Showing posts with label Naperville Tax Professional. Show all posts
Showing posts with label Naperville Tax Professional. Show all posts

Wednesday, October 7, 2020

Tax Preparation Deductions Under the TCJA

In the past, taxpayers were able to deduct fees and expenses related to preparing or having their tax returns professionally prepared, providing that they itemized their deductions. However, due to the recent changes to the Tax Cuts and Jobs Act (TCJA), most individuals are no longer able to claim this deduction.    

The key word there, though, is “most.” Some taxpayers may still be able to qualify.  


Self-Employed Taxpayers  

One group that may still be able to claim this deduction is the self-employed. If you work full or part-time on your own, you may qualify if you meet the following requirements:  

       You filed as a sole proprietor with a Schedule C

       You received income from a rental property and/or royalties, as reported on a Schedule E

       You were a farmer who filed a Schedule F  

Statutory Employees  

If you were classed as a statutory employee and filed or will file a Schedule C, you may also be eligible for this deduction.  

This applies to:  

       Drivers that distribute non-milk food and beverages or who pick up and/or deliver dry cleaning or laundry and who are paid on commission

       Life insurance sales professionals

       Full-time salespersons who do not have an alternate primary source of income.  

The Importance of Professional Tax Help  

If you fall into one of the categories described above, it may or may not be in your best interest to claim this deduction. There may be other ways for you to save money even without having this deduction, which, in most cases, is a fairly low deduction anyway.  

Furthermore, qualifying, even if you feel sure you meet the requirements, is more complex than it might sound. Thus, you should never just assume that you qualify without a careful and thorough understanding of the tax law and how it applies or does not apply to you.  

For this reason, if you have any doubt about whether or not you qualify for this or any other deduction, or if you have other questions or concerns, remember that it’s alway best to seek the help and expert advice that only a tax professional can provide.

Wednesday, September 9, 2020

Should You Pay for Professional Tax Preparation


So, you’re considering paying a professional to file your taxes for you in the next tax year. Obviously, this type of service doesn’t come for free, so you may also be wondering whether or not it’s really worth it. The answer, quite honestly, is yes! As long as you find a qualified preparer, hiring a professional could save you money, time, and stress.  



With that said, though, you’ll want to be careful not to overpay for your tax preparation services. After all, one of the main reasons to hire a professional in the first place is to spend less money!

How Tax Professionals Price Their Services

Different tax preparers come up with their pricing structures in different ways. Some, for example, will just charge a set fee for each form a person needs filed. Others will charge per item of data entry. Then, you have individuals who charge a value-based fee, an hourly rate, or a minimum fee and complexity fees if necessary.

In some cases, knowing how a preparer determines their pricing can give you a good idea of about how much you’ll be expected to pay for the service. So, don’t hesitate to ask how a preparer arrives at their rates.

Request Estimates When You Can

Some tax preparers are willing to offer estimates on their services, which is a lot simpler than you asking about their pricing structure and then trying to come up with an estimate of your own.

Bear in mind that you’ll likely have to provide pretty specific information in order to get these estimates. But, the nice thing is that, if you get several estimates, you can compare them in order to find the best deal.

Remember, though, you don’t always want to just jump on the lowest price. Ultimately, you want a preparer who is qualified and who makes you feel comfortable and confident about your return . . . even if that means you end up paying a little bit more for their services.

At the end of the day, it’s up to you to choose the right tax preparer. But, there’s certainly nothing wrong with trying to save some money in the process.

Wednesday, June 17, 2020

Here's Why You Need a Tax Professional


Many people file their own taxes. For some people, the whole process is relatively simple. Sure, it may be a bit annoying and a bit time consuming, but they don’t find it too stressful. Generally, these are people with some kind of tax background or who have very simple tax situations.  

If you’re not one of those people, though, you could probably benefit from some professional tax help. And, if you’re still on the fence about whether or not you need expert assistance, consider these big benefits.
Reduce the Risk of Errors
First things first, having a professional prepare your taxes greatly reduces your risk of submitting an error-filled return.
And, those errors, even simple ones, can often result in penalties that cost you money. Some experts even think that having errors on your return makes you more likely to be audited.
So, all in all, if you want a smooth, easy tax experience that’s not likely to have any big bumps or errors along the way, leave the work up to a pro.
Eliminate Stress During Difficult Times
When you lose someone you care about, taxes are probably the last thing on your mind. Unfortunately, though, they do have to be filed, and they often have to reflect what’s happened in some way.
You might, for example have to deal with tax implications related to a will or to funds left behind, or you may need to file taxes on the person’s income before and after death. All of this can be confusing and a lot to deal with when you’re grieving, which is why it’s best, especially during times like this, to leave the tough stuff up to a pro.
Learn How Best to File
Finally, if you’re unsure what your filing status should be, take this as a definite sign that you need some professional tax help.
Some single parents, for example, miss out on big benefits by filing as “single” rather than as “head of household.”
Then, you have people who are married and who don’t know whether filing jointly or separately would benefit them the most.
A tax professional can always weigh each option and help you to choose the best filing status for your return, setting you up for success from the start.

Tuesday, February 19, 2013

Get on Track with a Financial Checklist


Perform a self-audit to set yourself up for the year ahead.
By Michael Kaminer

Once you've successfully filed your taxes, keep the momentum going—now's the time to audit your spending, squeeze every bit out of your benefits and create a strategy for the future. These simple tasks will help improve your finances in the year ahead.

Take Stock of Your Expenses

Analyze your spending habits and recurring costs to find out where you can save.

 Review spending. Many credit cards (including American Express and Discover), banks and Websites (like Mint.com) offer free year-end summaries, sorted by spending category (travel, say). Seeing at a glance where you overspent—and where you successfully cut back—in the past year will help you plan for the future.

·         Lower your fees. Carefully examine your bank and credit-card statements. Because of new laws limiting what banks can earn on debit-card transactions, many financial institutions have created new fees such as "activity requirements," meaning you can be charged for not using your account. Check Bankrate.com to compare account fees. And be sure to include credit unions in your search—their fees tend to be lower than those of most banks.

·         Evaluate your insurance. When your policy changes, you find yourself in an empty nest or you face a sudden health issue, you might be over- or underinsured, or simply paying too much. End the year by reviewing your life, health and homeowners coverage to ensure that the benefits and premiums make sense. Get quotes from multiple companies at Insurance.com, and ask your current carrier if it can beat the best offer. Also inquire about discounts for bundling different kinds of coverage (such as property and auto insurance). At HealthCare.gov, find and compare health plans.

Maximize Your Benefits

You work hard, so be sure to take advantage of your workplace and insurance use-it-or-lose-it benefits throughout the calendar year. 

·         Plan time off. According to a Harris Interactive survey conducted in late 2011, 57% of Americans don't take all of their vacation time. If you have unused days, take them—you've earned them. If your job is too busy now, negotiate rolling them over.

·         Empty your FSA. Participants in flexible spending accounts lose, on average, $75 each year by not draining their account, says S. Fred Green, project manager for WageWorks, which administers employee benefits. If you have money left in an FSA, use it by year's end (some companies have a grace period through March 15) by stocking up on items such as contact lens solution and diabetes supplies, and seeing specialists with high co-pays (a chiropractor, say, and a therapist). Visit SaveSmartSpendHealthy.com for a list of eligible expenses.

Plan for the Year Ahead

Avoid financial surprises in 2012 by following this advice.

·         Autosave for an emergency. If your car breaks down, even a $500 cushion will make a difference. An excellent way to be prepared is to sock away cash regularly. Open an account that you can feed with automatic payments but can't easily withdraw from.

·         Create a plan and stick to it. Use the intelligence you've gleaned from your spending habits to craft a realistic budget. Whatever your financial challenge, you can find customized solutions and smart steps to managing your money at AllYou.com. Type in "build a foolproof budget" to get started.

·         Set goals. Has it been years since you last vacationed? Committing financial goals to paper is a great way to make them real. Give each goal a page, making it as detailed as possible, including how you plan to attain it. Review your goals regularly to make sure you're taking steps in the right direction.

Adapted from the Dec. 16, 2011 issue of All You. © 2012 Time Inc. All rights reserved.

The information contained herein represents the opinions of a third party and does not necessarily represent the opinions of Susan S. Lewis Ltd or Platinum Financial and are unaffiliated with any of the entities referenced above.

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Tuesday, December 4, 2012

Get Your College Grad Launched


Teach your child these important money lessons, and he’ll be on his way to a bright financial future. 
By Karen Cheney 

Parents of the Class of 2012: Your timing is impeccable. After the ugliest job market in decades, the outlook is improving, just as you’re sending your child out into the working world. Employers expect to hire 19% more recent college graduates this year than last, reports the National Association of Colleges and Employers. Not only that, the average starting salary is up 6%, to $50,500. Of course, as good as this news is, you know it doesn’t guarantee that your child is on a straight path to Happily Ever After. Recent grads face many financial hurdles besides the obvious one of landing a job (which may still take months). Kids now come out of college with an average of $24,000 in student debt, according to The Project on Student Debt. And most have little experience budgeting, unless you count making sure that there’s beer money for Friday night. No wonder a recent study for American Express found that 57% of twentysomethings are still financially dependent on Mom and Dad. Clearly, your days of coaching aren’t over yet. So offer your child the advice that follows—worth more in the long run than any handout.
 

Help With Budgeting
For the first time, Junior will have real income—and real bills. “Your kid may think $40,000 is a lot of money, but things add up, like the rent and taxes he never paid before,” says Ramit Sethi, the 28-year-old author of I Will Teach You to Be Rich. Rather than lecture about balancing a checkbook—and seeing the eyes roll—encourage your child to join Mint.com, a trendy budgeting tool aimed at Gens X and Y. The site, also available as a mobile app for your hyperconnected offspring, uploads transactions from a checking account and automatically tracks spending in various categories, like restaurants and shopping. It even alerts users when categories near a threshold that they’ve set.
 

Make Debt Bearable
Imagine being 21, on your own for the first time and living under the cloud of $20,000 in student loans. Stressful, right? Suggest moves that might ease your child’s anxiety: If he’s in a low-paying job, he may qualify for income-based repayment (ibrinfo.org), which caps the monthly nut at 15% of discretionary income. Not an option? Consolidating loans and stretching out the term will reduce the monthly payment. For example, extending unsubsidized Stafford Loans from 10 to 20 years drops the tab by a third. The downside: Interest over the life of the loan more than doubles, says Mark Kantrowitz of FinAid.org. So nudge your kid into some long-term thinking. Does he want to be paying student loans into his forties? (To avoid that, he could pay extra as his salary rises.) Or can he handle a few years of tight living until he’s making more money?
 

Begin Weaving a Safety Net
New grads don’t realize how quickly a crisis can upend their fragile budgets. Help your child see the light by asking how she’d pay for a new muffler if hers fell off the car tomorrow. Then introduce the idea of emergency savings. The ultimate goal is six months of expenses, but put that in dollar terms. Together, devise a plan to get there, open a savings account, and set up automatic transfers from checking, says Cincinnati financial planner John Evans. In a perfect world, your child lands a job with health insurance right away. But if that’s not the case, you can swoop in with an easy fix: Thanks to last year’s health-care laws, your child can stay on your employer’s plan until age 26, as long as she can’t get insurance through a job. And if you already have family coverage, adding one more may not cost you anything extra. One caveat: If she isn’t on the plan now, you may have to wait until open enrollment. Get a short-term policy—via gradmed.com or ehealthinsurance.com—in the meantime.
 

Put Retirement on the Radar
Good luck getting your grad to care about retirement, says Sethi. That’s at least 40 years off, and if he’s saving at all, it’ll be for something fun, like a trip to Thailand. Instead, appeal to his fantasy of getting rich. Note that stashing a mere $99 in a 401(k) biweekly would make him a millionaire in 40 years, assuming a 50% match and a hypothetical 8% average annual return. (You can get him to bump up contributions later.) [Note: The return shown is for illustrative purposes only and is not intended to predict the return of any investment, which will fluctuate. Investing involves risk, including the risk of loss. Withdrawals of before-tax contributions and of earnings on any contributions will be subject to income tax, and withdrawals made before age 59½ may be subject to an additional 10% penalty.] Up the ante by offering to match his contributions in a Roth IRA, if you can swing it, says Evans.
 

Know When to Step In
Never subsidize your child if it means shortchanging your own goals, warns Denver-area financial planner DeDe Jones. Even if you can afford to give money, do so with caution. “The more support provided, the longer the dependency period tends to be,” she says. You might first help your child see ways to cut costs, like moving home temporarily. Rather give cash? Follow Jones’s rules: Help only with critical things, like food or health care. Set expectations up front regarding the time frame and amount of aid. Finally, give your kid just enough to help him get by but not enough to make him relax. The goal is to get him off your books—not make him permanent.
 

This content is intended for informational purposes only and should not be construed as advice. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Always consult a Naperville tax professional regarding your specific legal or tax situation. 

Adapted from the June 2011 issue of Money. © 2011 Time Inc. All rights reserved. 

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