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The Home Office Deduction can provide valuable tax savings for self-employed taxpayers who regularly conduct business from home. But simply answering emails from the kitchen table or occasionally working from the couch doesn’t necessarily qualify. Generally, you must use a specific portion of your home exclusively and regularly for business and satisfy one of the…
The Qualified Business Income Deduction can be a valuable tax break for eligible small business owners and self-employed taxpayers. If you operate a sole proprietorship or own an interest in a partnership, S corporation, or certain other pass-through businesses, you may be able to deduct up to 20% of your qualified business income (QBI) on…
Business Expense Deductions are one of the most valuable tax-saving opportunities available to self-employed individuals and small business owners. Every legitimate expense you document may reduce your taxable net income, but only when you can show that the cost was connected to your business. Whether you are a sole proprietor, independent contractor, freelancer, consultant, or…
Retirement savings are designed for retirement. That’s why Avoid Early Withdrawal Penalties should be part of every taxpayer’s financial plan. Withdrawing money from most retirement accounts before age 59½ can trigger a 10% early withdrawal penalty in addition to ordinary income taxes. Unless you qualify for a limited IRS exception, taking money out too soon…
Retirement should bring peace of mind. It shouldn’t bring an unexpected tax surprise. Many retirees spend years building their retirement savings, but fewer understand what happens when the IRS requires them to start taking money out. These mandatory withdrawals are called Required Minimum Distributions (RMDs), and failing to plan for them can lead to unnecessary…
Saving for retirement is smart. Getting a tax credit for doing it is even better. Many taxpayers know about Traditional IRAs and Roth IRAs. Far fewer know about the Saver’s Credit, officially called the Retirement Savings Contributions Credit. This valuable tax credit rewards eligible low- and moderate-income taxpayers for contributing to retirement accounts. Unlike a…
You pay the taxes now. Then, if the rules are met, qualified withdrawals in retirement can be completely tax-free. That is the basic appeal of a Roth IRA. Unlike a Traditional IRA, contributions are made with money that has already been taxed. You generally do not receive a deduction today. In exchange, your investments can…
Retirement planning isn’t just about the future. It can also provide valuable tax benefits today. One of the simplest ways to reduce your current taxable income while building long-term retirement savings is by contributing to a Traditional IRA. Depending on your income and eligibility, your contributions may be tax-deductible, and your investments can grow tax-deferred…
The IRS Already Knows About Your Investment Income.Make Sure Your Tax Return Does Too. Many taxpayers focus on their W-2 income when preparing a tax return. But investment income is often where mistakes happen. Interest from savings accounts. Dividends from stocks. Capital gains from investments sold during the year. These income sources may seem small…
Selling your home can be exciting. It can also raise an important tax question: Will you owe taxes on the profit? The answer may be no. Many homeowners qualify for the Home Sale Exclusion, one of the most valuable tax benefits available to individuals. If you meet the IRS requirements, you may be able to…
Most homeowners save receipts for major improvements while the project is happening. Then they throw them away. That can be an expensive mistake. Many home improvements increase your home’s cost basis, which can reduce the taxable gain when you eventually sell the property. The IRS may not give you credit for those improvements unless you…
Most homeowners think about refinancing for one reason: saving money. Lower interest rates. Lower monthly payments. Better cash flow. Those are all good reasons to refinance. But before you sign new loan documents, it’s important to understand how refinancing affects your mortgage interest deduction. Many taxpayers assume all refinance interest remains deductible. The IRS has…
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