Effective January 1, 2020, California residents must obtain minimum essential health care coverage to avoid the new California individual health care mandate penalty enacted by SB 78 (Ch. 19-38). Generally speaking, an individual who fails to secure coverage will be subject to an annual penalty of $695 or more when they file their 2020 California [...]
Let's face it: A lot of personal finance advice seems to be incredibly repetitive and common sense — like paying off your debt ASAP and watching your discretionary spending when money is tight. Much money-saving advice also tends to be geared toward people who already have money and those more concerned about avoiding the taxman than bill [...]
Article Highlights: Itemized DeductionsAbove-the-Line DeductionsBusiness DeductionsAsset-Sale DeductionsRefundable CreditsNonrefundable CreditsCarryover CreditsBusiness Tax Credits People often say that an expense is “a tax write-off”; most everyone interprets this to mean that the expense will have a tax benefit. Generally, such a benefit takes the form of either a deduction or a credit; these benefits’ effects are quite [...]
Article Highlights: Required Minimum Distribution RequirementsComputing Required Minimum DistributionRoth IRAsStill Working ExceptionUnder-Distribution PenaltyIRA to Charity TransfersBeneficiaries If you are age 70-1/2 or older and have a traditional IRA, a 401(k), or a SEP IRA, the tax law requires you to take at least a minimum amount – referred to as the required minimum distribution (RMD) [...]
Article Highlights: Crowdfunding SitesGiftsCharitable GiftsBusiness VenturesSEC Registration Raising money through Internet crowdfunding sites for things such as school fundraisers, prompts questions about the taxability of the money raised. A number of sites host money-raising projects for fees ranging from 5 to 9%, including GoFundMe, Kickstarter, and Indiegogo. Each site specifies its own charges, limitations, and [...]
Let's face it: A lot of personal finance advice seems to be incredibly repetitive and common sense — like paying off your debt ASAP and watching your discretionary spending when money is tight. Much money-saving advice also tends to be geared toward people who already have money and those more concerned about avoiding the taxman than bill [...]
Article Highlights: Daycare Providers Simplified Food DeductionSpecial Rules for Business Use of the Provider’s HomeHome Sale Consequences Other ExpensesOther Daycare Provider IssuesDaycare User CreditEmployer Dependent Care Benefits Other Credit Criteria When discussing daycare for children so their parents can work, there are two primary areas of discussion: one from the viewpoint of the individual providing [...]
Article Highlights: Self-employed IndividualsEstimated TaxesSelf-Employment Tax Estimated Tax Safe Harbors1099-MISC and 1099-KOthers Subject to Self-employment Taxincome Not Subject to Self-employment Tax Self-employed individuals, unlike employees, don’t have someone withholding Social Security or Medicare (FICA) taxes along with pre-payments toward their federal (and state, where applicable) income tax from their wages during the year. They are [...]
Article Highlights: Purpose of the Earned Income Tax CreditQualifications Earned IncomeQualified ChildCredit Phaseout Computing the CreditInvestment Income LimitCombat Pay ElectionFraudSafeguards Any discussion of the earned income tax credit (EITC) needs to begin with a discussion of why Congress created it in the first place. It has a twofold purpose: first, as an incentive for people [...]
Article Highlights: Hobby LossesNot-for-Profit RulesDetermining Factors Trade or Business PresumptionHobby Tax ReportingSelf-Employment Tax Generally, when individuals have a hobby, they have it because they enjoy it and are not involved in their hobby with the goal of making money. In fact, most hobbies never make money or don’t even create any income, for that matter. [...]
