As you get ready for St Patrick’s Day you might be looking at your tax liability and wondering how next year your tax situation could be better. Tax Loss Harvesting within your investments could be beneficial for you if you hold mutual funds of stocks outside of a retirement plan. Tax Loss Harvesting involves selling your losers before the end of a tax year and replacing them. That way, you can harvest, or realize the losses on your taxes for the year.
Many brokerages offer year end reports for those that want to harvest their losses for tax reporting . Some have even gone so far as to offer automatic tax loss harvesting, selling your losers for you. While others are advising that making adjustments for tax purposes could run counter to your overall objectives and should be avoided if it detracts from what you set out to do with your portfolio.
You can preserve the long term goals of your portfolio by selling a losing asset prior to the end of the year and then repurchasing the same asset 30 days later. The 30 days is required to avoid having a wash sale. Consider the cost you need to pay to sell and repurchase compared to the tax advantage you might have. There’s more benefit if you are in a higher tax bracket and you have ordinary income to off-set.
You may assume that filing taxes has to be confusing, but that isn’t the case. With the use of Turbo Tax 2014, you can make the filing process less stressful.
If you have a mortgage, you may be considering utilizing the mortgage tax deduction when handling your taxes.
My Mortgage Docs to be Reviewed by an Expert (Photo credit: i am real estate photographer)
Many people attempt to lower their taxable income with the use of deductions and credits. In order to do this, you may want to claim your mortgage interest. Some homeowners plan to use the deduction and hope to benefit from it, so they choose not to pay off their mortgage. You’re likely wondering if it makes more sense to benefit from the savings or get rid of your debt altogether.
Many individuals find that they have enough money to pay off their debts and still have some savings for emergencies, but they’re not sure if they should make this move.
If you choose to pay off your mortgage so that you can be debt free, remember that tax credits are different than deductions. A credit will lower your taxable income and a deduction will lower the percentage of tax that you owe. If you don’t have a mortgage, you may pay more in taxes, but it may still be less than what you’d pay in interest if you had a loan. In this case, it doesn’t make sense to keep a mortgage in order to get the tax breaks.
Welcome to the December 17, 2013 edition of Tax Carnival Ecstasy. We start with some information on filing your taxes at the end of the year for the 2013 tax season. We have a TradeKing review from John Schmoll. And finally Mark Wang looks at assets that you can own that create passive income. Make sure to bookmark the carnival on social sites, like on Facebook, Tweet, and share with all your friends.
Bill Smith presents The TurboTax ItsDeductible App posted at 2010 Tax, saying, “Intuit Inc. announced on December 3, 2013 its new TurboTax ItsDeductible app, had become available for use on the iPhone.”
retirement
John Schmoll presents TradeKing Review: An Online Brokerage Worth Considering posted at Frugal Rules, saying, “Investing in the stock market is vital to building wealth and with the variety of options available of where to invest it can be confusing. Choosing a good brokerage that has good offering and low fees can be a great way to help grow your retirement portfolio and get your investing on the right foot.”
John Schmoll presents My Retirement Dream: to Keep Working! posted at Frugal Rules, saying, “Many want to follow the traditional retirement dream of working until 65 and then leaving the workforce completely. My retirement dream is different – to continue working. With frugal living and an aggressive investing strategy I believe many can pursue that dream and eventually work for yourself in retirement.”
taxes
Bill Smith presents IRS Forms To File Back Taxes posted at 2008 Taxes, saying, “Even if one is certain there are no mistakes in the forms when following federal tax procedures, a little shiver goes down a taxpayers spine at the very thought of a letter arriving from the IRS.”
Bill Smith presents Twitter IPO Vs. Facebook – FastSwings.com posted at FastSwings, saying, “At first glance, it would seem Twitter had no intentions of posting such a high IPO, but their current policy of growth says otherwise.”
Bill Smith presents Burger King Worldwide 2013 Third Quarter Results posted at FastSwings, saying, “Over the years, Burger King have been steadily going from strength to strength, so it comes as no surprise that the third quarter results are so impressive.”
Bill Smith presents Halliburton Profit Jumps 17% posted at FastSwings, saying, “Halliburton beat its earnings expectations with a seventeen percent profit jump this week, owing largely to its operations on a global scale”
Mark Wang presents Which assets produce passive income? posted at The Money MailThe Money Mail, saying, “When it comes to taxes, passive income assets can be completed as in how much they are taxed, how is the income treated and what accounts as income from tax purposes. Let us take a look at the various passive income producing assets in this article.”
Bill Smith presents How Secured Loans Can Help posted at Debt Consolidation, saying, “Consumers who need to rebuild their credit histories can take secured loans to start the process. A secured loan is an advance that a lender gives to a person who is willing to offer some type of collateral.”
That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
Having your own small business can be a rewarding experience. There are many aspects that can be difficult to accomplish on your own though. The most important issue that needs to be watched and completed correctly is taxes. Ten free tax tips offered by the Score business website can be helpful to any business owner.
Deductions are the most important thing to remember with your own business. Do not overlook those deductions that may not be the most obvious. Even trips that combine business and pleasure can be used as a write off, just make sure more than half is business related. If your business has employees, you need to worry about getting the correct taxes out of paychecks. Social security, medicare, state and federal taxes all must be withheld. Also unemployment taxes and employer matching are also important.
Keep all of the tax documents for at least seven years. Good record keeping could save money in the end. Business tax returns and licenses should be kept indefinitely though.
Make sure that all of the business tax deadlines are met. April 15 may be the personal deadline but it is not the same for business. All business owners know that estimated taxes are due four times a year. And they remember that sales taxes are due either monthly or quarterly or their bookkeeper keeps track of the dates for them. Employee taxes are even more difficult, they are due either weekly, monthly, or quarterly. This will decide manly on the size of the business. All of these different rules can affect the business greatly. Keep on top of your taxes to avoid tax penalties and interest charges from the IRS.
The Lifetime Learning Credit 2010 gives a tax credit of up to $2,000 dollars for types of higher learning. It differs from the American Opportunity Tax Credit because it can be claimed for part-time students and even for courses that don’t count towards a degree. This credit has been made available through 2011, 2012, and again this year. Eligible Expenses include Tuition but not room and board, Books, Equipment, and fees that may be required by the University. The Lifetime Earning Credit isn’t eligible with tuition paid fro by a scholarship, employer funds or a grant. Even if multiple students are eligible the Lifetime Learning Credit can only be claimed once a year per household. The tax credit reduces taxes by 20% for non qualified expenses for up to $10,000 dollars for a total of up to $2,000.
A construction project to repair and update the building façade at the Department of Education headquarters in 2002 resulted in the installation of structures at all of the entrances to protect employees and visitors from falling debris. ED redesigned these protective structures to promote the “No Child Left Behind Act”. The structures were temporary and were removed in 2008. Source: U.S. Department of Education, (Photo credit: Wikipedia)
You may claim the credit if you, a dependent or your spouse attends an eligible university or educational institution. even if only one class is taken, the tax credit may be claimed. All accredited colleges and universities are eligible as well as vocational schools as long as their also eligible for the US Department of Education’s Federal Student Aid Programs. Single head of households and qualifying widows earning between $53,000 and $63,000 have been phased out for 2013. If you’re married and filing jointly, the phase amount is $107,000 to $127,000. This amount is up from 2012’s phase out range of $52,000 to $62,000 for qualifying widows and single, head of household and a range of $104,000 to $124,000 for Married couples filing jointly.
Talk with your tax professional to have full knowledge on how Obamacare may affect your company or the company you work for. This should make employers take notice on how they are affected, since they are the primary tax targets.
Remember companies are up against the situation of uncontrollably increasing healthcare costs. Over 12 times the health costs have increased and we know that not many firms have not tripled their profits since 1999. I am wondering about those companies who have not done any redundancy, what will they do when they ponder over $24k per-employee increases.
Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)
The tax penalty for 3rd party health care is about $2,000 annually per full-time worker. This tax is a heavy duty to any tax payer and the more information we know, the more we discover. A full-time worker is anybody working 30 or more hours in a week and is subject to the penalty. Only the first 30 workers are exempt of the $2,000 tax penalty.
However, the law defines ‘expensive’ on the sliding scale as maybe not charging the worker more than 3.01% to 9.5% of his or her ‘family income.’ The household income range increases to 400% of the federal poverty level or $93,000 in a single year. The Act’s language basically says: you’re perhaps not going to know your family income, therefore the IRS will figure it out and send you a bill. The government estimates depict collecting about ten million in taxes here. It is obvious that avoiding charges has been nearly impossible. An employer can never estimate the earnings of employees and their family. Think, commissioned revenue representatives, incomes of couples, cutbacks, changing amounts of relationship, dependents, divorce and so much more.. it is quite impossible to estimate it all!
The ‘budget’ charge makes falling party protection and sending employees to private health dealings via HRA, an extremely attractive alternative for the government. Individual plans are generally 50% – 66% cheaper than group protection. Moreover, the HRA allows workers the freedom to have personal insurance that most readily useful fits their particular needs. The employers contribute some tax-free fixed number of dollars described by the employer.
A McKinsey study showed that of employers within the Obamacare tax regime absolutely engage 60-inch intend to drop group health coverage just after January 2014. Described Benefit Programs that get a handle on the cost of company health benefits and may replace group coverages as employees transfer from company to individual coverage. This can be performed with an arrangement from the Health Reimbursement (HRA).
Expense Surcharge – The relation of the expense surcharge to health has not been described, but it can use a 3.8% boost to dividends and capital gains for households making over $250,000. Small business are hitted by this disproportionately difficult as many small business owners fall in this type of expense, and this totally does not refer to people like Donald Trump.
‘Special Needs’ Tax – Caps the amount that may be preserved in Flexible Spending Accounts at $2500 per year. It is called the ‘Special Needs’ tax because it particularly hurts families with special needs like children. The tax is a pain as families spend proportionally more on medical care and tuition for special education.
Medical Spending Deductions Cap – The new tax increases the threshold for the amount on medics above which the spending might be taken from 7.5% of incomes to 10% of incomes. People with continuing medical expenses that fall under the ceiling can no longer apply for the discount, and people with higher expenses miss out on 2.5-4 of what they had previously been able to deduct.
The price employers should pay will definitely increase, with bonuses already squeezed by the old economy, companies it is likely that raises will not take place as the number of the damaged employees increases.
Medical Device Manufacturers Tax – A 2.3-liter excise tax on medical devices worth significantly more than $100. An excise tax is one that is required on a production of goods rather than on the intake of that object. It’s a ‘hidden’ tax since many people do not see the tax, only a growth in the prices. This has already hit the devices industry difficult and numerous companies have reported layoffs.
It is good to take count on the Obamacare tax as it affects a lot of the low income earners in the US…
