For most taxpayers tax season means a nice refund. However, for some taxpayers, the news is not as good. So what if you’re one of those taxpayers that owes the IRS money after filing your return? How should you pay it off? For example, could you pay off your tax bill with a credit card?
Yes, you could use a credit card. But is that a good idea? It’s probably not, in most cases. In reality, it should be a last resort. If you simply can’t afford to pay your tax bill then using a credit card might be a viable option. However, there are some things you should know.
If you use a credit card, you’ll also have to use a payment processor. And that means you’ll have to pay an extra fee for that. The IRS also limits how many times you can use a credit card to make tax payments in a given year. If you’re paying your prior- or current-year taxes then you can only pay via credit card twice per year. That is unless you use an installment plan.
The other thing to keep in mind is interest. Unless you open a new, interest-free card and pay off tax your bill within the interest-free period, you’ll have to pay interest on your credit card bill. That means your overall bill will be even higher.
In most cases, you’re better off setting up a payment plan with the IRS and avoiding the extra fees and interest that come with using a credit card.
Ready or not, the 2019 tax season is here. So if you’re not ready, here are some things you need to do. These facts and tips will help you get started. First off, tax returns are due on April 15. That’s the typical due date, but the last two years it has actually been pushed back a couple of days because the 15th fell on a weekend or a holiday.
However, don’t wait till April 14 to file your taxes. It pays to get them done early. For starters, if you’re expecting a refund then the longer you wait to file, the longer it will take to get that money into your hands. And if you owe money, then you’ll want to know as soon as possible. That way you’ll have as much time as you need to pay it off.
You also need to gather up everything you’ll need to file your return. That includes Form W-2s, Form 1099s, any receipts you might be able to use for deductions, etc. Anything that pertains to taxes you should gather into one place. Of course, you can make the entire process go much smoother by hiring the right tax and accounting firm to prepare your taxes for you.
Your tax season doesn’t have to be a horrible experience. Just plan, prepare and contact GROCO.
One of the most common tax deductions for those who have a business is the use of a vehicle. If you use your vehicle for business then depending on your situation, you could reduce your business income significantly. That could be a big boost to your tax situation.
By reducing your business income you could save on both your personal income taxes and your self-employment taxes. Here’s what you need to know about claiming your vehicle expenses as a deduction to help you save more on taxes.
When calculating your vehicle tax deductions, you have two options. You can use the Actual Expenses Method, which are the exact expenses you incur when using your vehicle for your business. But you can only claim the percentage of expenses used for business purposes not personal. These include:
Fuel and oil
The other option is to use the Standard Mileage Method. With this method you need to track all the miles you use your vehicle for business purposes. Then you multiply your business miles by the amount designated by the IRS. For the 2018 tax year, that’s 54.5 cents a mile.
Either way, if you use your vehicle a lot for business, keeping track of and claiming your expenses could save you a significant amount at tax time.
What’s the most important attribute of a good leader? While it’s difficult to pinpoint one single overarching attribute, exceptional leaders usually have love. One of the main reasons for this is that love brings out the best in people, no matter the situation.
So if you’re a leader looking to get the most out of the people you lead, then learn to love them. Here’s how you can lead with love.
Always be encouraging – whenever someone is struggling, give him or her hope by offering encouragement. It might be the difference they need.
Show appreciation – make sure you show those you lead appreciation whenever possible. Let them know when they’ve done something good.
Be flexible and empathetic – set the expectations and be prepared to enforce them. But you should also be sensitive to others’ needs.
Listen – leaders who love know how to truly listen. They’re open to ideas and suggestions from those they lead. They aren’t afraid to keep learning and growing.
Teach, don’t criticize – people will make mistakes. No one is perfect. But rather than criticize, leaders who love take those moments to teach and train. That makes a huge difference in helping people learn from their mistakes and get better.
Mean what you say – it’s easy to pretend to care. But good leaders really do care about the people they lead. So when you ask someone how he or she is doing, make sure you mean it.
What’s the best part of tax season? When it ends, right? Well, for many taxpayers that might be the answer. But for millions, the fact that they get a large refund is probably what comes to mind. A big tax refund might seem like a great thing on the surface. Who doesn’t like to get a bunch of extra money?
The problem is, in most cases, that money is not really extra. The fact is it’s actually money you could’ve had at your disposal throughout the year. It’s money you could’ve used for several other things, including savings or investing.
Instead, that money goes to the government, which can then collect interest on it. That means you’re not collecting interest on it, or using it for anything else. Just think of how useful that extra money might be if you have an emergency come up during the year. It could make a huge difference in your overall financial picture.
If you’re refund is large, you would be smart to make some adjustments in order to reduce it. Start by checking your W-4 to make sure your withholding amount is accurate. You don’t want your employer to withhold too much, or too little.
Once you start seeing the extra money in your paycheck, you shouldn’t go out and blow it. It’s smart to put that extra cash into your savings. That will give you a safety net in case of an emergency, or in case you haven’t withheld enough.
It’s safe to say this could be one of the most interesting tax filing seasons in the last several decades. This is the first year of filing taxes under the new Tax Cut and Jobs Act. And that means there are significant changes you need to be aware of this tax season.
But first, the tax fling season begins January 28 and returns are due on April 15. The shutdown may or may not cause a delay in getting your refund. But it will definitely reduce your chances of getting assistance from the IRS. So what about those big changes? Here’s what you need to know.
There is no more personal exemption. That means you will no longer be able to claim a personal exemption of $4,050 for you and each of your dependents.
You can now get a $500 temporary credit for non-child dependents, such as adult children with disabilities and elderly parents.
You can no longer claim a deduction on all your state and local taxes (SALT). You can claim up to $10,000, but anything over that amount in no longer deductible.
Your mortgage interest is still deductible, but only up to $750,000 of your mortgage debt. The amount was lowered from $1 million last year. But this does not affect homes already purchased before 2018.
Whether or not you’re following the government shutdown, eventually it could affect you. For most people, life has continued as normal since the federal government decided to shut down late last year.
If you don’t work for the government, then chances are you haven’t noticed any significant changes to your daily routine. However, the 2019 tax season officially kicked off on January 28. And the shutdown could start to affect just about everyone at that time.
While the IRS has said it will begin accepting tax returns on the 28, that doesn’t mean taxpayers will get their refunds on time. Much of the IRS staff will not be working during the shutdown. An IRS spokesperson would not say how long the delay would need to last for tax refunds to be delayed.
However, for the millions of taxpayers that file early, a delay is very likely. But that doesn’t mean you should wait to file. Even if you choose to wait, it’s still a good idea to get everything ready to file your return. If refunds do take longer to be processed, by filing early, your refund will be one of the first ones processed when the IRS does start issuing refunds.
What would you do if you won $1.5 billion dollars? That’s exactly what happened for one ultra lucky individual in October. The life of the winner of the largest single ticket jackpot in history will never be the same. What about his or her taxes? We all know the amount of a lottery jackpot is never the actual take-home amount.
Even if the winner chooses the annual payment, he or she will still have to give a large portion to the IRS. If the person selects the lump sum he or she will get $877 million upfront. Not bad.
But then come the taxes. So how will the Tax Cut and Jobs Act affect the winner’s actual take-home amount? For starters, before the new law the highest tax rate was 39.6 percent. Now it’s 37 percent. That’s a saving of about $23 million. On the other hand, the state and local income tax deduction is now limited to $10,000. Previously, there was no limit. That would cost the winner as much as $64 million.
However, the actual amount of that deduction would have been limited to about $35 million, meaning a federal tax bill of about $14 million. Thanks to the $23 million saved from the new lower 37 percent tax rate, the net gain would be $9 million.
The other law affecting the final take-home amount is the estate tax exemption, which increased to $11.18 million for each individual. This would save a married couple about $4.5 million in taxes. So, if you add up the numbers, the new tax law will likely save the winner about $13.5 million, when compared to the old law.
No matter how you slice it, this ultra lucky lotto winner is now a very wealthy individual.
The calendar year has not yet changed, which means newly elected members of the House and Senate have yet to officially take their seats in the Nation’s Capitol. However, House democrats are already busy making changes in preparation for the new year.
And one of their top priorities is raising taxes. Newly elected democrats are taking aim at the tax Cut and Jobs Act. And they’ve taken a big first step in their goal to raise taxes, especially on the wealthy.
The Washington Post reported that the incoming chairman of the House Rules Committee, Rep. Jim McGovern (D., Mass.), confirmed last week that he would not honor the three-fifths super majority requirement to raise income taxes.
That decision will overturn the previous rule put in place by the outgoing Speaker of the House, Paul Ryan (R., Wis.). That rule made it impossible to raise income tax without a three-fifths majority approval.
The change could make it easier for House democrats to pass new proposals ultimately designed to raise taxes on the wealthy. The decision comes after pressure from newer, more progressive democrats, who want to create more revenue to fund things like universal health care and free college tuition.
Republicans were quick to attack the announcement, saying democrats could use the change to raise taxes on the middle class.
Although tax laws have certainly changed under the Tax Cut and Jobs Act, there are still numerous tax credits available. Some of these credits are obvious. But there are several you might be overlooking.
For example, did you hire or use a nanny throughout the year? Many high net worth individuals with kids employ nannies. If you’re one of them, then you could be eligible for the child and dependent care tax credit. With this credit you could qualify for as much as $1,050 for a child younger than 13. If you have more than one child, that number rises to $2,100.
However, be aware, if you’re hoping to qualify for this credit then everything has to be “on the level.” In other words, you must pay your nanny legally, as an employee, and remit the necessary employment taxes. If you’re paying your nanny under the table, then you won’t be able to qualify for this credit.
In order to be in compliance with the IRS, and be eligible to claim this credit, there are a few things you must do. You need to fill out a Form I-9, a Form W-4 and a Schedule H.
A Form I-9 is used to verify the identity and employment authorization of your nanny. A Form W-4 allows you to withhold federal income from your nanny. And a Schedule H shows how much you paid your nanny. It also shows how much you spent in applicable Medicare and social security taxes, and unemployment.
Once you have everything in order, you will likely qualify for the credit.