Tax Tips

Do you utilize contractors throughout the year for your business? If so, be sure you are getting a W-9 from each contractor before you pay them anything. If a potential contractor ever refuses to provide their personal information or a completed W-9, terminate them immediately. And remember, any individual you pay more than $600 in a calendar year must receive a 1099 from you.

Making a charitable donation this holiday season? Be sure to confirm that the organization is tax exempt and that you will be able to deduct the donation at tax time. Check out the IRS's Tax Exempt Organization Search tool at IRS.gov.

Have you received a check recently from the IRS? Did you owe more than $1000 when you filed your 2018 tax return? If so, that check MAY be a partial reimbursement of penalties assessed by the IRS for failure to make estimated payments. In early 2018 the IRS lowered penalty rate and promised to reimburse tax payers. If you're unsure about the validity of a check, always call the IRS before depositing the money.

Do you make donations to your favorite university or college in exchange for tickets/personal seat licenses? In the past, a significant amount of the donation was tax deductible. The TCJA removed this deduction. Still want to support your team or school? First, confirm that it is a 501(c)(3) organization then pick a cause to support. You may be able to earmark $$ for specific sports/clubs. Donations to booster clubs, charity dinners, & donations of raffle items are also potentially...

If you work from home and are self-employed or earn 1099 income, you may be missing out on major home office tax deductions. Make sure you are providing your tax professional with a summary of the following payments for the year at tax time: all utilities (including trash), mortgage interest/rent, home owners/renters insurance, HOA dues, any improvements to the office space, and any repairs to the entire home (such as replacing the HVAC) along with square footage info.

Are you receiving social security benefits but plan to keep working? If you are taking benefits before full retirement age, you can earn up to $17,640 (in 2019) without affecting your SS benefits. Above that amount, your benefit will start reducing by $1 for every $2 of earned income. Once you reach full retirement age, earned income has no effect on your social security benefits.

📢 Tax Tip Tuesday! Surprised by your balance due or a shrunken refund this year? Your decreased withholdings may have been the culprit. Did you know that you can add a dollar amount to your withholdings in addition to the status you claim? For example, if you claim Married-0 on your W-4 but still received a tax bill, you can ask your HR to add an additional amount to your withholdings. For example, Married-0 + $100.

Do you work from home or drive your own vehicle for work purposes? Have you written off those expenses in the past? The new tax law has resulted in major changes to these deductions for W-2 employees. If you receive a W-2 from your employer, expenses you incur as a result of your job (meals, parking, supplies, etc.) along with home office expenses and mileage are no longer deductible. However, if you're self employed or an independent contractor you can still deduct these expenses.

Did you know that you can elect to itemize deductions? I.e. if the total of your itemized deductions is close to the standard deduction you can elect to itemize & take the lower deduction on your federal taxes. Why? States have much lower standard deductions and by itemizing your federal return you can also itemize on the state. This strategy can result in a greater overall benefit to your tax refund or balance due. Talk with your tax professional to see if this approach makes sense for you.

📢 Tax Tip Tuesday! Was your return rejected and you suspect that someone has filed a return using your social security number? Unfortunately, tax payers find themselves in this situation far too often. Visit the IRS website for information on what to look for and what to do next.

The government shutdown greatly affects the IRS. It is estimated that close to 90% of their workforce is currently furloughed. As a result, if you call the IRS to ask a question, you are not likely to get through and if you do, you should expect a significant wait time. If you have urgent questions, check out the IRS website. It is full of easy-to-use tools and useful information. They even have a mobile app! #taxtips #taxtiptuesday

Do you have an ITIN (Individual Taxpayer Identification Number)? If so, be sure to submit your renewal application as soon as possible! Failure to renew prior to the end of the year can result in refund and processing delays when you file your 2018 return next year. Visit the IRS website for additional information. #taxtips #taxtiptuesday