Highlights of the article:- In-Year Planning
Preventing Disappointing Surprises
Occurrences That Have Tax Repercussions
All too frequently, taxpayers put off thinking about their taxes until after the end
of the tax year and lose out on chances that might lower their tax bill or provide
them with financial benefits. Planning taxes is normally performed in the middle
of the year. The following are some situations that might have an influence on
your tax return; you may need to take action to minimize their effects and prevent
unpleasant shocks that you can no longer address. Here are a few situations that
may have tax repercussions. Have you done (or plan to do):
• Become Widowed, Married, or Divorced?
• Has your spouse started a new job or changed jobs?
• Have a Significant Rise or fall in Income?
• Made a Large Profit on the Sale of Stocks or Bonds?
• Rent or Sell a Property?
• Launch, Buy, or Sell a Business?
• Purchase or Sell a Home?
• Retiring This Year?
• Reach 72 Years Old This Year?
• Should You Refinance Your House or Get a Second Mortgage This Year?
• Will You Receive a Sizeable Inheritance This Year?
• Utilize Tax-Advantaged Retirement Savings?
• Are You Buying Any Major Equipment for Your Business?
• Trade in or get rid of the old business vehicle after purchasing a new one?
• How Properly Record Your Cash and Non-Cash Donations to Charities?
• Maintain Your Schedule of Estimated Tax Payments?
• Have You Ever Made an Unexpected Withdrawal from a Pension or IRA?
• Should You Buy an Electric Vehicle or Install a Solar Electric System in Your Home?
• Employ Veterans or Other People in Your Company Who Might Be Eligible for the Work Opportunity Tax Credit?
• Buy and Sell Crypto currencies?
• Amass Costs When Adopting a Child?
• Commence obtaining Social Security benefits?
• Exercise stock options granted to employees?
• Will You Start Operating a Part of Your Home This Year?
• Trade real estate that you own for investment or use in your trade or business?
• Create a Retirement Plan for Your Self-Employed Company?
• Did You Give More Than $16,000 to One Person This Year?
Of course, there are many more problems that have an impact on taxes. It may be appropriate to communicate with this office—preferably before the event—and most definitely before the end of the year if you expect or have already experienced any of the aforementioned occurrences’ or situations.
Highlights of the article:-
Reliant on Another
Recipients of Pell Grants
Reduced Monthly Payment
Income from Debt Cancellation
President Biden unveiled a three-pronged strategy to address student loan debt on August 24. Among other things, this strategy includes providing $20,000 in loan relief to borrowers with Department of Education loans whose individual income is less than $125,000 ($250,000 for married couples) and who received a Pell Grant. Borrowers who fulfil these income requirements but did not earn a Pell Grant during their time in college are eligible for loan reduction of up to $10,000. Loans held by current students may be forgiven under this programmed. Dependents of Another: Students who are dependent on a loan will be eligible for assistance based on their parents income rather than their own. Who Will Benefit? - Since the forgiveness is aimed for lower income families, almost every Pell Grant applicant comes from a household that earns less than $60,000 a year, according to a White House Fact Sheet. Based on that, 93% or more of Pell Grant recipients would be eligible for the $20,000 forgiveness because their income is less than $60,000. According to the Department of Education, roughly 90% of the funds allocated for debt relief will go to borrowers who are no longer enrolled in college and make less than $75,000. Pause in Repayments: As part of the COVID relief, payments were previously put on hold. One last extension of the suspension has been made to December 31, 2022. Borrowers must prepare to start making payments again in January 2023. Reduced Monthly Payments - For undergraduate loans, the initiative would also reduce monthly payments by half. The Department of Education is putting forth a brand-new income-driven repayment strategy that shields more low-income borrowers from having to make any payments at all and caps monthly payments for undergraduate loans at 5% of a borrower's discretionary income—half the rate that borrowers currently have to pay under most current strategies. This translates into a reduction of more than $1,000 in the average yearly student loan payment for both present and prospective borrowers. Because the U.S. Department of Education already has access to income information, it is anticipated that close to 8 million borrowers will qualify for
automatic relief. If not, a borrower will be able to do so when the government releases a straightforward application in the upcoming weeks. Watch for further information. The amount of debt that is forgiven is often recognized as taxable income under the tax rules. The White House Fact Sheet doesn't touch on that subject. Call this office if you have any inquiries.