KENTLAND — Kentland Bank President/CEO Kirby D. Drey announced recently the promotion of Nanci Jackson to Senior Vice-President Financial Services, Laura Barrett to Vice-President of Finance a…
MOROCCO — How much would it cost to bring and install high-speed broadband internet throughout every part of Newton County?
MOROCCO — A partnership between the Town of Morocco and the Newton County Economic Development Commission (NCEDC) could result in new businesses downtown as well as a new residential developme…
ATLANTA — Late last week (Jan. 3, 2020) Coca-Cola Company announced via a press release that it has acquired the remaining stake in fairlife LLC from its joint venture partner Select Milk Producers.
Caring for an elderly relative can be rewarding, but incredibly difficult – as well as expensive. However, it may be possible to recoup some of the costs through income tax savings.
There are two general approaches to tax savings on elder care costs – taking medical deductions that can be itemized and claiming a dependent care credit that can be subtracted directly from the taxes you owe.
First, you must determine if your elderly relative qualifies as a dependent. Full details are listed in IRS Publication 501, "Dependents, Standard Deduction, and Filing Information," but the primary criteria are that they must be a relative, you must be providing over half of their support, and their gross 2019 income must be less than $4,200.
The definition of relatives includes stepparents and in-laws. They do not...
When you use your car for both personal and business reasons and you are not fully reimbursed through your employer for the business expenses, you can deduct those costs from your taxes. How do you go about claiming these deductions? Assuming that you itemize, you have two general paths:
- Standard Mileage Method – The IRS prints flat rates of reimbursement per mile driven for each calendar year. For business use of your vehicle in tax year 2019, the standard mileage rate is 58 cents per mile, up from the 2018 value of 54.5 cents per mile.
- Actual Expense Method – Rather than calculate an average based on miles, you can calculate the actual expenses related to the non-personal use including gas, oil, maintenance costs, depreciation, tolls, parking fees, insurance, and other applicable expen...
A stable income is critical to a comfortable retirement – as is limiting the amount of that income that you give to Uncle Sam. Maximizing retirement income and minimizing taxes requires advance planning – as illustrated in these seven tips.
1. Use a Roth IRA
Because Roth IRAs are funded with post-tax dollars, they are flexible retirement income sources and excellent for plugging retirement income gaps. You may draw contributions out at any time and earnings may be withdrawn tax-free if you are at least age 59½ and have had the account for at least five years.
Roth IRA contributions are less attractive when you are in higher-earning years where a high tax bracket applies. Contribute to a Roth IRA when tax conditions are favorable or convert a traditional IRA to a Roth IRA in a year where your adjusted gross income (AGI) is low, taking the tax hit while you'r...
In general, deducting pet expenses on your tax return can get you into hot water with the Internal Revenue Service (IRS). Usually pet expenses will not hold up should the IRS audit you. However, specific cases exist that allow you to take legitimate tax deductions for spending on your pet.
Regardless of how you justify your pet deductions, make sure that you have receipts and documentation for all expenses you claim on your tax return or they will be disallowed.
Guard animals could pass muster for a deduction for your business. If you consider deducting your pet as a guard animal, make sure that they actually perform guard duties. Your pet's breed should be one that is often considered that of a typical guard animal. For instance, a pit bull could be considered a guard dog while a Chihuahua probably would not.
It would be beneficial if you could pr...
What two words cause the most panic to Americans? There are probably a hundred funny responses running through your mind right now, but we were thinking of a less humorous response: "IRS audit."
Your odds of avoiding an audit are usually pretty good. The IRS reviewed almost 1 million tax returns in fiscal year (FY) 2018, resulting in a low audit rate of 0.5%. Raising red flags in your return are likely to increase your odds of being audited. Some of these cannot be avoided, but others are essentially errors in judgment.
- You Are Wealthy – The IRS disproportionately audits wealthier Americans. Why? As the famous bank robber Willie Sutton allegedly said, "Because that's where the money is." Think of it as a return on investment of IRS time. As Betterment Head of Tax Eric Bronnenkant puts it, "The IRS audits wealthy people because they're the ones who are the most likely to get an adjustment out of it."
While there may be an element...
The Internal Revenue Service has plenty of ways to penalize you for mistakes on your tax return. Some of these potential penalties are so convoluted and complex that there may well be disagreement within the IRS on when they apply. However, most people accrue tax penalties for very simple mistakes. Below are some of the more common yet easily avoidable mistakes.
- Failing to File – Do you really think the IRS will forget about the fact that you did not file your tax return? It may take some time, but the IRS will eventually catch up with you. Expect little sympathy if you do not file. The IRS is willing to work with people to make payments, but if you make no effort at all, you are subject to the non-filing penalties of 5% per month of the due taxes, up to 25% of your unpaid tax bill.
Many people simply put off filing until it is too late, and then think that doing nothing is better than attempting to file a potentially wrong return. You ca...
By Eric Olsen, Executive Director, HELPS Nonprofit Law Firm
At this time of year, creditors sometimes send out what is called a Form 1099-C. They email it to the Internal Revenue Service (IRS) and copy the person who owes them debt. The form tells the IRS that they, the company who is owed the debt, has tried (unsuccessfully) to collect and the unpaid debt is now "written off."
Seniors are often told by their tax preparers that they now have to pay taxes on the debt contained in the 1099-C, as it is now considered income they received. This is almost always NOT the case and I shudder to think of all the taxes that have been paid because of a 1099-C when it wasn't necessary. Often, you don’t have to pay if you know what to do.
The rule is that to the extent a person is insolvent, meaning their debts exceed their assets, they DO NOT OWE TAX. IRS Form 9...
The Tax Cuts and Jobs Act (TCJA) of 2017 gave most Americans a break on their upcoming taxes – but you don't need legislation to cut your taxes even further with sound investment strategies that focus on tax optimization.
Here are a few ways to help yourself at Uncle Sam's expense.
1. Shift Toward Capital Gains – The TCJA narrowed the gap between individual tax rates and capital gains taxes, but it's still preferable from a tax perspective to have investments that rely on price appreciation for returns instead of income generation. Returns on the former are taxed at the capital gains rate (15-20%, with a few exceptions) while returns on the latter are taxed per the standard income brackets.
2. Qualified Pass-Through Income – The TCJA also handed a huge, albeit temporary, gift to many small-business owners by allowing a 20% tax d...
Does your ability to pass on your wealth to your heirs depend on where you live ... and die? Indeed, it does. Federal estate taxes apply no matter where you live within the U.S., but eighteen states subject their citizens to estate taxes or inheritance taxes. The difference between the two is that estate taxes are subtracted from an estate before it is dispersed to the heirs, while the inheritance tax applies to the heirs — even if they live in a different state than the deceased.
Inheritance taxes only apply in six states: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. All of these states completely exempt spouses from paying inheritance tax, and New Jersey exempts domestic partners, too. Children and siblings are also often exempted. Nebraska and Pennsylvania are the only states where children and grandchildren...
Thanks to the Affordable Care Act (ACA), you should receive 1095 forms along with the W-2, 1099, and other tax forms that you receive from employers and financial institutions. The 1095 forms verify your health care insurance status for tax purposes. 1095-A forms debuted in 2015, while taxpayers received 1095-B or 1095-C forms for the first time in 2016.
All You Need to Know About the ObamaCare Tax Forms
Form 1095-A is issued through the Federal Health Insurance Marketplace for those who purchased health insurance through the marketplace. Effectively, it is your proof of insurance if you are receiving insurance outside of an employer. All consumers who received cost assistance through the marketplace need the 1095-A form to be able to file their taxes properly.
Forms 1095-B and 1095-C are complementary forms...
Let's assume that you drew the short straw on the 2019 tax cuts, and you owe Uncle Sam this year. How do you plan to pay? There are plenty of ways other than the old-fashioned check submitted with a paper tax return.
If you file electronically, why not pay electronically? Electronic Funds Withdrawal (EFW) is available whenever you e-file your taxes.
When you e-file your taxes through commercial software, a paid tax preparer, or the IRS Free File program, simply submit an EFW payment request. You'll provide bank account information so funds may be withdrawn from your account directly. If you e-file early, you can schedule the funds to be paid at a later date (but before the due date for your return).
Social Security is generally considered a tax-free benefit, but that is not always the case. Depending on the amount of alternate income that you have in retirement and your filing status, you could owe taxes on up to 85% of your Social Security benefits.
If you receive Social Security or Social Security Disability Insurance (SSDI) income, you will also receive a Form SSA-1099 from the government. This form tells you the total amount of your benefits but does not tell you if any of your benefits are taxable, or at what percentage.
You can IRS Free File to e-file your return (if you make no more than $69,000), and the software will figure the taxable component of your benefits for you. However, you can get a reasonable estimate by combining half of your Social Security benefits with all other income (includi...
April is National Financial Literacy Month. Why do we dedicate this calendar page to highlighting financial skills and education? The tax deadline? Sound financial decisions are important all year long, but most Americans never learned how to manage money or save for goals, so financial security is a bigger challenge than it needs to be.
Even if you can handle the math involved — and calculators can help if you can't — things get complicated when making large (often emotional) financial decisions. Some of the most common pitfalls are described below. If you recognize any of them, you're not alone. The good news is that you have an opportunity to improve your finances and save more money.
An emergency fund is essential because you need to absorb life's surprises without making things worse. Without a stash of cash, you'll have to take...
It is an exciting time when you start your new business. You have so many things to think of that you may forget one of the most important aspects — taxes. Before you dive into the business world, take a few minutes to consider the tax aspects of your new business.
Your tax obligations are strongly affected by the type of business structure you choose. Typical business structures include sole proprietorships, partnerships, C Corporations, S Corporations, or Limited Liability Corporations (LLCs).
Sole proprietorships, partnerships, and LLCs are reported using personal tax returns because profits are passed through to the owners. Other corporate structures require filing a corporate tax return. Corporate structures generally shield personal accounts from business debt but come with varying levels of tax reporting and compl...
You have just received an inheritance. What do you do now? You could spend it on some extravagance, but you would be better off doing two things first: assessing the tax ramifications and thinking about some investment options.
"Death taxes" are somewhat misunderstood, as people can find the two types of death taxes confusing. Estate taxes apply to the front end of the wealth transfer process and are subtracted from the overall value of the estate. They only apply to huge estates and reduce the size of your inheritance upfront; you have no further tax obligation. The Tax Cuts and Jobs Act (TCJA) increased the estate tax lifetime exemption amounts to $11.4 million for single filers and $22.8 million for married couples filing jointly in tax year 2019.
Inheritance taxes, where they exist, apply to recipients. There are no federal inheritance taxes...