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Make 2020 Your Year to Save Big
Personal Finance
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To stay afloat during tough times, financial experts recommend that you keep three to six months’ expenses in a savings account. But, if you are in the majority, you likely only have less than $1,000 in your savings account at any given time. Thankfully, 2020 is here to give you a chance to start anew and get your savings in check. All you have to do is follow the tips below to start building a healthy savings fund and boost the health of your finances. Build a Budget and Stick to It To halt excessive spending and channel your money into all the right areas, you need to build a budget and stick to it. Before you can do that, however, you need to see just where all your money is going. You can either use an app that connects to your accounts, like Mint, or simply write down all your spending for a month. With that information in hand, you can see where you can cut back your spending and divert the funds into savings instead. You can work your budget on paper or use a software program, such as You Need a Budget, to make every dollar count. As you build your budget, try to follow the 50/30/20 rule. By following this rule, you will assign 50% of your take-home income to necessities, 30% on what you want, and 20% for paying down debt and saving. You can tighten up these figures as you wish by pulling out of the “want” category for savings and debt repayment.To nix the urge to spend, consider taking a picture or screenshot of the item you want and waiting at least 24 hours. Or think about the hours it took to earn the money you will spend on that want. Before you know it, the urge to spend that money may dissipate, leaving more in your bank account at the end of the month. Switch to a High-Yield Savings Account The national interest rate for savings accounts has been steadily declining through the decades, landing at just 0.9% at this time. This does not even keep up with the inflation rate of 1.9%, putting you at a loss by the end of each year. To overcome this issue, you can switch to a high-yield savings account. With interest rates of 1.9% or higher, high-yield accounts keep your money growing at a decent rate. And since many are online, you cannot just head down to your bank for a withdrawal, helping keep your money in savings where it belongs. Go with Automatic Savings Deductions Automation makes everything easier and putting money in your savings is no exception. So, set up your account to automatically pull money from checking and put it into savings every month. You will hit your goal without even thinking about it and can adjust upward year to year to maximize your savings. Gradually Bump Up Retirement Savings Your high-yield savings account is not the only one in need of love. Your retirement account also needs attention each year to realize its full potential. You can maximize your retirement savings pain-free by increasing your contributions by just 1%. Then, make it a tradition to celebrate the new year with this smart move to keep bolstering your savings for the future. Additional Fun Ways to Save Big Once you have your retirement contributions and automatic deposits ticking away, you can continue to increase your savings in fun ways. Here are a few to try throughout the new year.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
