With the fall semester of the school year well underway teachers, administrators and aides should not forget to keep track of education-related expenses that could help reduce their taxes when they file their returns next spring. With that in mind, let’s take a look at three key work-related tax benefits that are available to educators.
Educators can take advantage of tax deductions for qualified expenses related to their profession. The costs many educators incur out-of-pocket include items such as classroom supplies, training and travel.
There are two methods educators can choose for deducting qualified expenses: Claiming the Educator Expense Deduction (up to $250) or, for those who itemize their deductions, claiming eligible work-related expenses as a miscellaneous deduction on Schedule A, Itemized Deductions.
A third key benefit enables many teachers and other educators to take advantage of various education tax benefits for their ongoing educational pursuits, especially the Lifetime Learning Credit or, in some instances depending on their circumstances, the American Opportunity Tax Credit. Continue reading
Let’s say you have a regular customer who used to pay on time, but he’s been hit-and-miss lately. How do you get him caught up? Or, one of your customers thinks she’s paid you more than she owes. How do you straighten out this account?
Both of these situations have a similar solution: QuickBooks’ Statements.
QuickBooks’ statements provide an overview of every transaction that has occurred between you and individual customers during a specified period of time. They’re easy to create, easy to understand, and can be effective at resolving payment disputes. Continue reading
Background: What is Equifax?
Equifax is one of three major U.S. credit reporting bureaus. The other two are TransUnion and Experian. There is also a smaller, less well-known credit-reporting agency called Innovis (aka CBCInnovis) that operates slightly different in that its main purpose is to provide mortgage credit reporting services to the financial services industry.
Equifax, like TransUnion and Experian, track the financial histories of consumers and use this information to analyze whether a person is “credit-worthy” by issuing them a credit score. The credit score is based on the credit history contained in the credit report, a record of consumers’ financial histories. Credit reports are comprised of information about your bill payment history, loans, current debt, and other financial information. Credit reports also contain information about where you work and live and whether you’ve been sued, arrested, or filed for bankruptcy.
Credit reports, which are also called credit records, credit files, and credit histories, help lenders decide whether or not to extend you credit or approve a loan, and determine what interest rate they will charge you. Prospective employers, insurers, and rental property owners may also look at your credit report. Typically, the information collected on consumers is sold by the credit bureau (e.g., Equifax, Experian, or TransUnion) to credit card companies and other financial institutions.
The hackers had access to data from May 2017 to July 2017, including names, birth dates, Social Security numbers, driver’s license numbers and credit card numbers. Continue reading
If you’re looking to save money on your taxes this year, consider using one or more of these tax-saving strategies to reduce your income, lower your tax bracket, and minimize your tax bill.
Max Out Your 401(k) or Contribute to an IRA
You’ve heard it before, but it’s worth repeating because it’s one of the easiest and most cost-effective ways of saving money for your retirement.
Many employers offer plans where you can elect to defer a portion of your salary and contribute it to a tax-deferred retirement account. For most companies, these are referred to as 401(k) plans. For many other employers, such as universities, a similar plan called a 403(b) is available. Check with your employer about the availability of such a plan and contribute as much as possible to defer income and accumulate retirement assets.
Tip: Some employers match a portion of employee contributions to such plans. If this is available, you should structure your contributions to receive the maximum employer matching contribution.
If you have income from wages or self-employment income, you can build tax-sheltered investments by contributing to a traditional (pre-tax contributions) or a Roth IRA (after-tax contributions). You may also be able to contribute to a spousal IRA even when your spouse has little or no earned income. Continue reading
What is Tax Planning?
Tax planning is the process of looking at various tax options to determine when, whether, and how to conduct business transactions to reduce or eliminate tax liability.
Many small business owners ignore tax planning. They don’t even think about their taxes until it’s time to meet with their CPAs, EAs, or tax advisors but tax planning is an ongoing process, and good tax advice is a valuable commodity. It is to your benefit to review your income and expenses monthly and meet with your CPA, EA, or tax advisor quarterly to analyze how you can take full advantage of the provisions, credits, and deductions that are legally available to you.
Tax Planning Strategies
Countless tax planning strategies are available to small business owners. Some are aimed at the owner’s individual tax situation and some at the business itself, but regardless of how simple or how complex a tax strategy is, it will be based on structuring the strategy to accomplish one or more of these often overlapping goals:
- Reducing the amount of taxable income
- Lowering your tax rate
- Controlling the time when the tax must be paid
- Claiming any available tax credits
- Controlling the effects of the Alternative Minimum Tax
- Avoiding the most common tax planning mistakes
In order to plan effectively, you’ll need to estimate your personal and business income for the next few years. This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. You will want to avoid having the “right” tax plan made “wrong” by erroneous income projections. Once you know what your approximate income will be, you can take the next step: estimating your tax bracket. Continue reading
With less than three months remaining in the calendar year, now is a good time to double check your federal withholding to make sure enough taxes are being taken out of your pay.
Most people have taxes withheld from each paycheck or pay taxes on a quarterly basis through estimated tax payments. But each year millions of American workers have far more taxes withheld from their pay than is required. In fact, according to the IRS, the average individual income tax refund for Fiscal Year 2016 was about $3,050. As such, taxpayers might want to consider adjusting their tax withholding to bring the taxes they must pay closer to what they actually owe–and put more money in their pocket right now. Continue reading
Whether you’re self-employed or an employee, if you use a car for business, you get the benefit of tax deductions.
There are two choices for claiming deductions:
- Deduct the actual business-related costs of gas, oil, lubrication, repairs, tires, supplies, parking, tolls, drivers’ salaries, and depreciation.
- Use the standard mileage deduction in 2017 and simply multiply 53.5 cents by the number of business miles traveled during the year. Your actual parking fees and tolls are deducted separately under this method.