Internal Revenue Service (IRS). Luckily, you may be able to reach a tax debt settlement with the IRS, depending on your personal situation. If you’re able to get your agreement, called an “ offer in compromise,” approved, you may be able to settle your tax debt for less than the full amount you owe. Consider working with a financial advisor as you file your taxes and, if needed, respond to an IRS audit as they can help you navigate the whole process. Read More...

Nov 17, 2022 When it comes to saving for your retirement, you may have different options depending on where you're employed. One of those options could be a tax-sheltered annuity (TSA). Here we'll answer what tax-sheltered annuities are, how they work and how they differ from other common retirement savings plans, like a 401(k). Here's what you need to know about tax-sheltered annuities and whether they'll work for you. For more help, consider working with a financial advisor. Read More...

Nov 16, 2022 House Democrats have proposed legislation that could end Trump tax cuts for the wealthy and corporations. If passed, this could implement some of the biggest tax increases in decades. But while these tax changes aim to make good on President Joe Biden's promises to tackle inequality, they are smaller-scale in an effort to win over moderate Democrat support. The new plan proposes raising the top capital gains tax rate from 20% to 25% instead of nearly doubling it to 39.6% as Biden had initially proposed. And the corporate tax rate would only go up to 26.5% instead of 28%. Let's break down how these tax changes could affect you. A financial advisor may be able to help with tax planning. SmartAsset's free advisor matching tool can match you with financial advisors in your area. Read More...

Nov 15, 2022 Typically, you can expect to pay taxes when you earn your money when you spend your money and even when your money grows. However, you and your loved ones may also be expected to pay taxes on your money when you give it away or pass it down upon your death. Gift taxes and estate taxes are only applied if your bequeathed assets exceed a certain dollar amount. Here’s a look at what the unified tax credit is, how it relates to gift or estate taxes and who this credit impacts. Consider working with a financial advisor as you coordinate your estate planning and tax strategy. Read More...

Nov 08, 2022 It’s natural to want the best care for your children and dependents. Fortunately, you can save money on daycare expenses without sacrificing quality. If your employer offers a dependent care FSA plan, your contributions can lower your taxable income. In addition, the dependent care tax credit can cut down your taxes due when you file. Here are the details on each and tips on using both simultaneously. A financial advisor can help you create a financial plan for your family's needs and goals. Read More...

Nov 04, 2022 Since the Federal Reserve has raised its federal funds effective rate to the highest since December 2007, interest rates on various types of loans have also increased. That's bad news for anyone trying to take out new loans like mortgages or lines of credit, but good news for people looking to make more money on their non-invested savings by lending money. Certificates of deposit (CDs) pay you an agreed-upon rate in exchange for lending your money to a bank for a set period of time. But the higher interest rates being paid by CDs is only part of equation. The other part is the taxes owed on those interest rates. Let's break down how CDs are taxed. A financial advisor can help you optimize your financial plan to lower your tax liability. Read More...

Nov 01, 2022 Inheriting savings bonds can provide you with an unexpected windfall. However, there’s one important question to ask: Do I have to pay tax on inherited savings bonds? The short answer is yes, you generally will be responsible for taxes owed on savings bonds you inherit from someone else. The good news is that you may be able to defer taxes on inherited savings bonds or avoid it altogether in certain situations. A financial advisor can help you optimize your financial plan to lower your tax liability. Read More...

Oct 25, 2022 Many people believe they only have to pay taxes to a foreign government if they are legal citizens or permanent residents, but this isn't always the case. According to the IRS substantial presence test, workers without U.S. citizenship or permanent residency might have to pay taxes depending on how many days they have spent in the country over the past three years. You can work with a financial advisor who specializes in taxes to help you properly plan your finances and attempt to lower any potential tax liability. Read More...

Oct 20, 2022 Long-term care insurance can be an important part of planning for the twilight of your life. Despite everyone hoping they’ll be healthy and active until the end of their days, most of us end up needing a bit of help getting through the day when we get older. Like most medical care in the United States, this can end up being very expensive. Many people invest in long-term care insurance early so that they will have an easier time paying for the help they need when they need it. This brings up many questions, but one that you may not consider right away is if there are any tax implications to buying long-term care insurance. In short: yes - under certain conditions. Long-term care insurance premiums can have a positive impact on your taxes. We’ll explain exactly how it works below. For more help with long-term care insurance, taxes or any other financial considerations, consider working with a financial advisor. Read More...

Oct 20, 2022 When deciding where to spend your golden years, it's crucial for many of us to consider how the taxes of any prospective location will affect the income we'll be living on. For retired service members, the state you live in can actually make a significant difference with regard to how much you pay in taxes on your retirement pay. On top of the conventional ways state income tax schedules differ, many states have special policies in place specifically for military retirement pay. For those of you who are interested in expert guidance through every retirement prep decision, a financial advisor could be a great help. Read More...

Oct 19, 2022 On Tuesday the IRS announced its annual adjustments to the standard deduction and tax brackets for the 2023 tax year. They are a considerable increase over 2022. This is a response to ongoing inflation, which has the effect of eroding spending power even as it increases some workers’ take home pay. As with all things taxes, this can raise some questions. Below, we'll provide answers. For more info on how these changes will affect your personal tax bill, consider matching with a financial advisorRead More...

Oct 19, 2022 In the past year Americans have seen multiple interest rate hikes, a Social Security cost of living adjustment and the introduction of a $740 Billion inflation reduction act. Amid all the government effort being put forth to compensate for the economic downturn, there is still more relief coming through the pipeline. The IRS confirmed this week that inflation adjustments would be made for the 2023 tax year. This adjustment will affect 62 code sections laid out in revenue procedure 22-38. One major change to be aware of a 7% standard deduction increase. Here’s the breakdown and how this boost will affect your tax bill. For assistance with your finances for the upcoming tax season contact a local financial advisor to see where you can make the most significant reduction in your tax bill. Read More...

Oct 18, 2022 Marriage is what brings us together, but along with the matrimonial duties come legal and financial responsibilities. That includes taxes, and more specifically, a potential for a marriage tax penalty. This means that as a married couple you end up paying more taxes than you would if you filed separately. Below, we go over what the marriage tax penalty is, what it could mean for you and how you can avoid it. You can also work with a financial advisor who may be able to prepare your finances for any potential unexpected costs or possibly lower your potential tax bill.  Read More...

Oct 14, 2022 As people age, it can be more challenging to live by yourself and handle your basic needs. Assisted living facilities and care workers provide additional help for seniors to live independently in a safe environment. Paying for assisted living can be expensive, so many investors wonder if assisted living is tax deductible. Depending on your income and how much you pay for assisted living, it could qualify as a medical deduction. Here's what you need to know about this potential tax deduction and who can qualify. A financial advisor can help you put a financial plan together to cover assisted living and other health costs.  Read More...

Oct 14, 2022 When you own or invest in a business, you may receive distributions from its profits. Depending on how the business is structured, the company may not have paid taxes on these profits before distributing them to you. These businesses are known as pass-through entities. Here's how pass-through income is taxed and what you need to know about it. A financial advisor can walk you through different tax strategies to lower your liability. Read More...

Oct 11, 2022 Earning a commission income is like the icing on the cake for a job well done. Whether you’re a sales manager that’s just closed a major deal or a real estate agent who’s recently sold a high-end home, your commission check serves as a lucrative supplement to your regular wages. But your commission earnings are taxable like regular earnings. Here’s how commissions are classified by the IRS and how they’re taxed. A financial advisor can walk you through different tax planning strategies to minimize your tax liability. Read More...

Oct 11, 2022 Claiming tax deductions can help to reduce your taxable income for the year. As a parent, there are a number of child-related expenses you might be able to write off to lower your tax liability. But is private school tuition tax-deductible? The answer is no for federal tax purposes but it’s possible that you may be able to claim other tax breaks for funding your child’s education. You can also hire a financial advisor who can provide help with all of your financial planning needs, from tax planning to investment management. Read More...

Oct 11, 2022 Day trading can be a fulfilling and lucrative career. If you know what you're doing, you can make a serious chunk of change. But with every financial success comes everyone's favorite consequence: taxes. So how do day traders avoid taxes, or at least reduce them? There are a few different methods that you can use if you're day trading to reduce your total tax bill. If you don't want to leave things to chance, or just don't want to worry about your tax obligations, consider hiring a financial advisor who can manage it for you.  Read More...

Oct 11, 2022 Collecting is a pastime to which a great many people are drawn. The satisfaction of having a complete set of old stamps or unearthing a rare bottle of wine is quite easy to understand. However, a less easy-to-understand aspect of collecting is how the purchase and sale of collectibles can affect your taxes. If you need help with tax planning, a financial advisor can guide you in optimizing your financial plan to lower your tax liability.  Read More...

Oct 07, 2022 Health insurance premiums can be tax-deductible under some circumstances. Taxpayers who itemize may be able to use this deduction to the extent that their total medical and dental expenses, including health insurance premiums, exceed 7.5% of adjusted gross income. Self-employed people may also be able to deduct premiums for dental, health and long-term care insurance for themselves, spouses and dependents. Premiums may also qualify for special tax treatment for those who get coverage from the Health Insurance Marketplace or COBRA continuation insurance. Consider asking a financial advisor for details on whether your health insurance premiums can be deducted at tax time. Read More...

Oct 06, 2022 When you move from one home to another, these expenses can add up quickly. For many households, moving costs can be thousands of dollars, even if you do most of the work yourself, and hiring a moving company can increase those costs dramatically. With such a big expense, many people wonder if moving expenses are tax-deductible. While moving expenses stopped being tax-deductible for most households in 2018, some states still allow this deduction. You can work with a financial advisor to properly plan for potential tax deductions to possibly limit your tax liability.  Read More...

Oct 06, 2022 Alimony has two important tax statuses. If you finalized your divorce before Jan. 1, 2019, the person who collects alimony pays taxes on this money. This means that the person who pays alimony can claim a full tax deduction for the payments, while the person who receives the alimony pays taxes on it as income. Congress changed this law in the 2017 tax cut act. For all divorces finalized on or after Jan. 1, 2019, the person who pays alimony pays taxes on this money. This means that the person who pays alimony cannot claim a tax deduction for the payments, while the person who receives the alimony does not pay any taxes on this income. You can work with a financial advisor to give you the peace of mind of managing your investments and overall finances. Read More...

Oct 06, 2022 America uses what is known as a self-reporting tax system. This means that at the end of each year, you calculate your income, assets and liabilities, then tell the government what you owe. The IRS then double-checks your work against its own records. The agency has several options if it disagrees with your filing. Most of the time, the IRS simply sends you a miscalculation notice. This is a letter saying that the IRS believes you did not pay the correct amount, but that it also believes the error was due to a mistake or otherwise made in good faith. If the IRS believes that your taxes deserve a closer look, it can conduct what is known as an audit. Here’s what it means when the IRS conducts a tax audit. You can work with a financial advisor to put you in the best position of preventing a future audit. Read More...

Oct 06, 2022 In the long run, if you sell an investment asset for a profit you will owe capital gains taxes. But for active investors, it’s important to understand that the IRS gives you a few ways to defer those taxes. This kind of tax planning can be particularly useful with more complicated products like a mutual fund. If you’re looking to avoid getting hit with a tax bill the next time you move money around, here are some ways to manage your assets. For proper tax planning to get ahead of any potential liability, you can also work with a financial advisor who specializes in taxRead More...

Oct 06, 2022 As a U.S. citizen or legal permanent resident, the IRS is in charge of collecting a cut of your income. Even if you work or live outside the U.S., Uncle Sam will want its rightful share of your earnings because you're a citizen. Taxpayers typically use a W-2 to declare earnings. While some foreign companies provide a W-2, others may not. If you work for a company that doesn’t provide this formal documentation, you might wonder how to report foreign income without a W-2. A financial advisor can help you determine what your tax obligations are, and they can be especially helpful if you have a complicated situation. Read More...

Oct 04, 2022 Sales tax on large purchases, like a car, is crucial to factor into the price. Depending on where you live and the price of your car, sales tax can cost you thousands of dollars. But did you know there are legal ways to get out of paying sales tax on a used car? Let's go over how sales tax affects your purchase and how to avoid paying sales tax on a used car. If you're looking to buy a car, a financial advisor can help you create a financial plan to reach your savings goals.  Read More...

Sep 28, 2022 Tax credits can save you money at tax time by reducing what you owe. If you purchase health insurance through the Health Insurance Marketplace, you may qualify for the Premium Tax Credit. Eligibility for the credit is based on income and household size. If you’re able to claim the premium tax credit, you can apply the credit to lower your monthly health insurance premiums. You can also work with a financial advisor that specializes in taxes to get a full understanding of what tax decisions might be best for you. Read More...

Jan 04, 2023 A trust is a legal entity that holds money and assets for future distribution or management. For example, you might create a trust for your children’s college education, putting money into it which they can withdraw when they go to school. Or you might put the family home into a trust, creating a legal entity that will own the property potentially indefinitely to ensure that it will always stay in the family. The intersection of trusts and taxes can be complicated, but working with a financial advisor can help you clarify relevant issues so you can make good decisions. Read More...

Dec 30, 2022 Investors must pay capital gains taxes on the income they make as a profit from selling investments or assets. The federal government taxes long-term capital gains at the rates of 0%, 15% and 20%, depending on filing status and income. And short-term capital gains are taxed as ordinary income. Some states will also tax capital gains. A financial advisor could help you figure out your tax liability and create a tax plan to maximize your investments. Read More...

Sep 14, 2022 Tax planning is central to financial planning for professional athletes who play in multiple states. In addition to the usual round of state and federal taxes, pro athletes may also be subject to the jock tax. The jock tax is a special tax that applies to income earned outside of their home state or municipality. However, you don’t need to be an NBA player or NFL star to be subject to the tax because it's based on where you earn income. It's best to be safe and make sure you know your full tax liability at all times. Working with a financial advisor can help you understand and prepare for your tax liability from earning income in multiple places. Read More...

Sep 08, 2022 There’s a lot to consider when selling a business and tax planning is at the top of the list. When you sell a business or business assets at a profit, the IRS expects to receive a cut in the form of capital gains tax. That could potentially result in a larger-than-expected tax bill. If you’re in the initial stages of planning your exit, it’s important to know how to avoid capital gains tax on a business sale. For more help managing capital gains taxes or any other financial issues, consider working with a financial advisor. Read More...

Sep 07, 2022 Capital gains taxes are a tax on the profits you make on investments, which you might owe if you are investing through a taxable brokerage account. The good news is that there are strategies investors can use to eliminate or minimize those taxes. The right ways for you will depend on your long-term financial goals. If you're not sure what path to take to avoid taxes you can work with a professional financial advisor who can help you create a financial plan and provide the right ways to avoid these taxes.  Read More...

Sep 06, 2022 Winning or settling your lawsuit can be exhilarating. After you've received the settlement money and paid attorney fees, most people assume that the rest is theirs to keep. However, some settlements are subject to taxes. And, unfortunately, many people don't realize it until tax time the following year, after much of the money has been spent. To avoid a nasty, unexpected tax bill, this article will show you how to reduce or eliminate the likelihood that you'll have to pay taxes on a lawsuit settlement. If you suddenly come into a large amount of money, work with a financial advisor to make the most wise of your windfall. Read More...

Sep 06, 2022 There's a lot of pride associated with owning property, whether it’s a primary home or a vacation bungalow. It's especially rewarding when real estate is properly compensated for. But while a high selling price may be exciting in the moment, it typically comes with a potential drawback. As a capital asset, any gains you make on the sale of your real estate are taxable. It's important to understand how capital gains apply to a home and how you can lower their sting. A financial advisor may be able to help you if you're selling property, so consider using SmartAsset's free advisor matching tool today. Read More...

Sep 01, 2022 A Taxpayer Identification Number (TIN) is a unique nine-digit number the Internal Revenue Service uses to identify individual taxpayers. A TIN can come in different varieties, including Social Security Number (SSN), Employer Identification Number (EIN), Individual Taxpayer Identification Number (ITIN) and Preparer Taxpayer Identification Number (PTIN). TINs are required any time taxpayers file tax returns and may also serve other purposes, including identifying people applying for jobs, loans and credit. Filing, paying and managing taxes is a key part of a solid financial plan. For help with your taxes or any other financial considerations, consider working with a financial advisor. Read More...

Aug 30, 2022 Taxes can be complicated and frustrating to many people. Not only is there a risk of not filing them correctly, but many miss out on strategies that can save them money. Fortunately, Certified Public Accountants (CPAs) help millions of Americans accurately file their tax returns every year. CPAs are licensed professionals in taxes, accounting and business. Working with one can simplify the tax filing process and eliminate stress from all things tax related. Many financial advisors are CPAs and they can also help you create a full financial plan that goes far beyond tax services.  Read More...

Aug 18, 2022 A financial windfall is something to celebrate. But if you don't play your cards right, the government will expect a major portion of the cash. The good news is that smart tax planning strategies can help you minimize your tax burden. Let's explore how to avoid taxes on a large sum of money. The ideas below are a great way to get your wheels turning. But consider speaking to a financial advisor for customized advice about your unique situation. Read More...

Aug 25, 2022 You are required to report and pay federal taxes on any interest income you receive from a savings account. The income is taxed as unearned, which means you’ll escape payroll taxes, but you will owe federal income tax on it at your regular rate. Banks and other financial institutions report your interest income on a form 1099-INT if it’s over $10.  Consider talking to a financial advisor to understand how savings account interest income may be taxed. Read More...

Aug 10, 2022 With interest rates rising, it's increasingly important to make sure you're taking advantage of all interest deductions you're entitled to so you can avoid paying more in taxes than you need to. Three interest deductions are particularly important, according to J.P. Morgan, which explains how to use those deductions. The bank also describes how to preserve interest deductibility when switching from a floating-rate loan to a fixed-rate loan. Consider working with a financial advisor as you coordinate your borrowing and your tax planning. Read More...

Aug 09, 2022 To get the Inflation Reduction Act passed in the Senate, Democrats dropped their attempt to kill a controversial tax provision that's known as the carried interest loophole. Also called the carried interest income classification, it has long been a target of progressive tax advocates as well as a cherished perk for many in the financial community. Opponents of this quirk in the tax code argue that it’s an unfair subsidy for wealthy investors. Proponents argue that it is effectively a funding mechanism that helps large investors allocate capital more efficiently. Here's what they are talking about. A financial advisor can help you take advantage of every tax break you are entitled to. Read More...

Aug 05, 2022 If you use PayPal, Venmo and other third-party payment networks, then you might get a 1099-K form from the IRS. This form reports transactions from third-party payment networks. And depending on how big your payment is and what it's for, you may have to file it with your taxes. A financial advisor can help lower your tax liability with a tax planning strategy. Read More...

Aug 04, 2022 If you’re like most taxpayers, you may not need either a tax preparer or a certified public accountant (CPA). There are exceptions, though. Maybe you’re self-employed, own a small business or have lived in several jurisdictions. In these cases you might need some help. If so, here’s your rule of thumb: Hire a tax preparer if you generally understand your finances and just want to make sure your taxes get done right. Hire a CPA if your financial questions extend beyond simply preparing and filing tax forms. For help with both taxes and other financial considerations, consider working with a financial advisor. Read More...

Jul 27, 2022 Donating real estate to charity can come with a myriad of benefits. Not only will you help out a worthy cause, but also take advantage of tax benefits that can lower your overall personal tax burden. The largest benefit is, arguably, the opportunity to avoid the capital gains tax by holding the property for longer than a year and donating it to a qualified charity. If you need help navigating charitable giving, consider working with a financial advisor who can help you craft an efficient plan to donate real estate to charity. Read More...

Jul 27, 2022 Earning a higher income can mean paying more in taxes at both the federal and state levels. You might assume that you’re stuck with a bigger tax bill because you earn more but that’s not always the case. There are a number of tax-saving strategies for high-income earners that can help to reduce what you owe. The key is knowing which ones to implement, based on your specific financial situation. A financial advisor can help you find the right tax strategies for you. Read More...

Jul 27, 2022 Working as an independent contractor or small business owner can bring tremendous freedom—but it can also bring headaches at tax time if you’re not careful. In addition to filing income taxes each April, you’re also required to set aside money for estimated quarterly taxes. That’s standard if you receive Form 1099s from clients versus a W-2 and expect to owe $1,000 or more in taxes for the year. You can work with a financial advisor who is also a CPA to help you figure out the right amount of taxes to set aside each year. Read More...

Jul 15, 2022 The IRS says that the average tax refund for returns filed in 2022 is $3,039. This is an increase of 7.5% when compared with 2021, which averaged $2,827. But for taxpayers expecting to get the same sizable refund next year, Jackson Hewitt urges them to do a midyear tax checkup to prepare for upcoming changes. Let's take a look at what a midyear tax checkup can do for you and four reasons why your tax refund in 2023 could be smaller. If you want to optimize your tax strategy, a financial advisor could help you lower your tax liability. Read More...

Jul 12, 2022 If incentive stock options (ISOs) are part of your compensation package, knowing what they are, what they can do for you and how their tax treatment is going to affect you in the future is important. At the very least, you have to determine how they will affect your federal income taxes when you exercise them. Otherwise, you could be in for a really serious surprise come tax time due to a possible trigger of the alternative minimum tax (AMT) when you exercise the ISOs. Consider working with a financial advisor to ensure you don't overpay on your investment taxes. Read More...

Jul 07, 2022 Backup withholding is money deducted for federal income taxes on some payments by banks and other payers. Backup withholding amounting to 24% of a payment may be required if a taxpayer who receives interest or dividend income provided an incorrect Social Security number to the bank or corporation that is paying the income. Money deducted from a payment as backup withholding can be credited to future income taxes. A financial advisor could help you optimize your investments to lower your taxes. Read More...

Sep 19, 2022 The gift tax is a tax levied on any unilateral transfer (a gift) from one person to another. The federal tax is aimed partially at making sure wealthy families don't use gifts to bypass the estate tax. The federal gift tax applies to any kind of taxable assets, including cash, securities and real estate. When the gift tax applies, it is the donor who pays, meaning that if you give a taxable gift you owe any applicable taxes. If you receive a gift, it is rare, if ever, that you owe taxes. It is exceedingly rare for someone to owe money due to the gift tax. This tends to apply only to the wealthiest of households due to the tax’s high exclusions. This is because the purpose of the gift tax is to prevent wealthy families from avoiding the estate tax by simply gifting all their money to each new set of heirs. Here’s what you need to know. Read More...

Dec 30, 2022 Investing is all about making your money work for you -- getting money without having to actually perform labor.  But what some investors may initially neglect to take into account is the fact that investment gains mean investment income, and investment income means taxes on investment income. A financial advisor can help you create a tax plan to maximize your investments. Here's a breakdown the tax rates for your capital gains in 2022. Read More...

Jul 06, 2022 Investors use irrevocable trusts to protect their assets from creditors, lawsuits and estate taxes. However, when you sell a home in an irrevocable trust, that can complicate your tax situation. This is a guide to how it works and whether you’ll have to pay capital gains tax on the sale of a home in an irrevocable trust. You can work with a financial advisor who can help you plan ahead and avoid unnecessary taxes.  Read More...

Jul 06, 2022 Filing taxes is one American pastime that many Americans dread. With so many complicated forms, rules and tax rates, most taxpayers need assistance to complete their returns. While some use software like TurboTax to file returns on their own, others turn to tax professionals to handle the process. We’re comparing the pros and cons of using TurboTax versus hiring a CPA, to help you decide which one is right for your taxes. If you need help tax planning or making the right financial decisions then you may want to speak with a financial advisorRead More...

Jun 23, 2022 A flexible spending account (FSA) allows you to save up money for medical expenses. You can use this tax-advantaged fund to pay for costs like copays, deductibles and pharmaceuticals. For the most part, you have to spend the money in your FSA by the end of each year. However, the IRS allows you to keep a certain amount from year to year. This is called your “carryover.” In 2022, this carryover is $570. For help with FSAs or any other financial planning concerns, consider working with a financial advisor. Read More...

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