If you own a home, the interest you pay on your home mortgage may provide a tax break in the form of the mortgage interest deduction. However, you must itemize deductions on your tax return and follow a few other rules. Acquisition debt A personal interest deduction...
Any U.S. person who has a financial interest in, or signature or other authority over, any foreign financial accounts must file a Report of Foreign Bank and Financial Accounts (FBAR) if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during...
When the COVID-19 pandemic first hit, many people’s emergency funds were suddenly put the test. Now, presumably with the benefit of some hindsight, the financially savvy might want to reconsider their approach to saving. This brief article discusses some key points to keep in mind....
Everyone’s personal financial plan doesn’t have to be complex, but it does generally need to cover two major facets: paying down debt and saving money. This brief article discusses the importance of identifying one’s financial personality and using that as a guide to creating a...
Many people might think about moving to another state. However, it’s important to consider the tax ramifications before doing so. This article urges readers to identify all applicable taxes in a destination state and recommends being prepared to meet the legal requirements for establishing domicile....
Many people have found themselves working from home during the COVID-19 pandemic and wondering, “Can I claim the home office deduction for 2020?” The short answer is: Only if you’re self-employed. This article delves deeper into the other rules involved....
The federal child tax credit is available to help many taxpayers with children under the age of 17, and there’s a dependent credit for those who are eligible with older children. This article explores the details. A sidebar explains that a qualifying child must have...
Now’s a good time for taxpayers to familiarize themselves with pertinent tax-related amounts that may or may not be changing in 2021 because of inflation. This article poses six key questions about such amounts, including those related to retirement planning and the itemized deduction....
During the COVID-19 pandemic, many cash-challenged businesses have bartered for goods and services instead of paying dollars for them. This article discusses the tax impact of bartering and explores membership in a barter exchange....
Perpetrators of investment fraud know how to push the right psychological buttons to entice their “marks” to buy worthless or nonexistent securities. This article explains how to recognize and mitigate risk by asking the right questions, performing some research and consulting with trusted advisors....
Wealthier individuals should bear in mind that the Tax Cuts and Jobs Act temporarily doubled the federal gift and estate tax exemption through 2025. This brief article provides specifics on the dollar amounts involved and explains why there’s no reason to fear a “clawback.”...
This calendar notes important tax deadlines for the first quarter of 2021....
For many, December 31 means a New Year’s celebration. From a tax perspective, however, it should mean thinking about which filing status you will use for that year’s tax return. This article reviews the five statuses. A sidebar looks at whether a married person can...
As the end of 2020 draws near, investors should take the time to review any mutual fund holdings in their taxable accounts and take steps to avoid potential tax traps. This article offers helpful tips such as avoiding capital gains surprises and being careful about...
There’s a tax-advantaged way for people to save for the needs of family members with disabilities — without having them lose eligibility for government benefits to which they’re entitled. It can be done through an Achieving a Better Life Experience (ABLE) account, which is a...
When it comes to retirement planning, many people tend to focus on two things: opening a retirement savings account and then eventually drawing funds from it. However, there are other important aspects to truly doing everything you can to grow your nest egg. One of them...
A Health Savings Account (HSA) coupled with a high-deductible health plan can be a powerful tool for funding medical expenses on a tax-advantaged basis. For 2020, individuals with self-only coverage can make up to $3,550 in tax-deductible contributions to an HSA, while those with family...
Nonqualified deferred compensation (NQDC) plans allow participants to set aside large amounts of tax-deferred compensation while enjoying the flexibility to schedule distributions to align with their financial goals. However, the plans also pose substantial risks. If your (or a prospective) employer offers an NQDC plan,...
If you’re planning to sell capital assets at a loss to offset gains that have been realized during the year, it’s important to beware of the “wash sale” rule. Under this tax rule, if you sell stock or securities for a loss and buy substantially...
Because of the economic impact of the COVID-19 crisis, many companies may want to conserve cash and not buy much equipment this year. As a result, you may not be able to claim as many depreciation tax deductions as in the past. However, if your...
October 15 — Personal federal income tax returns for 2019 that received an automatic extension must be filed today and any tax, interest, and penalties due must be paid. The Financial Crimes Enforcement Network (FinCEN) Report 114, “Report of Foreign Bank and Financial Accounts” (FBAR),...
The term “sandwich generation” describes people caught between caring for their aging parents and their children. This brief article encourages those in the middle part of the sandwich to initiate family discussions with the other two parts to discuss tax and financial planning issues....
The COVID-19 pandemic has provided many lessons for business owners. One is how to report the impact of a disaster on a company’s financial statements. This brief article discusses two types of “subsequent events” that may need to be disclosed....
Many people assume that a 529 plan is the ideal college savings tool. But other vehicles can help parents save for college expenses — for example, the Roth IRA. This article compares key features of the two account types....
Generally, it’s recommended that individuals review their estate plans at year’s end. However, with a life shock as monumental as the COVID-19 pandemic, it might be a good idea to get an earlier start. This article provides examples of potential revisions and discusses wills and...
Although the Tax Cuts and Jobs Act took much of the “teeth” out of the AMT by raising the inflation-adjusted exemption, high-income earners (and even some middle-income earners) should still watch out for its bite. This article discusses the basic rules and the role of...
The Coronavirus Aid, Relief and Economic Security Act fixed a legislative glitch that prevented businesses from claiming 100% bonus depreciation for qualified improvement property. This brief article describes the situation and advises business owners to keep this tax break in mind....
If you’re like many people, you’ve worked hard to accumulate a nest egg in your traditional IRA. Knowing the finer points of the distribution rules is critical — particularly as some of these rules have temporarily changed under the Coronavirus Aid, Relief and Economic Security...
The sudden and severe impact of the novel coronavirus (COVID-19) pandemic has generated an intense need for charitable action. This article outlines tax incentives under the CARES Act for charitable giving and suggests some careful steps to take before donating....
If your company has been able to keep some or all of its workers on its payroll, remember that you may still be able to qualify for the payroll tax credit created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This article discusses...
