Learning Center for Tax and Financial Insights

Article Summary:Social Security AdministrationContractors Internal Revenue ServiceU.S. Postal ServiceWithholding & Estimated Tax PaymentsHealth Insurance MarketplaceThis is the time of year for many couples to tie the knot. When you marry, here are some post-marriage tips to help you avoid stress at tax time. 1. Notify the Social Security Administration − Report any name change to the Social Security Administration so that your name and SSN will match when filing your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security Card at your local SSA office. The form is available on SSA’s Web site, by calling 800-772-1213, or at local offices. Your income tax refund may be delayed if it is discovered your name and SSN don’t match at the time your return is filed. 2. Notify Those Paying You as a Contractor – If you are a self-employed sole proprietor filing your business income and expenses on a Schedule C, and you have a different name now that you are married, notify anyone who has been issuing you a Form 1099-NEC under your Social Security number about the name change. This will prevent a mismatch with the IRS.3. Notify the IRS - If you have a new address, you should notify the IRS by sending in a completed Form 8822, Change of Address. If your state has an income tax, also notify the appropriate tax agency.

You’ve just gotten your college diploma. Congratulations!Graduating is an enormous accomplishment well worth celebrating, and with the added complication of the global pandemic, your experience was more challenging than most. But now that the last parties are over and you’ve packed up your dorm room or apartment, it’s time to get ready for the next phase of your life: a full-time, professional job. The job market is hot, so finding a position with real potential is highly probable, but it’s important that you know what to do once you start in your new position. We’ve assembled some invaluable advice – both financial and professional — to help you in your journey.Financial Advice FirstYou’ve been managing money for yourself for the last few years, but there’s a big difference between working with the money you’ve earned from part-time jobs or internships (or you’ve been gifted from a budget provided by your parents) and knowing how to manage a weekly salary – especially if you’re making a significant amount. You may be tempted to skip returning to your parents’ home, to rent an apartment and buy a car and some work clothes and begin making your way entirely on your own, but that’s not always the smartest thing for you to do financially. Consider the following tips for money management:As much as you may want to live independently, if you can live with your family long enough to give yourself a bit of savings, you’ll be better off in the long run. It will help you to afford the first and last month’s rents that landlords require, help pay for furniture and other essentials, and let you start paying down any loans that you may have.Your company will likely offer you a selection of benefits, and the way that you approach these can make a significant difference. If you are offered a 401(k), take advantage of it, and as much as you’d like to hold onto some of your cash, you should always contribute at least as much as your employer is willing to match. Failing to do so is literally giving away free money for your retirement. You should also think carefully about the health insurance that you’re offered. Keep in mind that you are eligible to remain on your parents’ policy until you are 26, so compare the costs and benefits before signing up.Consider opening a retirement fund that is separate and apart from the 401(k). Retirement may seem like a lifetime away, but getting yourself into the habit of depositing into a Roth IRA is a smart thing to do. The money goes in after-tax and can be taken out when you retire tax-free. You can put away as much as $6,000 per year.If you’ve been using your parents' credit cards to pay for things and don’t have any loans, then you also don’t have a credit history – and you need one. Take out a credit card in your own name and make sure that you pay them off every month. Take care to pay every bill in full on time.Learn to keep a budget. Now that you have a predictable salary and take-home pay, it’s time to sit down, write down your total monthly net income and total monthly expenditures on necessities like groceries, rent, utilities, etc., and figure out how much you should be spending, how much you should be saving, how much should go to paying off debts – and stick to it!

Article Highlights: Americans Living and Working AbroadExtension RequestsReport of Foreign Bank and Financial Accounts (FBAR)Statement of Foreign Financial AssetsEstimated Tax PaymentsEstimated Safe HarborsJune 15 is the due date both for Americans living and working outside the U.S. to file their 2021 federal income tax returns and for the second estimated tax payment for 2022. Here are some important details for both. Americans Living and Working Abroad - U.S. citizens and resident aliens (i.e., green card holders), and those with dual citizenship, living and working outside the U.S. must file their 2021 federal income tax returns by June 15. A taxpayer qualifies for the June 15 filing deadline if both their tax home and residence are outside the U.S. and Puerto Rico, or they were serving in the military outside the U.S. and Puerto Rico on the regular due date of their return. A statement should be included with the return that indicates which of the two situations applies. Taxpayers who can't meet the June 15 deadline can request an extension of time to file giving them until October 17 to file and avoid the late filing penalties. Taxpayers should file their extension requests electronically to avoid arguments with the IRS over whether the extension was filed on time. The other option is to paper file for an extension using Form 4868, checking box 8, that you are “out of the country.” Be aware the extension – whether filed electronically or on paper – is only for filing and not an extension to pay your tax liability. To be valid the extension must include a reasonable estimate of your tax liability and payment to avoid late payment penalties. Please contact this office for assistance in completing and filing an extension.U.S. Citizens Living Abroad May Also Need to File an FBAR - Generally, U.S. citizens and resident aliens with a foreign bank or financial account need to file Form 114, Report of Foreign Bank and Financial Accounts (FBAR). This reporting requirement is separate from, and in addition to, any reporting required either on Form 1040, Schedule B or Form 8938. The FBAR isn't filed with the IRS but is filed electronically using the Bank Secrecy Act (BSA) filing system.Taxpayers need to file an FBAR if they had an interest in, or signature or other authority over one or more foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2021. Because of this low threshold, taxpayers with any foreign assets should check to see if the FBAR reporting requirement applies to them as the penalties for failure to file an FBAR are extreme. Although the FBAR due date in 2022 was April 18, FinCEN grants an automatic extension, to October 17, to anyone who missed that original deadline.In addition to filing an FBAR, certain taxpayers may also need to file Form 8938, Statement of Foreign Financial Assets. Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds. The 8938 is attached to the taxpayer’s individual income tax return, but if the taxpayer isn’t required to file an income tax return, then the 8938 isn’t required either.Estimated Tax Payments – The next 2022 estimated tax payment is also due on June 15th. Unlike employees, who have income, Social Security, and Medicare taxes withheld from their wages, self-employed individuals must prepay their taxes by making quarterly estimated tax payments. These are referred to as estimated tax payments because the self-employed individual must estimate his or her net earnings for the year and pay taxes on a quarterly basis according to that estimate. Failure to do so will result in interest penalties.The self-employed are not the only ones who are subject to estimated tax requirements, which also apply to anyone who has income that is not subject to withholding taxes and even to those whose taxes are not sufficiently withheld. Thus, if you have income from stock sales, property sales, investments, alimony from a pre-2019 divorce, partnerships, S-corporations, inherited pension plans, or other sources that are not subject to withholding, you may also be required to pay either estimated taxes or an underpayment penalty. Others subject to making estimated payments are individuals who must pay special taxes such as the 3.8% tax on net investment income or the employment tax on household employees.

The U.S. tax code provides businesses an opportunity to let their employees donate their unused vacation, sick, or personal leave to qualified charities for Ukrainian Relief. If you or your employers are considering this, there are some tax implications that you should be aware of.

There's an old saying in life that reminds us "the only things that are certain are death and taxes." It seems that, occasionally, some celebrities seem to forget that second part.It's true. Just because you've got the number one movie at the box office, or just because you've sold millions of albums over the course of your career, doesn't mean that Uncle Sam isn't paying attention. In fact, the IRS seems to be particularly interested in high net worth individuals like this because they A) have significant public profiles, and B) tend to bring in huge sums of money every year. It doesn't take a genius to figure out that they're watching those returns closely.All told, there are a number of notable instances where celebrities ran into issues with their taxes - all of which we can learn a little from.Celebrities and Taxes: A Match Made in HeavenOne notable instance of a celebrity running into problems with the IRS takes the form of the late legendary comedian George Carlin.During the 80s, Carlin's career was at a crossroads. He was in the process of transitioning from one type of comedy to the next and was struggling. It was also around this time that he stopped filing taxes - according to a recent HBO documentary on the subject, he failed to do so for three years in a row. It wasn't long before the IRS came knocking at the door, demanding what they were owed. In the documentary, it is revealed that they even threatened to take his house away multiple times. Luckily, he was able to rectify the situation but it was certainly still scary for the funnyman.Speaking of the 1980s, those of us who are old enough will remember that it was a period of time during which fitness guru Richard Simmons seemed to be... well, everywhere. He was on TV. He was in magazines. He couldn't have been more popular.Flash forward to the 2000s and it was reported that he owed about $24,000 in back taxes between 2007 and 2015. It got so bad that the IRS even placed a tax lien on not only his businesses, but also his properties as well.Next up we have O.J. Simpson, the athlete who is famous for his incredible football career (... and that other thing, but let's not get into that right now). At one point, it was revealed that Simpson hadn't actually paid any taxes since 2007 - and the amount that he owed totaled nearly $180,000. There's no actual word on whether the money was paid, but given the plethora of other legal issues that Simpson was/is facing, it's safe to say that this one may not be high on his list of priorities.Film actor Wesley Snipes - he of "Blade" and "Money Train" fame - also famously had a run-in with the IRS several years ago. This is kind of a weird one - Snipes claimed at the time that, because of an organization he belonged to, he didn't actually have to pay taxes at all. It seems that he thought he'd discovered some kind of loophole in the system that he was ready and willing to take advantage of.

Article Highlights:Mid-year IncreaseItems Included in the Optional Mileage RateWhat Can Be Deducted in Addition to the Optional Mileage RateSwitching Methods With gas prices soaring it has been expected the IRS would increase the mileage rate that business owners can deduct for vehicle use instead of keeping a record of actual expenses. Sure enough, the IRS recently announced a 4-cent increase in the optional mileage rate for the last half of 2022. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents for the last 6 months of 2022, also up 4 cents from the rate effective at the start of 2022. These new rates become effective July 1, 2022. Optional Mileage Rate for 2022Purpose1/1 through 6/30/227/1 through 12/31/22 Business58.5¢62.5¢Medical/Moving18¢22¢Charitable14¢14¢The standard mileage rate for businesses is based on a study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. The rate for using an automobile while performing services for a charitable organization is statutorily set and has been 14 cents for over 20 years.