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Capital Losses Tax Tip:

If a taxpayer’s capital losses are more than their capital gains, they can deduct the difference as a loss on their tax return. This loss is limited to $3,000 per year, or $1,500 if married and filing a separate return. If a taxpayer’s total net capital loss is more than the limit they can deduct,…
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Falsifying Income Tax Tip:

Falsely increasing income to secure larger refundable credits such as the Earned Income Tax Credit can have serious repercussions. This scam involves inflating or including income on a tax return that was never earned, either as wages or self-employment income. Taxpayers can face a large bill to repay the erroneous refunds, including interest and penalties. In…
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Education Tax Credits Tax Tip:

An education credit can help with the cost of higher education. Two credits are available: the American Opportunity Tax Credit and the Lifetime Learning Credit. These credits may reduce the amount of tax owed. If the credit cuts a taxpayer’s tax to less than zero, it could mean a refund. If you need assistance preparing…
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Self-Employment Taxes Tax Tip

Self employment taxes are comprised of two parts: Social Security and Medicare taxes. If you are self-employed, your Social Security tax rate is 12.4 percent and your Medicare tax is 2.9 percent on those same amounts of earnings but you are able to deduct the employer portion. You will pay an additional 0.9% Medicare tax on…
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Employee vs Independent Contractor Tax Tip

You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services…
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Tax Effects of Divorce or Separation Tax Tip:

If you are divorcing or recently divorced, be aware of this event can have an impact on your taxes. Any child support payments you receive/pay are not taxable or tax deductible. However, alimony received  from your former spouse is taxable income in the year received. Alimony paid under a divorce, separation decree are tax deductible.…
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Child Tax Credit

Tax Tip: The child tax credit is a tax credit that may save taxpayers up to $1,000 for each eligible qualifying child. Taxpayers should make sure they qualify before they claim it. A qualifying child must pass several test regarding age, relationship, support, dependency, filing of a joint return, citizenship, and residency. If you need…
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Contributions to Traditional IRA

Tax Tip: Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. If neither the taxpayer nor…
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Early Withdrawals From Retirement Plans

An early withdrawal normally is taking cash from a retirement plan before the taxpayer is 59 1/2 years old. If a taxpayer took an early withdrawal from a retirement plan last year, they must report it to the IRS. Additionally, the taxpayer may have to pay an additional 10% in taxes. If you need assistance with…
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Tax Scam

If you receive a surprise call from the IRS, it almost certainly not the IRS. The IRS generally sees a surge in scam phone calls that threaten police arrest, deportation, license revocation, and other things during the filing season. Be aware that the IRS generally initially contacts taxpayers by mail. If you need assistance preparing…
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