Income tax firms in Houston, Texas? Moving expense to take first job: Here’s an interesting dichotomy: Job-hunting expenses incurred while looking for your first job are not deductible, but moving expenses to get to that first job are. And you get this write-off even if you don’t itemize. If you moved more than 50 miles, you can deduct 23 cents per mile of the cost of getting yourself and your household goods to the new area, (plus parking fees and tolls) for driving your own vehicle. However, beginning in 2018, moving expenses are no longer deductible for federal taxes unless you are in the military and the move is due to military orders. Some states such as California continue to provide this tax benefit.
Meet With Your Tax Advisor: November is a good month to meet with a tax advisor, Powell says. They have finished their October tax filings and may have time in their schedule before the busy tax season starts after the first of the year. “If you sit down and do some math between now and the end of the year, you can make sure you are in a favorable tax bracket,” Barlin says. An advisor can help pinpoint strategies to reduce taxable income through retirement contributions or itemized deductions. That, in turn, may be key to ensuring households remain eligible for some income-based tax incentives such as student loan interest deductions. If you don’t regularly use a tax professional, Barlin says running numbers through tax software can be just as beneficial.
For most garnishments including child support, creditor garnishments, and student loans, Title III of the federal Consumer Credit Protection Act (CCPA) requires that the amount of pay garnished should be based on an employee’s “disposable earnings,” meaning the amount remaining after legally mandated deductions. Broadly speaking, disposable income is the employee’s total compensation, less mandatory deductions including federal, state, and local taxes; state unemployment insurance contributions; and Social Security taxes. This includes salaries, bonuses, and sales commissions, as well as earnings derived from retirement plans and pensions. Tips aren’t usually regarded as earnings for garnishment, but service charges are considered earnings. Find even more info at Bookkeeping Services Houston Tx.
Fund IRAs and SEPs to Allowable Limits: If you participate in an employer-sponsored individual 401(k) plan, 403(b) retirement plan, or other qualified retirement plan, the deadline for contributions is Dec. 31. However, you can still fund an IRA until April 15. If you’re younger than 50 and contributed less than $6,000 for the 2019 tax year, or you’re older than 50 and have contributed less than $7,000, you have until April 15, 2020, to invest money on a tax-sheltered basis for 2020. If some or all of your income comes from self-employment, you can set up a simplified employee pension (SEP) IRA up until the due date of your tax return, including extensions, and contribute up to 25% of your self-employment income. If you have the opportunity to choose between paying income taxes or funding your retirement, it should be an easy decision. While Roth IRA contributions are not deductible, IRA and SEP contributions are fully deductible depending upon your income, filing status, and participation in an employer plan. Income within a retirement plan – whether IRA, SEP, or 401(k) – is not taxed until you withdraw it.
Don’t make financial decisions based on potential tax breaks: The IRS offers a slew of tax credits and deductions that have the potential to reduce your tax liability. But if you’re spending money strictly for the tax break, you may end up losing money on the deal. For example, you can deduct charitable contributions you make throughout the year if you itemize your deductions and donate to qualified charitable organizations. But if you donate $1,000 solely to get a tax deduction, and don’t first ensure your contribution meets deduction requirements, you could be out $1,000 with no tax break to show for your donation.
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