Tax season doesn't have to be a headache! This FAQ section is designed to answer your most common tax
questions and empower you with clear and concise information.
Whether you're filing for the first time, have a complex return, or simply want to understand deductions
and credits better, explore the topics below to gain valuable knowledge. Didn't find your specific question? No problem! Our
team of tax professionals is here to guide you. Contact us today here!
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common
and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or
business. An expense does not have to be indispensable to be considered necessary.
If you have a large capital gain this year from an investment, it may be advisable to hold onto the investment
until next year to put the gain into next year's taxes. You may also want to sell off any investments that you
have that are losing value at the moment to claim your losses.
The interest gained from state and local bonds is usually exempt from federal income taxes. These investments
generally pay back at a lower interest rate than commercial bonds of similar quality.
Since Treasury Bonds are similarly exempt from state and local income tax, they can be a particularly good
investment for those who are in high tax brackets and live in high-income-tax states.
You have the ability to invest some of the money that you would have paid in taxes to add to your retirement fund.
Many employers will offer the opportunity to defer a portion of your earnings and contribute them directly to your
retirement account. Some of them may even match a portion of your savings. If this is the case, it is always advisable
to save at least the amount that your employer will match. This will give you an automatic 100% gain on your money.
If you are self-employed, look into getting a Keogh, SIMPLE or a SEP IRA.
If you own your business you may want to postpone sending certain invoices to ensure that you will receive payment in the following
tax year. This can help greatly if some of this income would push you into a higher tax bracket. You may want to accelerate paying
for expenses to cover your taxes in the current year.
It is a good idea to keep all of your receipts and any other records that you may have of your income and expenses.
These will come in very handy if you are audited.
There are many different ways to use tax breaks for the higher education of your children.
Be aware that you can only receive one type of relief for one item. It is best to consult with a professional to
determine which would be the most advantageous.
It is possible to have various 530 accounts for the same student, each opened by different family members or friends.
There is no limit to the number of people that can open an account like this for a child.
The account can be transferred to another family member at any time. If the original child decides against going to
college or is granted a scholarship, another family member can still utilize the money that has been saved.
The Section 529 is a college savings program available in most states. Money is invested to cover the costs of future
education. These investments grow tax free and the distributions may also be tax-free.
Yes, you can take distributions from your IRAs for qualifying education expenses without having to pay the 10% additional
tax penalty. You may owe income tax on at least part of the amount distributed, but not the additional penalty. The amount
of the distribution that is more than the education expense does not qualify for the 10% tax exemption.
There is a limited deduction allowed for higher education and related expenses. In addition, business expense
deductions are allowed, without a dollar limit, for education related to the taxpayer's business, employment included.