Parents deserve a bit of a (tax) break now and then.
As a busy parent, filing taxes can be found on the To-Do list between Monday’s soccer practice and Thursday’s parent-teacher conference. Do yourself a favor this year and see if you are eligible for the Child Tax Credit. Tax credits are great because, unlike deductions, they reduce your tax bill dollar-for-dollar. That means, a larger tax refund for you and your family!
What is the Child Tax Credit?
The Child Tax Credit offers a credit of up to $1,000 per child to qualifying taxpayers. It is only available to those who can claim a child as a dependent and meet several other requirements.
There is no limit to the number of children you can claim using the Child Tax Credit, however, claiming lots of kids may subject you to the Alternative Minimum Tax (AMT).
Who can claim the Child Tax Credit?
In order to claim the Child Tax Credit, the child in question must: Continue reading “How to Claim the Child Tax Credit”
Tis the season of Secret Santas and Holiday Company Parties.
It’s a common tradition among businesses to get in the holiday spirit and give gifts to clients and employees. Even though giving gifts doesn’t typically put the idea of taxes in mind, it’s important to know how to report business gifts as tax deductions.
What are direct gifts versus indirect gifts?
The IRS will give the green light on a tax deduction for two types of gifts; direct and indirect. Don’t worry – this still gives you substantial leeway to choose that perfect gift this year. Direct gifts are given as part of a direct professional relationship. For example, the owner of 123, LLC gifts a Godiva gift basket to each employee for the holidays. Indirect gifts typically involve a middleman, such as sending a gift home for your employee’s child.
Is there a cost limit?
There is a $25 limit per gift, per year. What’s that mean? Well, let’s say that your company likes to give gifts to clients or employees multiple times per year. The deduction would only apply to ONE gift and only $25 of that gift could be deducted.
Keep in mind that the gift CAN cost more but only $25 of the total can be reported as a deduction (so hold onto that ‘#1 BOSS’ title and keep giving your employees those iPad minis).
Does the cost include incidentals?
Continue reading “Holiday Tax Deductions: Business Gifts”
It’s almost time to bust out the wrapping paper and tinsel!
Yes, it’s that time of year again. It’s the season of giving. Before you get wrapped up in holiday parties and stocking stuffers, you’ll want to make sure that you’re mind isn’t blurred with visions of sugarplums and too much eggnog.
January marks the start of tax season and we want to make sure that you’re ready. That includes reporting those holiday gifts to charity as tax deductions.
How do I donate?
We tend to think that the only way we can help out in society is by breaking out our checkbooks and tacking on as many zeros as our bank accounts will allow. Money is great. But it’s not the only way. It’s also probably the main reason why the majority of us end up doing nothing. We simply can’t afford to.
Seeing as our daily lives revolve around checking up on ourselves (our bank accounts, our smartphone notifications, our Tinder profiles), it’s easy to forget that taking the time out for others is also considered a charitable donation.
If you can write out a check, then all the more power to you! If you can’t, don’t downgrade the time you can spend helping out at your local soup kitchen or cleaning out your closet to donate those jeans and blazers you never ended up wearing. Your nearest Goodwill or Salvation Army will take them off your hands.
Where should I donate?
The dilemma for some of us is that we don’t know where our hard earned dollars are going when we donate to a charity. We understand! Who wants to spend time researching a reputable charity to support and then not be certain that they are using your money the right way? Continue reading “Holiday Tax Deductions: Gifts to Charity”