Monthly Archives: April 2019

Are you withholding enough from your taxes?

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In a prior article, we talk about how moonlighters (those with 1099s and a W2 job) might need to withhold more taxes from their W2 role to avoid owing for the 2019 year.

They aren’t the only ones. Retirees, those with dependents, and a handful of others will need to take a look at how much they’re withholding and adjust accordingly.

Basically, if you were surprised at how low your refund was this year, you might need to adjust your withholding amount. That means if your refund was low or you owed (and never did before) you need to prioritize your withholding amount.

The time to adjust is now, right after the April 15 tax preparation deadline. The longer you wait, the more likely it is that you’ll owe or get a low tax refund amount. This can mostly be done with the IRS withholding calculator, but you’ll likely need to talk to an accountant for proper withholding.

This is for two reasons:

  • State and local taxes aren’t calculated.
  • Without a full understanding of taxes, taxpayers may not fill out the calculator correctly.

Reach out to a tax professional. They’ll help you navigate the muddy waters that were caused by the latest tax bill change.

Additionally, the IRS is cooking up a new W4 form - the form you fill out at the beginning of conventional employment (where you’d receive a W2) or to adjust your withholding amount. It will be ready for the 2020 tax season and won’t affect this year’s taxes.

If you ended up owing in this year or had a small tax refund, reach out to us. We can help ensure you’re withholding enough.

How Moonlighters Can Get Enough Tax Money Withheld

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If you were left surprised (and maybe a little hurt) from your latest tax return and you work as both a W2 employee and have 1099 side gigs, this article is for you.

The Current State of the Side Hustle

The side hustle is a common part of our society today. The latest figures say that nearly 40 percent of Americans have a side job that brings in $8,200 or more each year.

People who work a side job are more likely to be millennials, apparently working more than one job is something that is less common as you age.

And while the extra money is nice, these side hustles make it that much more complicated to do your yearly taxes. If you make more than $600 at any job, that money is taxable.

That’s why its good to get a head start by adjusting your W2 withholdings to help cover the income from your side hustles. Otherwise, you’ll undoubtedly owe

How Do You Do This?

The recent tax law changes impacted many taxpayers, so the IRS created a withholding calculator.

It’s an easy-to-use tool, you just need to come prepared with the proper paperwork.

That includes:

  • Any and all recent pay stubs and invoices(make sure it includes the amount of federal taxes withheld for this year so far
  • A completed copy of your 2018 and 2017 returns

Then open the calculator and answer all the questions. You may not be happy with the amount of taxes you have taken out, but you’ll happier come tax time, so you won’t owe for all your hard work in 2019.

6 Tax Deductions That Went Extinct in 2018

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The Tax Cuts and Jobs Act of 2017 was called one of the largest tax overhauls in 30 years. It went into effect at the beginning of 2018, which means taxpayers are starting to feel the impact now. Some households will benefit from it, others will not. Here are some deductions that have been eliminated or reduced.

Moving Expenses
Unless you or a spouse is in the military and is currently on active duty, you won’t be able to take any deductions for moving. In the past, those who moved for a job and paid the moving cost could deduct most of their expenses.

Personal Deductions
Deductions for personal exemptions, which can be worth $4,050 for each exemption, were eliminated and replaced with a larger standard deduction and an expanded child tax credit.

Paying Alimony
If you’re paying alimony on a divorce finalized before December 31, 2019, then you can deduct those payments one last time.

Unreimbursed Job Expenses
This fell into the category of miscellaneous itemized deductions, an area that has been greatly reduced by the latest tax laws. It means that anything an employee pays for while on the job and doesn’t get reimbursed for, is not deductible.

State and Local Taxes
You used to be able to fully deduct any amount of state or local taxes. Now that cap is set at $10,000 meaning those with high state income and property taxes will get much less back.

Tax Preparation Fees
Tax preparation fee deductions were eliminated as part of the miscellaneous fees. This is will occur from 2018-2025. That means you cannot deduct payments to accountant, tax prep firms, or tax preparation software.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.