Everyone wants to pay less taxes, which leaves you with two options, make less money or increase your tax deductions and tax credits. The two parts of the tax code often confuse people, but a deduction essentially reduces your taxable income (the amount subject to tax), reducing your tax by your marginal rate * the deduction, and a tax credit reduces your taxes owed by the dollar figure.

Tax Deductions and Credits Put Money in Your Pockets

From itemized deductions for mortgages, payroll, and charitable giving, to energy efficiency, hybrid car, and child related tax credits the interaction of these tax rules with your financial planning is an important tool for tax minimization. What do you have to set aside, what is worth tracking? How do we use the tax code to our advantage? Congress goes through a cycle, where every few decades they engage in “tax reform” – eliminating a slew of these “tax code expenditures,” and then immediately go back to adding them back to the tax code.

The difference between deductions and credits is important for tax planning. For example, if you are at a 24% marginal tax credit, a $1,000 tax deduction is worth $240 in less taxes owed, while a $1,000 tax credit is worth $1,000 in less taxes owed. In addition, with the large standard deduction, the first $28,800 ($14,400 for singles) of itemized deductions “don’t save you money” because you can get it with the standard deduction. The increased standard deduction drastically changed tax planning for middle class families.

Because of the interaction of the Alternative Minimum Tax (AMT), standard deduction, stimulus payment phase ours, and tax code changes, it is not always obvious what the impact of a decision is. One of our most common questions we get midyear from clients contemplating a large investment or purchase will be the tax implications of it. To avoid the dreaded “it depends” non answer, it’s important to have a holistic understanding of your financial picture to understand how they really play together.

Tax Planning Strategies

By |2022-05-20T14:00:13-04:00May 20th, 2022|Categories: Quickies with Bette|Tags: , , , , , |

Today I'm going to tell you what tax planning is and why you need to tax plan if you want to save money on your taxes. The truth is when a client comes to me at the end of the year and has not done any tax planning, there is very little that I can do to help them save money. To avoid this situation, I recommend tax planning to all my clients.

2022 Tax Filing Season Announcements

By |2022-01-13T19:28:20-05:00January 10th, 2022|Categories: Deadlines and Updates|Tags: , , , , |

The IRS announced that the 2022 Tax Filing Season begins on January 24th. This announcement means the IRS will begin accepting returns on January 24th for the 2021 tax year. I will review some of the key takeaways from the IRS press release since we are still navigating the pandemic, which has historically caused complications and confusion. 

Business Gift Tax Deductions

By |2021-12-22T13:54:50-05:00December 22nd, 2021|Categories: #TaxTipTuesday|Tags: , |

Christmas time is right around the corner, and as we all know, this means holiday music and gifts, lots of gifts. On today's #TaxTipTuesday, I want to explain what qualifies as a business gift, how much you can deduct from your taxes, and answer some of your frequently asked questions about business gifts. Let's get started!

Veteran Tax Credits & Deductions

By |2021-11-11T11:02:19-05:00November 11th, 2021|Categories: Quickies with Bette|Tags: , , , , |

Veteran's day 2021 is approaching. The complicated life of military personnel and their families doesn't get any less complex during tax season, so I figured I would try to uncomplicate it for you by sharing some of the unique tax rules that apply to active and retired military. I will also briefly touch on the work opportunity tax credit (WOTC) available as an incentive for employers looking to hire a qualified veteran. Let's get started. 

#VenmoMe is Tax Deductible

By |2021-08-19T18:54:48-04:00August 19th, 2021|Categories: Other Perspectives|Tags: , , |

We have all seen giveaways from brands; you might wonder why brands do this or how they can afford it. The truth is brands can do this because it is tax-deductible, meaning they get their money back when tax season rolls around. Brands also do this because it is excellent advertising; I mean, who doesn't like free stuff? This brings us to our topic: #VenmoMe.

Meals, Entertainment, & Tax-Deductions

By |2021-07-07T12:57:14-04:00July 7th, 2021|Categories: Quickies with Bette|Tags: , , , , , , , , |

Hey, guys, happy Wednesday. We're going to hop on with a little business quickie about meals and entertainment because this is a tricky area for a lot of business owners. I know everyone wants to write off every meal possible that they ever have as a business expense and, unfortunately, can't always do that.

Your Start-Up Business Needs A CPA

By |2021-06-29T13:20:20-04:00June 29th, 2021|Categories: Quickies with Bette|Tags: , , , , , , , , , |

Hi, I'm Bette Hochberger, CPA CGMA, and on today's Business Quickie, we're going to talk about six reasons why your startup needs a CPA. Now, I can tell you all sorts of horror stories, and I'm sure you find anyone who started a business. They can also probably tell you many horror stories about not having the right professionals on board, not having an attorney, not having a CPA, all these things. So, if you think hiring a CPA is not worth the investment in your business; here are the six reasons why you should.

Adoption Tax Credit

By |2021-06-03T13:47:23-04:00June 3rd, 2021|Categories: #TaxTipTuesday|Tags: , , , , , , |

To kick off Pride Month, we're bringing you a special tax tip Tuesday. On this one, we are going to go over the adoption credit. Now, obviously, the adoption credit applies to anyone who adopts a child. It is not strictly for the LGBTQIA+ community. It applies to everyone, but the LGBTQIA+ community does tend to make good use of this, so I wanted to do a high-level overview of the credit.

Retirement Planning – Seth Bassoff

By |2021-05-14T11:57:21-04:00May 14th, 2021|Categories: #FinanceFriday|Tags: , , , , , , |

Retirement planning can seem boring, but when you have our #FinanceFriday guest Seth Bassoff CEPA®, APMA®, CRPS®, CRPC®, RFC® on your side, you can do some very cool things. Come check us out on this #FinanceFriday video.

Biden’s $1.8 Trillion Plan & The IRS

By |2021-05-03T22:02:54-04:00April 30th, 2021|Categories: Other Perspectives|Tags: , , , |

President Biden has proposed a new  $1.8 trillion American Families Plan due to the devastating effect that the Covid-19 pandemic has had on American families. To most, this seems to be an excellent thing.

Stimulus Check FAQs

By |2021-04-05T13:00:46-04:00March 31st, 2021|Categories: Quickies with Bette|Tags: , , , |

Stimulus checks can be a source of relief and stress. If you fall into the ladder position, I'm here for you. Hi, I'm Bette Hochberger, CPA CGMA, and I want to thank you all for reaching out to me with questions regarding your stimulus checks. I'm flattered at how many people reached out to us, but it's too many for me to call you each back, so I wanted to get you an answer as soon as possible. These are the main questions we've been receiving.

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