Our Financial Blog
Is There a Tax Break for Tuition Paid to Special Schools?
A component of itemized deductions is the cost of medical care. The total of eligible medical expenses paid during the tax year is reduced by 7.5% of the taxpayer’s adjusted gross income (AGI). While you are undoubtedly familiar with most of the medical expenses...
Costs for Installing Medically-Related Home Improvements Have Tax Benefits
According to the Social Security Administration, 10,000 baby boomers a day are reaching the age of 65, as of 2018 16% of Americans were age 65 or older, and by 2030 all boomers will be at least 65. Boomers aren’t the only reason the nation’s overall population is...
Hobby or For-Profit Activity? The Answer Makes a Big Difference for Tax Purposes
If you are engaged in an activity that produces income, the big tax question is whether the activity is a hobby or a business. The tax treatment of your income or loss from this endeavor hinges on the answer. The tax code (Section 183 – the so-called “hobby loss...
Twists and Turns of the Education Tax Credits
If you have a child or children in college, or perhaps you or your spouse is a student, it can be confusing to figure out which of the two potential education tax credits you are eligible for and give you the greater tax benefit. There are two higher-education tax...
What’s Next for the Child Tax Credit?
December 15th, 2021 marked the last deposit date for the child tax credit payment expanded under the American Rescue Plan (ARP). Though many had hoped the program would be continued, political leaders are struggling to find a way forward that makes the majority of...
Crucial Steps You Can Use To Take Control of Your Finances in 2022 and Beyond
As the old saying goes, "If you fail to plan, you plan to fail." Whoever coined that phrase was absolutely talking about finances, whether they realized it or not. According to one recent study, a general lack of financial education costs Americans a collective $415...
Planning for a Child’s College Expenses Should Start Early
Some in Congress have proposed “free” (i.e., government-paid) tuition for community college attendance. Even if that proposal were to become law, it still leaves parents and their children-students responsible for paying for college and university attendance if the...
Things to Remember When Filing Income Tax Returns in 2022
The IRS is reminding taxpayers about things they should remember when filing their 2021 income tax returns in 2022. According to the IRS, following these tips will help speed tax return processing and avoid refund delays: How to speed up return processing, avoid...
Another Rough Tax Season for IRS and Taxpayers?
This could be another rough tax season for the IRS and taxpayers. Although this year’s filing season opens January 24, 2022 (i.e., it is the first day the IRS will accept and start processing 2021 returns), the Service still has a backlog of prior year returns to...
Advance Child Tax Credit and EIP must be Reconciled on Your 2021 Tax Return
Early in 2021 Congress passed the American Rescue Plan which included a provision that increased the child tax credit amount and upped the age limit of eligible children. Normally, the credit was $2,000 per eligible child under age 17. For the 2021 tax year the...
What is Tax Basis and Why Is It So Important?
For tax purposes, the term “basis” refers to the monetary value used to measure a gain or loss. For instance, if you purchase shares of a stock for $1,000, your basis in that stock is $1,000; if you then sell those shares for $3,000, the gain is calculated based on...
Tax Benefits Available to Disabled Taxpayers
Disabled individuals, as well as parents of disabled children, may qualify for a number of tax credits and other tax benefits. Listed below are several tax credits and other benefits that are available if you or someone listed on your federal tax return is disabled....
Minimum Wage Increases in Virginia
The start of the new year means an increase to the minimum wage in Virginia. The minimum wage will increase from $9.50 to $11.00 an hour on January 1, 2022. It will increase to $12.00 an hour in 2023.
Time is Running Out to Take Your 2021 RMD
Required Minimum Distributions (RMD) are required taxable distributions from qualified retirement plans and are commonly associated with traditional IRAs, but they also apply to 401(k)s and SEP IRAs. The tax code does not allow taxpayers to indefinitely keep funds in...
Tax Benefits for Holiday Gifts
Some holiday gifts you provide to members of your family, employees and others may also yield tax benefits—think of it as Santa Claus meets Uncle Sam. Here are some examples: Electric Car Credit* – If you purchase a new electric car as a holiday gift for your spouse...
Tax Benefits When Saving for College Education
A common question among parents is, “How might I save for a child’s post-secondary education in a tax beneficial way?” The answer depends on how much the education is expected to cost and how much time is left until the child heads off to college or a university or...
Corporations: Do you Really Want to Pay Those Dividends?
If you invest in stocks, you probably look forward to receiving dividend checks (or notices that your dividends have been reinvested) from the companies you own shares in. It’s an added perk of ownership that increases your return on investment. But not everybody is a...
10 Tax Saving Strategies to Consider Before Year-End
It seems hard to believe, but the holiday season is almost upon us, and that means that the 2021 tax preparation season will soon follow. With the end of the tax year just around the corner, tax-savvy individuals need to take some time from their busy schedules to...
Avoiding IRS Underpayment Penalties
Congress considers our tax system a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement. These include: Payroll withholding for employees;Pension...
Watch Out for Tax Penalties
Most taxpayers don’t intentionally incur tax penalties, but many who are penalized are simply unaware of the penalties or the possible damage they can do to their wallets. As tax season approaches, let’s look at some of the more commonly encountered penalties and how...