Why Do People Fear Tax Audits More Than They Fear Overpaying?
by TaxDoctor on December 7, 2018 at 7:45 pm
Ask anyone if they â€œpay too much income taxâ€� and the knee jerk reaction is almost always, â€œyes!â€� and without much hesitation. Why do we call that a knee jerk reaction? Because if you then follow the question up with two more questions, â€œWhat did you pay in federal tax last year? And/or what bracket are you in?â€� they almost as quickly say, â€œI donâ€™t remember, or Iâ€™m not sureâ€�. Or they might guess at a bracket percentage, but usually not correctly. Iâ€™ve even had people profess the pain of paying too much in tax only to discover that not only did they get back all of their withholdings, but were given tax credit refunds of money they did not […]
Holiday Tax Tip #2
by TaxDoctor on November 30, 2018 at 7:54 pm
There are only three weeks left to make something great happen with this yearâ€™s tax bill. If you are over 70, save the time you would have spent getting clothes together and boxing them and driving in the holiday traffic to a charity for the tax deduction (this can be done January 3rd), and instead have your investment advisor set up a direct gift from your IRA to the same charity. It still satisfies â€œRMDâ€� (minimum IRA withdrawal requirements) but takes that amount completely off your taxable income total! If youâ€™re a small business owner that files on a Schedule C , set up your kids to receive payroll from your company and get checks issued and then cashed from […]
Tax Deductible Holiday Parties!
by TaxDoctor on November 16, 2018 at 3:38 pm
It’s that time of year again and many businesses with fat bottom lines, or even just with joy in their hearts, are getting ready to rinse and repeat what they have always done; buying tickets and food (perhaps adult beverages also) to celebrate and appreciate their work force. The new rules generally allow the holiday party if itâ€™s at the office, but the IRS has set new nondeductible guidelines for entertainment. It’s not clear, for instance, if you usually take you entire office to a holiday show, sporting event or concert, whether that part will still be deductible. More time and guidance will shake that all out, but at the moment itâ€™s possible that itâ€™s not, so you may want […]
Free Vacation Possible Through Tax Planning!
by TaxDoctor on November 9, 2018 at 7:59 pm
People love to vacation. Some do it often, while others hold on all year for that one great week and live day by day until that magical start date on the calendar! A new wave in our digital age is to only take three or four day weekends, but do it more often. However you â€œvacationâ€�, they do have one common thread, and that is that they are not free. Furthermore, when you are officially vacationing (which becomes a mind set as wellâ€¦.I am officially on vacation as of right now!) you spend more freely, often with a disregard for cost shopping. â€œIâ€™m stopping at Starbucks for the Mocha Frappuccino, not Dunkin, cause Iâ€™m on vacation!â€�. What if next vacation […]
More Clarity on the New Tax Rules From the IRS Are Out!
by TaxDoctor on November 2, 2018 at 2:22 pm
This time itâ€™s clarification of the home equity mortgage deduction,Â and as with the business meals issue, it’s not as bad as it had first seemed!Â The more the details from the broad rules last February have come out, the more we are liking the news!Â When business meals were first named as no longer deductible, we thought it would be changing the landscape of the power lunch. Â But, details released later softened the blow and it came to light that what the IRS was actually after was a much more targeted class of meals inside entertainment and around employee cafeterias and the like. Now, the details have come out on another headline item that made people groan when first announced: […]