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Showing posts from March, 2021

Do You Want to Know Where Your Tax Refund Is? How To Check Your Refund Status

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It’s that time of year. The sun is shining, the days have gotten longer, flowers are blooming. It can only mean one thing: tax season is here.  For Americans, that means you’re likely gathering up your documents including W2’s and 1099s, and preparing to file. Or, if you’re an early bird, you’re patiently awaiting the long-awaited tax refund. But how can you find out if your tax refund is on its way? What’s the status and will it arrive via mail or direct deposit? The good news is, in recent years, thanks to digitalization, the IRS has made tracking tax returns a much easier process. And in this guide, we’ll look at how to find out where your tax return is and when you can expect it. E-File Update It pays to e-file.  E-filing, or submitting your taxes virtually, is already well underway. The IRS began accepting tax returns on Friday, February 12, 2021. So if you’re ready to send your tax return in, go right ahead. The sooner you file, the sooner you may see a refund. That said, the IR

First-Time Investor? Here’s What You Need to Know About Taxes

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With the advent of apps and web services geared toward casual, amateur investors—Robinhood, Acorns, and Zacks Trade, for example—the number of people trying their hand at trading stocks is increasing daily.  This can be a great way to make some money and enjoy yourself while doing it. But if you’re not prepared come tax time, you could find that you owe more money than you bargained for thanks to your trading habit.  If you’re just getting into investing, here’s what you need to know about taxes.  Keep records of your transactions While the app or brokerage you use will maintain reliable records, it’s a good idea to keep your own in case something happens. After all, companies do get cyber hacked, have outages, and sometimes lose data. If that were to happen around tax time, you could end up without the information you need to file properly.  The things you should track include:  What stocks you’ve purchased Number of shares What you’ve sold Dates of all transactions Cost basis  The sa

6 Tax-smart College Savings Strategies That Can Be Helpful For The Parents

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The average all-in cost — tuition and fees — to attend a private, four-year college in the 2018-19 academic year was $35,830, according to Business Insider . That’s enough money to make any parent anxious. Families with more than one child have to worry about the compounding cost of their children’s education. The point? All the more reason to start saving early and use any tax-smart options at your disposal as soon as possible.  Luckily, there are several options. By using the right federal income tax breaks, parents can help put their children on the right foot forward for their future. In this guide, we’ll look at 6 college savings strategies and the pros and cons of each so that parents can make the best plan possible.   Coverdell Education Savings Account Also known as the Education IRA, the Coverdell Education Savings Account (CESA) is similar to a 529 Plan, a college savings plan that offers tax and financial aid benefits that we’ll review next. And that’s a great thing because

3 Things You Need To Know About Divorce-related Tax Issues For Small-business Owners

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As if getting a divorce isn’t hard enough, there are financial ramifications to consider. Who gets the house? How do you separate your finances? These issues are compounded when a couple owns a business together. A divorce can bring about all kinds of tax consequences and anyone considering ending their marriage needs to think about all of them.  The good news is, some options help make a post-divorce tax situation better. It means doing your homework and looking closely at all of your assets, but with some hard work and thoughtful preparation, you can end a marriage without losing a small business.  Here we’ll look at three things to keep top of mind about divorce-related tax issues for small-business owners. Tax-Free Transfer Rule The good news, generally speaking, if you and your spouse are both U.S. citizens, you can divide up assets without incurring a federal income tax consequence. This is thanks to the tax-free transfer rule.   When an asset falls under this rule, whichever spo

6 Proven Tax Reduction Strategies for the Self-Employed

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There are many benefits to being self-employed: you’re your own boss, you get to choose your own hours, and come and go as you please. You get to choose what work you take on and kindly demure projects you’d rather not be a part of. But what you don’t get to do is have your taxes magically handled for you. Unlike people who work for a larger business or corporate, you don’t simply receive a W-2 in the mail. A sole proprietorship means you’re likely doing your taxes alone or hiring someone to do them for you.  So how can you give yourself a tax reduction without too many headaches? Quite a few ways, as it turns out. In this guide, we’ll look at 6 proven tax reduction strategies for the self-employed that you can begin to implement today. Establish a Home Office Work from home a portion or all of your time? Then you need to be claiming a home office. By doing so, you can take the home office deduction which allows you to convert items such as utilities and insurance, into deductible busi

Tax Guide 101 For Vacation Rentals

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Managing or owning a vacation rental can be a great side business and lucrative enterprise. But, like anything, there are tax guidelines that need to be kept in mind when navigating the vacation rental world. In this guide, we’ll do a crash course Tax Guide 101 For Vacation Rental so you can be prepared for how the IRS will treat your property and how you can get the most out of this business opportunity.  Vacation Rentals as Hotels To begin with, it’s important to realize that if you own a cottage, cabin, condo, or beach home, the IRS may designate it a hotel. And a vacation-home hotel comes with its own tax requirements. How do you know if your property is a vacation-home hotel? Look at how many days the average rental is. If the average rental time period is seven days or less, then it’s a vacation hotel. The Pros This tax designation triggers the following:  Tax law treats the property as a business, not a rental property.  You must file a Schedule C where you will report all incom

Top 5 Tax Savings Tips When Renting To Your Relatives

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Renting property to a loved one may seem like a no-brainer. They’re your family, of course, you want to help them find a good place to call home. Plus, you know and trust them, so surely they’ll be excellent tenants and can keep you well informed about necessary improvements or issues. What could go wrong? Plenty. The truth is, if you’re not careful, renting to relatives can trigger all kinds of tax consequences you may not even be aware of. Fortunately, we can enlighten you on some red flags to look out for.  To maintain rental expense deductions you need to ensure you’re renting property. That begins with fully grasping exactly how the IRS classifies rental property. According to the IRS , “a dwelling is considered a residence if it’s used for personal purposes during the tax year for more than the greater of 14 days or 10 percent of the total days rented to others at a fair rental value.” But what does personal use mean? The IRS defines personal use as: Any person who owns an intere