Why You DON’T Want a Large Income Tax Refund

You’re probably wondering, “Why wouldn’t I want a large tax refund?”  Short Answer: You’ll have more cash in your wallet all year instead.,.. Consider this… Most people don’t want to give the government an interest free loan for more than a year. They’re holding your money hostage while you may be cutting corners to cover all your expenses. You are not in any way required or obligated to overpay your taxes every year, so why put yourself at a disadvantage unnecessarily? Large Tax Refund Cases Over the past 30 years I have seen a few instances where taxpayers need to have a large refund. It comes down to one factor –… Read More

Continue Reading

New 2018 Tax Law Standard Deductions and Itemized Deductions Guide

Did You Know??? Itemized Deductions are NOT Just For Homeowners with Mortgages. For 2018 tax returns Standard Deductions have increased substantially. The biggest question individuals have when preparing their tax returns is whether to take the Standard Deduction or claim the mysterious Itemized Deductions on the IRS form Schedule A. Here’s the info that can help you save you the most tax dollars, taking the higher of the standard or itemized deductions.. :First, identify your Standard Deduction based on the chart below, taken from the IRS Publication 501.   Table 6. New Standard Deductions for 2018 Tax Returns If your filing status is … Your standard deduction is… Single or Married filing… Read More

Continue Reading

Tax Implications of Divorce Property Transfers

When property and financial assets are divided in divorce, certain assets or portions thereof are transferred from one spouse to the other. The most common are the marital home, financial accounts and jewelry. During the marriage, such transfers are considered to be gifts of a non-taxable nature. Transfers for purposes of divorce are subject to specific regulations in order to maintain the same non-taxable status. As per the Internal Revenue Service Publication 504, Divorced or Separated Individuals , the following are required:   Transfer Between Spouses Generally, no gain or loss is recognized on a transfer of property from you to (or in trust for the benefit of): Your spouse,… Read More

Continue Reading

Estimated Tax Payments – The Real Deal

What Are Estimated Tax Payments? Some people don’t have to even think about what estimated payments are all about. They have their federal and state income taxes withheld by their employers, retirement payouts, and even Social Security benefits. However there are many who have no withholdings and face an excessive tax balance at the end of the year when they file their tax returns. In addition to self-employed folks, this occurs when people have income from investments, such as bank and bond interest, sales of stocks, and rental income to name a few. Many retirees and senior citizens make estimated tax payments. The Internal Revenue Service is a “pay as… Read More

Continue Reading

Four Tax Considerations For Divorcing Couples

Tax season is upon us, and many divorcing couples need to think about what to do now, and what they should know for the future. 1. Consider filing a joint tax return during your divorce. If you are married there are two choices – married filing jointly or married filing separately. However if your spouse is a bit “aggressive” with his or her deductions and you sign that return, you will also be liable for any future tax balances and penalties, so be cautious.  When filing separately the same income is subject to a higher tax, which is a penalty of sorts. Also certain deductions are disallowed. In the case… Read More

Continue Reading

Additional Refunds With Amended Tax Returns

Did you know that once you file a tax return you have more time to claim additional refunds by filing an amended tax return? You may not have received documentation of a deduction by the filing deadline, or maybe you didn’t realize there was a deduction you were entitled to that you didn’t claim. Either way, there is a remedy… and in addition to the correction reimbursement, the IRS will pay you interest on any payment beyond June 1st after that particular tax return was due.  When Should I File Amended Tax Returns? This is how “THEY” explain it: “Generally, for a credit or refund, you must file Form 1040X… Read More

Continue Reading

Tax Filing Status During Divorce

Question: If we do not use the married filing jointly filing status before the divorce, what are the tax ramifications? Whenever possible it is typically advantageous to file a joint tax return. This generally insures savings for you both. For each filing status the Internal Revenue Service applies tax rates from varied charts. The alternative, married filing separately, has a much higher tax rate. For couples who can not tolerate being together in the same room to have a joint tax return prepared, an alternative is to agree on one tax preparer and separate appointments. Is Your Tax Filing Status Situation An Exception? Having comparison returns prepared with the filing… Read More

Continue Reading