Starting with tax year 2023, if your business has 10 or more W2s and/or 1099s to prepare, you must file them electronically with the IRS.
Tag: Tax season (page 2 of 3)
Get a jump start on next year’s return! The government is constantly coming out with new ways to save on taxes every year. This year the best ways to do so involve energy home savings and electric cars which you can find below:
1) For single-family house-energy savings projects started after August 16, 2022 and that will be completed by September 30, 2031, you may receive the below rebates:
– 50% of the costs up to $4000 maximum if energy savings are at least 35%
– $2000 maximum if the energy savings are more than 20% to less than 35%
2) For new construction of energy saving appliances, the following maximum rebates can be achieved:
– $1750 for a heat pump water heater
– $8000 for a heat pump for space heating or cooling
– $840 for either an electric stove, oven, etc. or an electric heat pump clothes dryer
–
3) For new construction of non-appliance upgrades, the following maximum rebates can be achieved:
– $4000 for an electric load service center upgrade
– $1600 for insulation, air sealing, and ventilation
– $2500 for electric wiring
–
4) The Clean Vehicle Tax Credit – this is a $7500 credit for yourself if you:
– buy a new electric vehicle that has final assembly in North America
– is a four-wheel vehicle and is for use on public streets
– has a minimum battery capacity of 7 kilowatt-hours
– does not exceed $80,000 for vans, SUVs, and pick-ups and $55,000 for other vehicles
To achieve the above credit, your adjusted gross income (AGI) must not exceed:
$300,000 for Married Filing Jointly
$225,000 for Head of Household
$150,000 for all others
The IRS will start accepting personal income tax returns on Monday, January 27th.
The deadline to file your 2019 tax return and pay any tax owed is Wednesday, April 15th.
The IRS continues to encourage taxpayers to file their returns electronically and choose direct deposit for faster receipt of refunds.
This online tool by the IRS allows taxpayers to check the status of their refund anytime.
Taxpayers can start checking on the status of their return within 24 hours after the IRS received their e-filed return, or four weeks after they mail a paper return.
For tax year 2017, student must receive Tuition Statement, form 1098-T, from an eligible institution to claim the tuition and fees deduction, American opportunity credit, or the lifetime learning credit,
There are certain reasons why institutions will not send you form 1098-T. For example having tuition waived or paid in full with scholarships, being a non-resident student, or having a formal separate financial and billing arrangement with an employer or government agency.
Keep records to prove enrollment, related expenses and tuition payments. This can be used to send to the IRS directly to claim the credit.
For more information and a test of questions to determine eligibility Click Here!
President Trump recently signed the tax reform bill into law which resulted into major changes to the code for both individuals and corporations. Here is a brief summary of the changes that will affect most of you.
- Tax Brackets – Same number of brackets, different tax rates and different ranges. If your taxable income is the same in 2018 as was 2017, you will pay less federal taxes. A lot of the difference are in the changes leading to “taxable income”.
- The marriage penalty is almost gone. – Under the old law the combined income for a married couple was taxed at a higher rate than the same total income for 2 individuals. For example: a single person with taxable income of $90K would be in the 25% bracket. A couple with $180k in taxable income is in the 28% bracket. Under the new law, both cases are in the 25% bracket.
- New Standard Deductions
| Filing Status | Old Law | New Law |
| Single | $6,500 | 12,000 |
| MFJ | 13,000 | 24,000 |
| MFS | 6,500 | 12,000 |
| HOH | 9,350 | 18,000 |
- Capital Gains (stock sales and sales of other appreciated assets)
-
- Short term gains are taxed as ordinary income (no difference)
- Long term rates are as follows:
| Single | MFJ | HOH | MFS | |
| 0% up to: | $38,600 | $77,200 | $51,700 | $38,600 |
| 15% up to: | 425,000 | 479,000 | 452,400 | 239,500 |
| 20% over | 425,000 | 479,000 | 452,400 | 239,500 |
- Tax Breaks for Parents. The child tax credit is increased from $1,000 per child to $2,000 per child. Of that amount $1,400 is refundable. In addition, the phase out for eligibility is expanded.
| Tax Status | Old Law | New Law |
| MFJ | $110,000 | $400,000 |
| Individuals | $75,000 | $200,000 |
-
- If children are 17 years and older or you care for elderly relatives, you can claim a nonrefundable credit of $500 each.
- Home mortgage interest can only be taken for mortgage balances up to $750,000. This was previously $1 million. This applies to loans taken after Dec. 15, 2017. Interest on home equity debt can no longer be deducted.
- State and Local Tax Deduction (SALT) is now limited to $10,000.
- Deductions that are disappearing:
-
- Casualty and theft losses
- Unreimbursed employee expenses
- Moving expenses
- Pass-through income from sole proprietorship, LLCs, partnerships, and S corporations will be able to deduct 20% of the profit. There are phaseout income limits that apply to “professional services” business owners. They are $157,500 and $315,000 for individuals and married couples respectively.
- Corporate tax rates have been reduced for most corporations, but not for all. A corporation with profit below $50,000 will pay more in taxes. The new rate is 21% for all profits. The old rates were:
| From | To | Rate |
| $0 | $50,000 | 15% |
| 50,000 | 75,000 | 25% |
| 75,000 | 100,000 | 34% |
| 100,000 | 335,000 | 39% |
- Interesting: If in 2017 your corporate profit was $50,000; your federal tax was $7,500 (50K * 15%). That tax increases under the new law to $10,500 (50K * 21%). Let’s hope this is corrected soon.
This holiday season, if you’re in the spirit of giving, charitable contributions can be the gift that gives back!
Charitable contributions made to qualified organizations can help lower your tax bill. Record keeping of donations and contributions must be maintained no matter the amount. To properly back up your contributions please keep bank records, receipts, or payroll deductions reflecting the amount.
If you are receiving a benefit for your contribution, you can only deduct the amount that exceeds the fair market value (ex. gala tickets). Non-cash donations such as household items and clothing, must be in good used condition and valued at fair market price.
For more information, read these eight tips the IRS provides here!
© 2024 Business of Your Business
Theme by Anders Noren — Up ↑