Tag: Taxes

  • 8 Tips to Maximize Your Tax Refund

    Tax season is here! The IRS just announced that Monday, 1/23/23, was the first day they would begin accepting and processing 2022 tax year returns. The deadline to file is 4/18/23, so save the date on your calendars! If you plan on making some big purchases with your refund, you might want to read on for some tips and tricks to help you get your biggest refund yet!

    Here are 8 tips that will help you maximize your tax refund:

    #1: Take advantage of an FSA account if your employer offers it

    As part of Tomo’s benefits, we offer all of our employee’s the option to contribute to an FSA account. An FSA account, or Flexible Spending Account, allows you to put money in an account for eligible FSA expenses. When you need to use your FSA dollars, the money is deducted automatically from your paycheck before taxes are taken out. You can save on average 30% by using pre-tax dollars to pay for eligible FSA expenses.

    #2: Donate to charity

    According to the IRA, you may deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases.

    #3: Claim credit for energy-efficient home improvements

    This credit offers a maximum value of $1,200 per year from 2023 through 2032 and can go toward investments like qualified energy efficiency improvements made to domestic residences (i.e. improvements towards qualified exterior windows, doors and skylights, and building envelope components).

    #4: Max out your IRA.

    IRAs are a great way to save towards your retirement while reducing your taxable income. Make sure the IRA account is a traditional IRA and not Roth. Roth IRA accounts are not tax deductible now, but traditional IRAs offer tax deductibility in the present.

    #5: Reconsider filing status if you are married

    Filing status is important because it determines your credit eligibility, filing requirements and standard deductions. If you and your spouse have similar or identical incomes, a marriage penalty could affect your tax return. Consult a tax professional if you are unsure if you should file jointly or separately.

    #6: Itemize deductions

    According to IRS, you may benefit from itemizing if any of the following circumstances apply to you:

    • You cannot use the standard deduction.
    • You racked up pricy uninsured medical and dental expenses.
    • You paid interest or taxes on your mortgage.
    • Your employee business expenses were unreimbursed.
    • You gave money to charities.

    #7: Start your tax preparation now to avoid delays!

    If your tax return is simple to prepare and you only have a w-2, it is better to get it done as soon as possible. The IRS processes over 100 million returns each year and can sometimes experience delays due to heavy incoming tax forms. Choosing a direct deposit method for your return may also be the best and quickest option.

    #8: If you are a gig worker, count your work as income

    If you are/were a delivery driver, Uber driver, or did any other work as an independent contractor, you must report your earnings and file your income on your tax return.

    We hope that this information was helpful for you to get your biggest refund yet! For more financial tips and tricks, be sure to subscribe to our Medium page and also check out our website www.tomocredit.com.

  • Voting for Your Finance

    This year’s presidential election has become a hot topic, and how you vote will undoubtedly have a tremendous impact on not only the entire nation, but also you and your personal finances. Let’s talk about where Biden and Trump stand when it comes to finances.

    Tax Policy

    No one likes to pay taxes and politicians are always arguing over tax policies. Biden and Trump are no different. In 2017, a bill called the Tax Cut and Jobs Act (TCJA) was passed by under the Trump administration. This bill essentially cut down tax rates for individuals and corporations all around. Biden plans to repeal some of the effects of TCJA and raise taxes on corporations and high income individuals who make more than $400,000 a year. All other income brackets would remain untouched from the changes made by TCJA. Trump plans to make the effects of TCJA (which are set to expire in 2025) become permanent as part of his tax policy. He has also mentioned lowering taxes for the middle class, but has provided no details yet.

    Coronavirus Stimulus Package

    Back in March, Congress passed the CARES Act, which provided economic assistance to all eligible Americans. Many Americans depended on the stimulus checks provided by the CARES act and have been waiting for a second round for months at this point. Both presidential candidates discussed their stance on how they will handle the second round of stimulus checks. Biden has stated that if he wins the election, he will provide Americans with another $1,200 check. Trump had originally stated that he had instructed his representatives to completely halt all talks of a new stimulus bill, though shortly after, within a week’s time, started pushing for a new stimulus to be passed. Congress is currently working out the conditions of this new stimulus bill, although the likelihood of it passing before November 4th is incredibly slim.

    Minimum Wage Increase

    Federal minimum wage has remained at $7.25 and has not changed since 2009. Many Americans argue that the economy has changed since then and that the minimum wage needs to be adjusted for inflation in order to reflect that change. In July 2019, House Democrats tried to pass a bill that would gradually increase the federal minimum wage to $15 by 2025, but Senator Mitch McConnell, the majority leader of the Senate, said he would not be taking up the bill in the Senate. Since then, the bill has remained in limbo. Biden, however, has openly supported raising the minimum wage to $15. As of the most recent debate, Trump has stated that while he would consider raising the federal minimum wage to $15, he prefers to leave that matter up to the states.

    Student Loan Debts

    As of 2020, student loan debt has increased to an alarming amount of $1.6 trillion. The topic of student loans could potentially draw the attention of young voters, who have been historically known to have low voter turnout rates, but have the ability to sway the election from one side to the other. Biden states that, should he be elected president, he will forgive $10,000 every year for up to five years to those who earn less than $125,000 a year. That means up to $50,000 will be canceled for those in debt. Trump has not made any clear statement on where he stands with student loan forgiveness. However, in response to the COVID-19 pandemic, he has halted federal student loan payments until next year.

    Getting Involved

    There is so much more at stake in the upcoming elections on November 3. Exercise your right as an American citizen and let your voice be heard by voting in the elections this year. Election Day is on Tuesday, November 3. While there are several options to submit your ballot, voting by mail is, by far, the safest option during the pandemic. For those who plan to vote by mail, your ballot must be postmarked by election day. States can have varying requirements, so make sure to read your state’s guidelines carefully! If you prefer to vote in person, check where your local voting centers are beforehand and make necessary preparations to vote while abiding by coronavirus safety regulations. If you are unable to vote, there are other ways to get involved, such as, encouraging others to vote and advocating for issues important to you. So, get out there and let your voice be heard!