Christmas Taxes
Introduction
It’s the time of year when we start to think about taxes. Taxes can be intimidating and confusing, so let’s take a look at some topics that are important for this time of year.
Tax planning is always a good idea, especially around the holidays.
While you might be thinking about the holidays, tax planning should also be on your mind. It’s important for everyone to plan ahead and make sure they are getting the biggest possible refund or paying their fair share in taxes.
The holidays are a great time to start thinking about next year’s taxes because it’s easy to get distracted by all the fun activities and festivities happening around this time of year!
Let’s take a look at some tax topics that are important for this time of year.
- Tax planning is always a good idea.
- The holidays are a great time to start thinking about your taxes, and the new year is just around the corner.
- Whether you’ve been meaning to take advantage of deductions or simply want to make sure that you’re not overpaying on your taxes, now is an ideal time for tax planning.
- Let’s take a look at some tax topics that are important for this time of year:
The IRS looks for all the ways you might have failed to report income.
The IRS is looking for all the ways you might have failed to report income. The agency has a lot of resources, so it’s best to be honest with them and make sure everything is in order.
If you haven’t filed your taxes yet, don’t worry! The deadline isn’t until April 17th–you still have time to get them done before tax day rolls around again next year.
You can deduct your travel expenses if you meet certain criteria.
If you’re a business traveler, the IRS allows you to deduct your expenses. If you’re in the military and stationed away from home, the same applies. If you’re self-employed or a freelancer, this is also true.
The criteria for claiming travel as an expense is fairly straightforward: You must be on business; it must be related to that business; and it must be out of town (or state). The last point can get a little tricky if there’s no clear line between where one place ends and another begins–as with many parts of life!
There’s nothing better than some good old-fashioned tax planning.
If you’re like most people, you probably aren’t thinking about taxes right now. The holiday season is a time for celebration and family bonding–not to mention some good old-fashioned holiday stress. But there’s one thing that can help ease both of those things: tax planning.
It might seem like a boring topic (and it kind of is), but if done right, tax planning can save you money by avoiding penalties and getting more out of your tax return than just the standard deduction. It also allows you to plan for your future–whether that means saving up for that dream vacation or starting an emergency fund so that when something goes wrong financially in life (like car trouble), it won’t derail everything else going on at home.
Make a list of all your income sources.
The first step to filing your taxes is knowing what you’ve been earning. This means going through all of your bank statements and records of income, whether it be wages, tips, interest payments or dividends. It may seem tedious now but it will save you time later on if you have everything organized in one place before getting started on the actual filing process.
You should make sure that every source of income has been accounted for–even those small amounts from side jobs like babysitting or pet sitting! It’s also important to keep a record of these sources so that when tax season rolls around again next year (or whenever), nothing slips through the cracks between now and then.”
Prepare and file your returns electronically.
It’s a good idea to file your taxes electronically because it can save you money. There are many benefits to filing electronically, including:
- It’s safe, secure and fast.
- You’ll get your refund faster.
- You can track the status of your return as we process it so you know when it’s done or if there is a problem with the information on the return (for example, missing Social Security numbers).
File an extension if it’s necessary.
You can file an extension online, by post or by phone. If you don’t file an extension and the government owes you money, they will charge a penalty for not paying on time. If the government owes you money, then filing for an extension is free of charge.
The IRS website has all of this information available to help guide taxpayers through filing their taxes by April 15th or whenever their situation dictates it best suits them as individuals (or businesses).
Reconnect with your tax advisor.
It’s important to have a trusted advisor who can help you navigate the current tax landscape and make sure you’re on track for next year. If you haven’t already talked with them, now is the time!
What should I ask my advisor?
You should ask your advisor:
- What are the biggest issues facing small businesses right now?
- What do I need to be aware of when filing my taxes this year?
- What steps can I take in advance so that next year’s taxes are easier?
Pay attention to Social Security and Medicare taxes.
- Social Security and Medicare taxes are calculated differently than other types of taxes, so it’s important that you understand the process. The amount that you pay depends on your income, how old you are and whether or not you have any dependents.
- If you haven’t been paying enough throughout the year and now owe money, there’s still time to avoid penalties and interest charges by making a payment with Form 1040-ES by April 17th (or earlier if possible). You can get more details about this option on IRS website at https://www2.irs.gov/pub/irs-pdf/f1040es.pdf .
- If instead, it turns out that because of overpaying during 2018; then those funds will be refunded when filing taxes in 2019!
While you’re on vacation, make sure you’re still contributing to a qualified retirement plan.
While you’re on vacation, make sure you’re still contributing to a qualified retirement plan.
- How much do I need to contribute? The IRS requires that employees who participate in an employer-sponsored retirement plan (like a 401(k) or 403(b)) must contribute at least enough money each year so that their combined contributions equal at least 5% of their salary. If your employer offers a match, make sure you take advantage of it!
- How much can my employer contribute? In 2018, the maximum amount that an employee may defer under Section 402(g)(1) was $18,500; the maximum catch-up contribution allowed under Section 414(v)(2)(B) was $6,000 ($24K total). Keep in mind that these numbers vary by year: they go up every few years based on cost of living adjustments and inflation rates.* How do I contribute? There are two ways: automatic payroll deductions or voluntary contributions through payroll direct deposit option with your employer’s financial institution (or directly into an IRA if self employed). Once set up correctly these processes should happen automatically without any effort from either party involved.* What happens if I don’t participate? You’ll miss out on some great benefits! Not only does saving earlier mean more time for compound interest growth but also means less money spent later on taxes when withdraws occur after age 59 1/2
Taxes can be intimidating, but they don’t have to be!
Taxes can be intimidating, but they don’t have to be! Taxes are a fact of life. They’re the way we pay for things that are important to everyone: roads, schools and parks. Taxes also help pay for programs that benefit everyone like Medicare and Social Security.
The best thing about paying taxes is knowing that you’ve helped support your community and country by making sure it runs smoothly!
Conclusion
We hope you’ve found this information helpful, and that it helps you keep your taxes from being a burden during the holiday season. Remember that there are many ways to reduce your tax liability–from planning ahead for deductions to filing electronically so you don’t have to waste time on paperwork. And if all else fails? Take a break from thinking about taxes altogether!
