Category: Business Consulting Goose Creek

Tips for Financial Recovery and Savings After 2020

6/2/2021

Now that we've made it through two very intense and unique tax seasons, we wanted to talk a little bit about saving money so when the next tax season comes around, it won't be such a shock to you or your bank account! We will also be talking about how to begin recovering financially from the whole of 2020!

While many of our readers and some of us at Hoods are still reeling from the after-effects of these past two tax seasons, we can all take a deep breath and say "we did it"! We've learned a lot about the tax environment and the changes in tax law thanks to these past two tax seasons and thanks to these blogs, and we hope that all of our readers take each and every one of these lessons to heart! For many, one of the trends that we saw throughout these strange and unknown tax seasons is the fact that those tax bills have been a little shocking and unexpected. Of course, due to the pandemic, those tax bills did hit a little harder and were a little more unexpected than most have been in the past! After last year, we should all know that anything could happen when we least expect it to, and now is the time to be as financially prepared as possible. Now that we are on the other side of things and with these ideas in mind, we wanted to dive into some tips, suggestions, and ideas on how to help you save money better than you have ever before, to help prepare you for the next tax season, and to recover from the aftermath of 2020.

After last year, and after many savings accounts, 401(k)s, and IRAs were dipped into, saving money, we're sure, is one of your top priorities right now. Getting back into your flow of saving money will help make up for what you need to do financially to stay afloat, and will also help you begin paying back what you took out of these saving accounts and to get you back on track and help you feel a little more secure financially for the first time in a long time! While no one can specifically say when we will all be back on our feet financially, we do know that there are steps you can take to get back on the right path again. One of the biggest parts towards recovering your finances and getting back on track is simply starting. Make a plan and get going! Make a plan that works for you and get started one step at a time!

If you did take money from your retirement plan or contribute to a retirement account, your decisions about how you're going to move forward from last year are going to make the biggest differences in your financial future and will help you solidify it once again. It is in your best interest to stay cool, calm, and collected right now, and to get focused. Outside of some of the tips that we are going to be sharing with you today, it is in your best interest to get back into the habit, if you haven't already, of contributing to your retirement program and your overall savings account. You don't have to start back up at the amount you were paying into either before the pandemic, but getting back into the habit of saving as you can, even with smaller amounts, can make a big difference! With all of this in mind, let's get right down to some of the best ways you can start saving money and begin to recover financially from 2020 and to be prepared for next year's tax season!

Online shopping became an even larger part of our daily lives last year out of need and safety. Now, you can turn it around and make it work for you! Are you looking to go shopping for any extra items or a big-ticket item you've had your eye on for a while now? Hop back online and shop smart by doing some price comparison between the items you're interested in. Never let a good deal pass you by, you have too many tools at your disposal not to! You can save a lot of money with the use of online digital codes and promotions, too.
While this isn't a new or groundbreaking idea, it's one you will continue to hear about because it's still such a hard and fast rule that always works! Begin budgeting better by cutting back on unnecessary expenses. We know this might be extra difficult right now as more and more things begin to open back up and (hopefully) you're working again at almost, if not full, capacity! While it's going to be very tempting to get out there and feel like normal again, take your time to ease back into normal spending until you've recovered financially. Even then, your best bet is to remain financially diligent for a while and to continue these habits throughout your life. One of the best ways to get a better idea of your money is to really understand where it's going and track it as best you can. There are a ton of excellent and helpful apps that can help you do just that!
While you're working to recover in multiple ways financially and beyond, part of that recovery is planning for what could come in the future. No one saw 2020 coming, and without being too cryptic, we don't know what else could be coming our way! With last year still fresh in our minds, it would be wise to start working on building an emergency fund so you won't be hurting again or in a tight spot if another year like 2020 happens again!
One of the best things you can do is to make a plan of how you're going to pay off all of your debt, and set real and attainable goals to do so. We do urge you to be as realistic about these goals as you can be, and to give yourself time and patience! It will take time to see the end of your debt, but it will happen and it will be worth all of your hard work!
Automation can be a real life saver! Choose automatic payments for as much as you can, and do it for more than just paying your bills. You can choose to have money taken out and put into your savings, retirement fund, and much more. Automated payments can make sure you don't accrue any late fees, don't spend anything rent money by accident, and can come with a few perks if you choose to go paperless and turn on automated payments with your bank and other saving establishments.
Try matching your savings to how much you spend every week, if not more. If anything try to match your savings and spending dollar per dollar!
Get creative on how you spend your free time! Look for fun and free things to do right now in your city, as it is becoming safer to do so and the weather is so wonderful! Since it is almost officially summertime in the Lowcountry, there are so many amazing things to do for free right outside your front door! Also, try and cut down on eating out! While this may not have been part of your 2020, it can be tempting to get out as much as possible now. Save for when it's a special occasion, and start cooking at home as much as you can.
Continue with the popular trend that 2020 rushed in with DIY projects and doing work around your home yourself. All the projects, cleaning, and yard work that you can do with no problem, keep doing them! This can be a huge money saver!
While traveling does sound very tempting after the year we've had and the prices for plane tickets are looking very appealing, pump the breaks before you book ten trips back to back this summer! Continue to be smart about your overall budget and let that include your travel budget too.
Don't just save because you want to save. While we always recommend having an excellent savings account and financial plan, go one step further. Sit down and understand what you're saving for. A nest egg? Emergencies? College? Vacation? Your dream home? All of this and more? Whatever it might be, understand exactly what you want. Visualizing it can make saving money a lot easier. You can see and say exactly why you're putting this money away, not just because you know it's the right thing to do!

While this list of the ways to save money and ways to begin repairing your fiances after 2020 is just a small one in comparison to all the savings options out there for you, it is a great place to get started! You need to find what works for you, financially, and commit to it! If you have any questions, comments, or would like to discuss your financial options of how we can help you, please never hesitate to reach out! Please remember that we are your leading experts and tax preparers in the Goose Creek area to help with tax prep, throughout tax prep season, the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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You've Paid your 2021 Taxes, Now What?

5/20/2021

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Now that we've made it to the finish line of filing our 2020 tax return, what happens now?

First of all, dear readers, we want to thank you for another successful tax season. It's been two tax seasons in a row now that have brought on some of the most unique, difficult, trying, and last-minute changes. You've stood with us, been patient with us, and you've let us care for and prepare your tax returns during these uncertain times. We would be nothing without our customers, patrons, and supports, and we appreciate each of you. While some of you might have applied for a final tax extension due in October, we've made it through tax day 2021, May 17th! This is a well-deserved celebration for all of us, and we hope this year was as painless and as stress-free as it possibly could be and we hope you have a very promising refund heading your way without a huge tax bill to pay. Now that we've made it over and through tax day 2021, what now? When should you be looking for your tax return, how do you maximize your 2021 tax return, what is some good advice to remember, and what should you do to get a jump start on next year's tax season? That is what we are going to be talking about today, so let's get right down to it!

Tracking Your 2020 Tax Return
Now that everything has been sent off to the IRS, you will be anxiously waiting for that refund check you worked so hard to file for. While many taxpayers have already received their tax returns, based on the fact that they filed much earlier than the May 17th deadline, many taxpayers are still anxiously waiting for theirs. Here are a few things to remember and a few different ways to track your refund!

Remember there are a few elements as to why you are still waiting for your tax return. One is that you just filed, and the closer you file to the actual tax day, the longer it will take to get your refund back. It also might be talking a little longer because you filed by mail and not electronically as the IRS suggests. Also, the IRS may be doing some extra calculations of your return, for your benefit, because you might be eligible for a Recovery Rebate Credit.
You have the option to use two tracker tools set up by the IRS. By using both of these tools you can see if your return was successfully received, if the IRS is currently processing your return, and when your return is due to be mailed out by check or directly deposited into your bank account. The first step in success is to have had your return in by May 17th! Otherwise, it might take even longer to receive your return and you might even get hit with a few penalties.
The same tools to track your tax return can also track your stimulus payments. Note that you might receive extra money if you qualify for a tax break if you received unemployment last year.
It is also very important to understand that last year, due to the pandemic, the IRS was only running at half capacity which put a huge strain on processing everything on time and that strain is still there. The pandemic is still causing some delays. Right now, the IRS is predicting 21 days to get a refund returned to you. However, it could be longer due to how you filed and if you are eligible for a recovery rebate credit.
To begin tracking your check, make sure it's been at least 24 hours since you submitted it. Make sure to have your SSN or taxpayer-identification number handy, your filing status, and the amount your whole refund is going to be in one hand. You will use the "wheres my refund" tool on the IRS website by entering in all of this information. Once you've hit enter, you should be taken to a page that shows your status. The IRS also has an app called IRS2GO that you can download onto your smartphone. On this app, the IRS will update the information every 24 hours, so if you can't find your electronic submission that night, just try again the next night!
Your return could also be delayed if there are errors found on your return if it has been affected by identity fraud, if it needs review, or if it includes an 8379 Form, which could take up to 14 weeks to process.
If you aren't finding any information, you can try and call the IRS directly, but be forward. Their live phone tie is extremely limited and you could be on this call for a long time.

Tips To Remember
While we did just meet tax day 2021, it's never too early to prepare for the future, to continue learning about your taxes, and to help those who applied for the October extension.

Was this not a successful or pleasant tax season for you, regardless of the pressures put on you due to covid? Maybe it's time to ask for help and work with tax professionals, like us, next year!
Did you file by mail this year? File and pay on time electronically instead.
Begin paying quarterly estimated taxes to help in the long run.
Learn from your taxes this year, organize your records, receipts, and write-offs better than you did this year. Start now instead of waiting until the last minute.
Think about adjusting your withholdings.
If you can boost your 401(K) contributions.
Get started now and start a tax fund savings account. Open it now and continue using it for the rest of your life.
Invest your tax refund in an IRA.
Know ahead of time what forms you'll need to file properly.
Keep all of your previous tax returns and tax information in the same place.
Track all of your charitable donations.

Maximizing Your Tax Return
While most Americans have already filed, this is still vital information to remember for the future!

Don't forget to think about the future. By contributing to your retirement plan, you will receive multiple benefits for doing so.
Make sure to do your research to find out if you are eligible for refundable tax credits and to claim them if you are.
If you are eligible, take above-the-line deductions.
Don't forget to claim the beneficiary, friend, or relative that you've been taking care of and caring for.
If you can itemize your deductions instead of taking the standard deduction, that can save you a big chunk of change if done properly.
Make sure to take advantage of all the benefits available to you by the pandemic and the coronavirus relief measures.
Is your filing status the best option for you right now? If you have other options, you should take them!
Take advantage of all tax deductions that you're eligible for.
If you can, make your mortgage payment for January by Decemember 31st. Get it in earlier to get the added interest for your mortgage interest deduction.
Use the refund you get back this year to pay off any current debt to make sure your life is a little easier for when the next tax season comes around!
Turn around and instead of spending your tax return, invest it!

While there is still reason to celebrate that we made it to and through tax day 2021, it is always time to keep thinking ahead and beyond. There is always a tax season to come and there is always more to learn to make the next better than the last. We will always be here to support you in your finances and all upcoming tax seasons, so don't hesitate to reach out! Please remember that we are your leading experts and tax preparers in the Goose Creek area to help with tax prep, throughout tax prep season, the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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20 Interesting Facts About Your Taxes

5/3/2021

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Wanting to learn more about your taxes? As we prepare for tax day on May 17th, here are some interesting facts to help inspire you to keep learning about your taxes and to get your taxes in on time!

We've been spending the last few months talking about and discussing how best to prepare for your 2020 taxes with tips, suggestions, and up-to-date news information as it is released. We are now counting down to May 17th, the final day to get your 2020 tax return filed with the IRS. A gentle reminder to all of our readers, this time will come and go very quickly. If you haven't started on your taxes for 2020, now is the time to do so. If you are considering working with us at Hoods Tax and Accounting Service to prepare your taxes, please get them to us sooner rather than later. As you can imagine, we are getting busier by the day as this year's tax date approaches, and we want to make sure to prepare your taxes efficiently and get them in as quickly as possible. Please reach out and contact us now to begin this process!

To ease your process of doing your taxes over the next few weeks, we also recommend that you go back and read some of our most recent blogs. If you have just found yourself here on our blog, you will find a plethora of important tax information to make your tax prep for 2020 a breeze and will help calm and collect your fears and concerns. Remember, if you need more time to prepare your taxes, you have many options. First and foremost, make sure you do something. One of the first steps you need to take is to reach out and discuss your situation with the IRS. Not doing anything about your taxes is the worst decision you can make. Even if you can't pay right away, getting your tax return in with a note or explanation of why you can't pay is a great first step. Be proactive, stay in communication with the IRS, and you might be surprised how supportive and understanding they might be. Remember, they are people too. They all went through the pandemic just like you, and understand the trials and tribulations that you and your family might be going through financially.

For today's blog, we are going to continue our discussion about taxes but will be doing so in a little different way than we have been over the last few months. We are going to be sharing some interesting and important facts about your taxes that you may or may not know! We hope this blog will help you become even more proficient in your knowledge of taxes and inspire you to keep learning about them. Please know if that if you want to learn more or would like to talk about your taxes, please don't hesitate to reach out!

The federal tax code is more than 70,000 pages long, which has grown quite a bit since it was first written. In 1913 when the tax code was created it was only 400 pages long.
Every year the IRS will issue more than 800 different kinds of tax forms and schedules.
New York City and Illinois have the highest corporate tax rates in the world.
This fun fact is for all of our clients, readers, and friends who still file their claims on paper every year. At least 20% of all paper returns will have at least one error on them, raising the number of audits happening every year and delaying many tax returns.
Tax day wasn't always on April 15th. Even before the pandemic, tax day has made its way through the calendar over time. Starting in 1913, March 1st was tax day. In 1918, tax day was moved to March 15th, and finally, in 1954, our current tax day was determined.
Withholding income taxes began in the 1940s because the government needed a very steady flow of cash to help fund the second world war. The Current Tax Payment Act of 1943 had companies withhold income taxes from their employee's paychecks to make ongoing payments to the government on their behalf. Before this, between 1916 and 1943, Americans paid their taxes annually or quarterly.
Before the second world war, only about 1.1% of working-aged Americans filed a tax return.
According to the IRS and as of February 21, the average income tax refund is around $3,125
Two devastating floods happened in Johnston, PA that killed thousands of people and destroyed the town. To help recover from these tragedies, the state taxed alcohol to help raise money to rebuild. By 1942, there was enough money to completely rebuild the town. However, while the destruction of these floods was slowly fixed and went away, the alcohol tax did not. It remains to this day and brings in almost $200 million every year!
New York has a separate tax on prepared foods, which will cause it to be taxed twice. It is first taxed as a food and then is taxed as a prepared food.
In 2005, Tennessee required drug dealers to anonymously pay taxes on the illegal substances they were selling.
In many states, tax is tacked on to the admission into race tracks and casinos.
People who are 100 years old and are not dependants in New Mexico are tax-exempt.
On average, taxpayers will spend about 11 hours every year preparing and doing their taxes.
Willie Nelson created and recorded an album titled "IRS Tapes" whose sales went to cover his tax debts.
The president is not exempt from paying taxes, they are expected to pay like anyone else.
According to Forbes, the IRS receives over 140 million individual tax returns and collects over $950 billion in taxes.
Our tax code is made up of some 4 million words. It is constantly changing, as we have mentioned frequently in past blogs. Since 2021, our tax code has changed over 4,500 times.
For all of our readers and future customers interested in working with us at Hoods, more than half of everyone who files a tax return, about 57%, will file their taxes by working with tax preparers!
Are you still convinced that paper filing is still the best way to go? E-filing has officially become universal and almost 90% of all individual tax returns are done so by e-filing!

We hope you've been inspired by today's blog! While we know many of you have been dreading and not enjoying preparing your 2020 tax return, we hope you learned a little more about our tax system and some interesting facts to help cool your displeasure about filing this year! Please remember that we are your leading experts and tax preparers in the Goose Creek area to help with tax prep, throughout tax prep season, the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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The Dangers Of The Stimulus Scams

3/3/2021

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With the potential of a third stimulus check heading our way, a brand new round of stimulus fraud has made its ugly appearance. We wanted to shed some light on the topic and to help avoid any issues that might get you in trouble!

Welcome to the Hoods Tax and Accounting Service blog! While we are inching closer to the end of tax season, we wanted to bring a very important topic to our reader's attention! With the possibility of a third or even more stimulus checks coming our way, the rise of stimulus fraud has begun to show its ugly head yet again. When the country needs support now more than ever, you'd think that these scammers and spammers could take a break. Sadly, this is not the case. When people are in need, they are an easy targets for these horrible people to hit. They have taken advantage of people many times before and have been very active during these last 11 months of this global pandemic. While we will get through the pandemic, we might never be able to get through or get over these scammers and spammers. We wanted to share some more information about these ugly scams and how to keep yourself protected and safe!

These thieves, scammers, and spammers are taking advantage of honest taxpayers during this current tax season and have been through the stimulus payment periods. With the constant back and forth of the media on the current political atmosphere, it's easy for many to not know if that third potential stimulus check is a reality or not. Tax season is also in its own flurry, as many Americans are trying to file as quickly as they can to get much-needed funds from their tax return. In this fiscal pandemonium that is where these criminals are striking. It is very important to know that a third stimulus has not been distributed nor has it been confirmed, it is still in the works. Also, please remember that you will not receive your tax return until you've filed your taxes, and you will receive it one of two ways. You will either receive it in the form of a direct deposit to your bank account that you have set up with the IRS by providing your banking information, or in the form of a check in the mail. They will not ask you for any personal information directly to access your refund money. They already have all of this information about you. Also, they will never try to send your return to you in any other way nor can you do anything extra for the IRS (outside of filing your taxes) to receive your return.

While we know finances are still strained and you need that money, please do not accept any other offers baiting you to receive your tax return early. Also, please do not give away any personal information in exchange for your tax return. That is most likely some kind of scam or criminal target you. Please note, criminals do not discriminate. They will go after anyone to get any information or money that they can. It is also important to understand that the main form of contact for the IRS is through your mailbox. If you receive a text message, phone call, email, or voice mail from someone who claims to be the IRS without you prompting these responses, that too is most likely some kind of spam or attack.

While not directly linked, according to ABC 7 Chicago, another scam is to keep your eyes open for is fake COVID packages and test kits. These scams include offers to sell bogus cures, pills, the vaccine, and other medical advice for false and unproven COVID-19 treatments. Please do not give anyone information to receive such materials. These packages are fake, as are the items inside of them. If you are looking for a vaccine or help with a COVID diagnosis, please contact your doctor.

One of the biggest things we can recommend is to not engage in any of these criminal efforts. Do not respond to any phone calls, text messages, emails, or letters, even if it's asking them to not bother you. At the end of 2020, CNBC reported that Americans lost over $211 million to these types of scams, and the FTC has received over 275,000 complaints. When the first round of stimulus checks were released and time passed, fraud activity did quiet down. Now that the second has been released and tax season is here, there is no doubt that this rate will rise and continue until tax season is over on April 15th. If a third stimulus check is released, this pattern will repeat itself all over again. Scammers are always looking for an opportunity for their next payout. Remember that one of the many tactics these criminals use is fear, scamming taxpayers into giving them private information, or else! The IRS will not send unprompted emails, texts, nor will they call you with threats of sending you to jail or filing a lawsuit against you. They will also not demand wiring money or gift cards in return for your tax payments.

What Are Some Current Scams and Spam Threats?
Along with offering cures, vaccines, and help to fight or stay safe from the COVID-19 virus, some current scams look like this:

Fake donations for areas, groups, and people heavily affected by COVID-19. Please be aware these scams could appear in the same form but will be referencing natural disasters like the wildfires California saw last year, the hurricanes Texas and Louisiana saw last year, and the horrific ice and snow damage so many have suffered from in recent weeks. Please research before donating money, especially right now!
Phishing and scamming schemes online that use keywords that help a reader believe that they are legitimate. Some of these keywords include words like "stimulus", "refund", "COVID-19", and "corona virus".
Text messages that ask for your bank account number claiming they will deposit your stimulus money right away if you provide them with this information.
Receiving emails or text messages asking the recipients to verify their personal information. The IRS already has the information needed, and if not, they would not ask you to verify it in such an unprofessional or relaxed manner.
Another common tactic is that people are being contacted by these criminals and they claim that if you pay them a certain amount of money, wire them money, or send them gift cards of their choosing, they will send you your stimulus money faster. There is no such thing as getting it sooner, the IRS will send any stimulus payments and your tax returns based on their decisions and when you file your taxes.
Another scam to look out for is look-alike checks. Scammers send these very believable-looking checks to individuals, and then they are deposited on the trust that they are indeed real. The scammer will then contact the recipient of the check saying the amount of the check was incorrect and they need to return the amount of money they were overpaid. This leaves the recipient out of the check they believed to be real once it bounces, and the money they gave back as a "refund".
Also, please do not put in or give any of your personal or financial information to a non-government website when it comes to anything regarding the IRS. These phony websites can download malware on your device and steal any personal information your computer has access to, including your banking information.

How Do I Protect Myself from Tax and Stimulus Fraud?
With all of these very intelligent criminals hitting their targets on so many different platforms and in so many different ways, how can you protect yourself?

As we mentioned before, do not engage with these forms of communication; do not respond, and do not follow up with them!
Do not answer any phone calls from anyone you don't know, the same goes with text messages. Also, avoid visiting questionable websites and never open any attachments on any emails this so-called "government" worker has sent you. Avoid clicking on any links that any suspicious emails invite you to click on. The IRS would not have you do any of these things.
If you do answer a call from someone you don't know, claiming to be the IRS, and they begin to threaten you, take a deep breath and hang up. They will not be calling the police, they will not be calling their lawyers, and they will not be coming to your home. If you feel unsafe, please contact your local authorities and provide the phone number used to contact you.
If an email looks suspicious or too good to be true, it probably is. Go ahead and trash it. You can and should report all scams to the National Center for Disaster Fraud Hotline at 866-720-5721.
To learn more about these scams, please visit the IRS or FTC website. Please find those links below. After reporting the phone numbers or email addresses you've dealt with, please block them from your phone and your inbox and toss them out!

Tax season, tight finances due to a global pandemic, and dealing with staying up to date with potential future stimulus payments is difficult enough. Stay alert and educate yourself to avoid any fraud or scams that could potentially make your life even more difficult. Please never hesitate to contact us if you have any questions, and we are here and ready to help you through your 2020 tax season! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

To learn more and to report fraudulent activity, please visit the IRS or FTC website by following the links below.

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How To Claim Unpaid Stimulus Money On Your 2020 Tax Return

2/17/2021

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hile many of us received both of our stimulus payments, for many Americans that was not the case. Today, we are going to be talking about how to claim your stimulus payments on your 2020 tax returns.

Tax season will officially be here on Friday, February 12th, and while all Americans are preparing to get their taxes in by April 15th, many are still waiting for one or both of their stimulus payments to arrive. Great news, the two go hand in hand! You can claim your missing stimulus money on your 2020 tax return. Even if you are a nonfiler, you are still able to file a 2020 tax return and receive your stimulus funds. Today, we are going to be talking about how best to do that and why you will want to file your taxes as early as possible to help benefit future stimulus payments.

How Do I Claim My Missing Stimulus Payments On My 2020 Tax Return?
While tax season might bring on stress and worry, take comfort in the fact that if you've not received one or both of your stimulus payments or you feel like you were not given the correct amount by the IRS, filing your taxes can help you take action to get the money you're owed!

Tax preparation companies, like Hoods, are already accepting returns. However, you can not begin filing until Friday, February 12th. The faster you prepare your taxes, the quicker you can file them. The quicker you file your taxes, the quicker your tax return and missing stimulus money will be returned to you!
When filing, look for line 30, which will be labeled as Recovery Rebate Credit. It will appear on both 1040 and 1040-SR tax forms. 1040-SR tax forms are for those aged 65 years and older. Nowhere on your taxes will it mention stimulus checks or economic impact payments, it will only be referred to as your Recovery Rebate Credit.
On line 30, you will need to list what you have been given in total from the IRS (even if that is $0) and what you are owed. It is as simple and as easy as that. This will then increase the amount of the refund you will receive or it will decrease the amount that you will owe the IRS. Do not include any other amounts, writeoffs, or tax credits on line 30. Only list the amount you are owed from missing stimulus money.
Please remember that the first stimulus payment was worth up to $1,200 per adult earning $75,000 a year and below. If you made more, the amount provided decreased. The payment for couples was up to $2,400 for those who earned $150,000 a year and below. The amount also decreased depending on how much more filing couples made together over that amount.
The second payment was up to $600 per individual and up to $1,200 per couple, depending on the same regulations and guidelines as the first stimulus.
For the first stimulus, individuals could also receive an additional $500 per child under the age of 17 and $600 per qualifying child in the second round of stimulus payments. If you did not properly claim your children or guardians or did not receive these funds in either stimulus payment, these funds are still available for you to claim in your 2020 tax return as well. Please add this amount to what you write in on line 30 of your Recovery Rebate Credit. Please also make sure to adjust who you claim on your taxes to avoid any other issues like this in the future.
You also might qualify for more money if your income or household size has changed. Stimulus payments were based on 2019 and 2018 income and household sizes. If this has changed for you and your family, it could mean you are owed more stimulus money.
Even if you don't normally file your taxes, according to the IRS, you must file a 2020 tax return to claim the credit that you're owed.
By visiting the IRS website, you can see when and how you were issued both payments. However, as of January 29th of this year, the Get My Payment page on the IRS website will no longer be updated for the first and second economic impact payments. If you are not provided with a payment date for either stimulus payment or have not received one or both, then you can claim your payments on your 2020 tax return.
Filing your tax return early might even help out with guaranteeing any future stimulus payments. While a third has not officially been set, the president has made moves to propose one and it is currently being discussed. Filing sooner might also guarantee that you receive all the money you're owed next time, meaning less hassle for your future tax filing and more money when you need it.
The current bill being proposed by the government could lower the income amount for those who receive the full stimulus amounts. For example, single filers who make $50,000 and below instead of those who make $75,000 and below would receive the full amount. So, filing now will help make sure that you receive your full amount of economic relief according to the 1st and 2nd payment standards.
If you do file sooner rather than later, the third proposed stimulus check could be paid properly and in full, and it will be based on your 2019 and 2020 tax return, whichever they have most recently on record. If you made less in 2020 or had a baby, and the IRS only has your 2019 taxes on file, your stimulus payments would reflect your status of 2019 and not 2020.
Please remember that the fastest way to receive your return and your missing stimulus funds is to file online and to have an active direct deposit account on file with the IRS. The IRS is saying that 90% of filers will receive their refunds in 21 days or less!
If you owe money to the IRS, the money you are owed from the Recover Rebate Credit will be applied to the debt. Even if you are still owed stimulus money, you might not receive all of it if you owe the IRS.
Please remember that you will not have to pay any taxes on any of the stimulus money you have received or any that you will receive in the future.

We know 2020 taxes and future stimulus payments might be difficult to navigate, but we are here to help in every way possible. If you are still concerned about filing your 2020 taxes or about receiving your stimulus payments, please don't hesitate to reach out! Please know that all of us at Hoods are here to help you, and we want to help you receive your tax return as quickly as possible! Please reach out to us if you'd like to begin working with us or have any questions or comments! Is there a topic about taxes that you would like to learn more about? Let us know and comment below! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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Tax Preparation Tips for 2021 (Part two!)

2/3/2021

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We are here to finish up part two of this current blog series dedicated to tips, preparation, and planning for getting through your 2021 tax season!

Hello readers, and welcome back to the blog. With the recent announcement that the very first tax day doesn't begin until February 12th, we've all had a little more time to prepare for doing this year's taxes. We've mentioned and hinted at the fact that this year could be a little more difficult than the last and possibly more difficult than ever before. We understand your worries, concerns, fears, trepidation's, and want to make sure you feel prepared and are prepared for filing your taxes by April 15th of this year. With that in mind, we wanted to offer a few more tips and ideas on how to prepare for doing your upcoming taxes. We also wanted to offer some more information to plan for this whole process as well.

Preparing for your 2021 Tax Season, Continued

Remember that as you are preparing for your taxes, the stimulus money that you received is not being treated as taxable income. It is being treated like money the government would have given you as part of your refund, a sort of tax refund advance you might say.
Many Americans received unemployment benefits throughout 2020 due to losing a job, being furloughed, being unable to work, and being unable to return to work. When you signed up and did your paperwork to begin your unemployment benefits, you had the option of choosing how much you wanted to be taken out of your payments for tax purposes. Depending on how much you allotted the government to take out of these payments will determine how much you'll owe in taxes on your employment benefits. Remember, any unemployment benefits you received last year will count on your tax returns as taxable income.
Many Americans took up a side job or two throughout the pandemic, and are still working them to make up for other lost income. Even if you are self-employed or working for a stand-alone company, you will still be required to pay taxes. You'll receive a 1099 form from the companies you worked for or you'll need to pay a self-employment tax. Make sure to fill out and look out for your 1099 forms, and realize that this self-employment tax is a 15.3% tax that covers your social security and Medicaid taxes, according to Dave Ramsey. If you made more than $400 as a self-employed individual, you'll have to pay taxes on this income. Make sure to discuss this with your tax preparer, and make them aware of how much money you made during self-employment. You could potentially write off up to half of this on your tax return.
Remember, if you're working from home but your employer is in another state you might be looking at paying taxes in more than one state. This can be difficult as each state has different tax laws, which is another great reason to work with a tax professional. We can make sure that no mistakes are made since we are up to date on tax codes and tax laws in each state.
For all of our small business owners or those who work for a company who chose to defer payroll taxes, be advised. If this is something you chose to do, you could see smaller paychecks until these payroll taxes have been paid back. If your company chose to partake in this, you might have seen a little bump in your paychecks throughout last year. This wasn't free money, this was the action of payroll taxes being deferred, and now it's time to pay everything back.
Make sure you choose if you are going to do standard or itemized deductions before filing. Knowing that going into the process can help you organize all of the paperwork you'll need to use for either option ahead of time. While taking the standard deduction is always the easier option, itemizing could allow you to save more money. Just make sure you can prove all of your deductions.
Pick ahead of time if you and your spouse will file together or not. Do your research to see which option is best for you and your family.
If you're planning to prepare your taxes with us or on your own, one of the best ways to get all of your necessary tax documents without having to call the IRS directly is to create an online tax account with the IRS. This will also let you check your payment balance, set up payment arrangements, and view your tax forms and returns from previous years.
Remember that if you don't receive one or both of your stimulus payments, you can claim them on your 2020 tax return through the recovery rebate credit. This will either increase how much your tax refund will be or it will lower how much you owe to the IRS.
The IRS eliminated the 1040EZ and 1040A forms in 2019 and introduced a new form in 2020, the 1040-SR, which is designed for seniors. It has larger print and increased attention to detail to the standard deduction for those 65 years and older. It also added a new question regarding your cryptocurrency. Do not skip this question, the IRS is very aware of cryptocurrency and has been very open about the fact that many tax payers are not being open about reporting their cryptocurrency transactions.
As you're finalizing your paperwork, dotting your I's and crossing your T's, make sure to go back and double-check your work! Check your math, that all names and SSNs are correct, that you've chosen the proper filing status, and that everything is marked appropriately on all of your tax forms, and that you've signed everywhere you need to sign.

Preparation to Planning
Now that you have some excellent tips and suggestions on how to prepare your taxes, how about starting to plan for them? Thanks to both the CARES and SECURE Acts, there is a lot to plan for 2021!

First of all, you'll need to keep your eyes sharp. Both the SECURE and CARES Act brought a good amount of changes into tax law. SECURE was passed in late December of 2019 and it expanded retirement saving options and provided the option for individuals to adjust their tax and estate plans.
If you decide to take a CRD or a Corona Virus Related Disruption in 2020, you can recognize the income over three years or recognize it all this year for tax purposes. If you could potentially be in a higher tax bracket over the next few years, it might be best to recognize all of it this year.
Married taxpayers that have taxable income below $80,000 and $40,000 and below for individuals are allowed to realize tax-free long term capital gains this year. If your income goes above this over the next few years, your long term gains could be subject to a 15% tax rate.
A very beneficial advantage of gifting a 529 college savings plan right now is that five years' worth of gifts can be made in a single year. At one time, a taxpayer can gift up to $75,000 in one sitting to a 529 college savings plan, and if the gift comes from a couple it can be doubled!
You do have the option to defer the current year's tax liability to another year, which will increase your availability for cash investments, personal needs, or business. This is something that can help right now for those still struggling with Covid related financial strain.
Due to the changes of the SECURE Act, IRA and 401(k) accounts might have to be cleared out within ten years of the death of the owner. Exceptions include payouts over the beneficiary's lifetime for spouses, minor children until they're 18, and for the disabled or chronically ill.
Be prepared and familiarize yourself with tax bracket changes that came in with 2020 and how your financial standings might have changed within this bracket due to the financial hit the pandemic caused.
The standard deduction has gone up for all filing statuses. Single and married but filing separately filers deductions went up $200, those married and filing jointly will see an increase of $400, and filing as head of household will see an increase of $300. The standard deduction for single filers is $12,400 and $24,800 for married couples filing together.
Please note that the income tax brackets have increased due to inflation.
2020 caused millions of Americans to spend time in the hospital, and if you've found yourself stuck with a pile of medical bills you might be in luck. You will be able to deduct any medical expenses that are 7.5% above your adjusted gross income or your AGI.
Your children can help you when filing your taxes! Families can claim up to $2,000 per eligible child. Also, because this is considered a refundable credit, your family might be able to receive up to $1,400 per child as a refund!
For businesses that received PPP loan money, according to the IRS, any expenses you paid with money from these loans can't be deducted from your taxable income.
Please remember if you did take money out of your IRA or 401(k) during 2020, don't dread a huge tax bill coming your way. You have three years to return these funds and to get a refund on the taxes you might have paid on that money!

2020 was a difficult year, and we imagine that we'll be feeling its effects for a long time to come. Our goal through these two blogs, and more to come, is to help with the potential shock or difficulties that could potentially come your way for this tax season. Please know that all of us at Hoods are here to help you, and we want to help you receive your tax return as quickly as possible! Please reach out to us if you'd like to begin working with us or have any questions or comments! Is there a topic about taxes that you would like to learn more about? Let us know and comment below! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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Tax Preparation Tips for 2021 (Part One)

1/19/2021

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This might be one of the most unique tax seasons we will ever see in our lifetime, so we want to make sure you're prepared. Here are ten tips to help prepare you for your 2020 taxes!

Hello to all of our readers here in Goose Creek and beyond! All of us here at Hoods hope that you had a wonderful holiday season and that you're ready for tax season to begin. The IRS has announced that the nation's tax season will start on Friday, February 12, 2021. They will begin accepting and processing your 2020 tax year returns. After the tumultuous year that 2020 was, and the difficulties that are still with us, one thing we want to make sure of is that you're prepared for this current tax season. This might be the most unique tax season any of us will experience in our lifetime, but we want to make sure it is as pain-free as possible.

First and foremost, if you are overwhelmed and would like to work with a professional tax company, we will be happy to work with you! However, make sure to sign up for our services as quickly as possible before we run out of time and space to help you file your taxes on time. Remember, the sooner you file, the faster your tax return will be in your pocket! For those who didn't receive their $1,200 or $600 stimulus checks, make sure to include this in your tax paperwork to receive these funds as quickly as possible. With so many individuals still struggling with financial issues, we want to help get all of your money to you as quickly as possible. With all of that being said, we wanted to create a checklist filled with important suggestions to prepare you for doing your taxes. Our goal is to eliminate any stress, worry, and fear with this list!

While we ended 2020 with tips on how to financially wrap up your new year and ways to potentially save money come this current tax season, we are going to take you to the next step. We need to prep for what's coming, and this should not be a painful or stressful process. One way to prepare and help cut down on costs is to make a last-minute estimate tax payment. Paying the IRS before even filing? Yes, this is a thing! It is a possibility that throughout the year you didn't pay enough to the IRS, which could create a huge tax bill for you and you might also be owing penalties and interest already due to not paying enough. If you can pay a little to the IRS right now, you can cut down on the huge chunk payment coming your way in April, and you can budget to pay what you'll ultimately end up owing. Make sure not to overpay though, it is better to owe a few dollars than expect the IRS to send it back in a refund. According to the IRS, to avoid an underpayment penalty, you have to pay 100% of the previous year's tax liability or 90% of the current year's taxes. If you make an estimated payment by January 15th, you can erase the penalities you had for the 4th quarter of your taxable year. Making an early payment can help you in the future.
Always make sure to have all of your paperwork printed out, organized, and accessible before you sit down to do your taxes or work with a tax professional. You will need last year's tax return, all of your W2's and 1099's for 2020, all the receipts you're planning on using for write-offs, and more. One of the best ways to organize and make sure you have all the correct paperwork that you need is to print off a checklist to help you gather everything you need.
Handle your mail very carefully this time of year. Tax documents have or will start to arrive very soon, and it is easy to mistake them for junk mail or a bill that you already paid online. Make sure to not throw away any tax-related documents! Contacting multiple companies to get another copy of your tax documents can take weeks this time of year, and can delay your tax preparation as you work to send your taxes off.
Make sure all of your tax paperwork is organized and grouped in similar piles for easy access and to go through your tax documents more efficiently. Make sure to spend a good amount of time organizing your yearly receipts for your write-offs. Utilizing paperclips and folders in this process can help you save time and frustration!
While this tip might not be directly related to filing this year, attention still needs to be paid. As we saw and discussed last year, tax and stimulus scams and frauds are now at an all-time high. During tax season and with the release of the most recent stimulus check, scams and frauds are at their peak season right now, and you need to be on high alert with these delicate situations. You might begin receiving phone calls, texts, emails, and even letters in the mail from someone posing to be the IRS. Believe us, these scams and frauds are looking more believable by the day, so you need to be extra careful. The IRS nor the U.S Treasury department will ever call or text you. Don't respond to these emails or phone calls you're receiving. Remember, when it comes to money, these criminals know how to use fear tactics to their advantage. The mail is the only way the IRS is going to reach out to you, so please take caution.
For all of our readers who are over 70, please begin to consider and think about your RMDs, or your required minimum distributions. While you might have been enjoying sitting back and watching your IRA or 401(k) grow as you contributed to it every year, now that you're 70, things are going to be a little different. The IRS wants its share once you turn 70 1/2. Make sure that you take out your required RMD amount every year before the 31st of December, or you'll be facing a tax penalty of 50% of what your RMD amount is! If you didn't do this by the cut-off date of December 31, 2020, you will more than likely see a penalty on your taxes this year. The more you know now about how to handle this, it will help make sure you don't make the same mistakes next year.
We will put this tip on repeat because it is so very important. We all worked from home in 2020 more than ever, if not for the very first time. Do not skip out on writing off your home office tax deductions. However, you must be vigilant in this. You can't just write off anything and everything that you want to, the IRS is very smart and particular about this! Every space and everything you write off must have exclusively been used for business only and nothing else! Based on the square footage of your office to the total size of your home, you can write off a portion of the expense of your home like rent, insurance, utilities, and even housekeeping!
Please do not put preparing, doing, and filing your taxes off until the last minute. Rushing through your taxes will result in stress, mistakes, and potentially leading to getting your taxes in late. Mistakes and getting your taxes in late will lead to penalty charges, which will lead to owing the IRS even more money. This will also lead to your tax return taking longer to get into your pocket.
Please make the decision sooner rather than later if you need help with doing your taxes or not. There is no shame or harm in admitting this or working with a tax professional. Please do yourself the favor of filing and paying on time.
If you decide to not work with us at Hoods or with another tax professional, we do urge you to file electronically. This will help you file quicker, it is a much easier process, it will help guarantee that you don't make any mistakes or forget anything, and you might even have the option to pay electronically with a credit card or debit card so you don't have to worry about sending a check off to the IRS.
The February 12th start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.
To speed refunds during the pandemic, the IRS urges taxpayers to file electronically with direct deposit as soon as they have the information they need.
You can file your tax returns immediately with Hoods Tax and Accounting Service. We can prepare the returns now so you are in a queue for transmission to the IRS on February 12th. Contact us today. 843-797-5153

As we said, tax season takes preparation and that is no joke! It takes time and dedication, but it is well worth it. Over the next few months, our blogs are going to be dedicated to tax preparation and things you should know about doing your 2020 takes. Make sure you stick around and keep checking back in with us throughout tax season and beyond! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

To help you prepare for this tax season to the fullest extent, we have also included a few helpful links for you to enjoy and use below!

Corona Virus Tax Information: https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments
Where to report a tax scam or fraud to the IRS: https://www.usa.gov/stop-scams-frauds#:~:text=Call%201%2D800%2D269%2D,%2D800%2D366%2D4484.

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End of the Year Tax Preparation (Part Two!)

12/24/2020

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In part two of this blog, we are going to be finishing up our recommendations on how to prepare for your end of the year tax prep. Our gift to you is to suggest that you get it done now so that when tax season is here in a blink, you'll be ready for it no matter what!

Hello Goose Creek and to all of our readers! As we are now sitting in the last few days of 2020, and we hope that this blog reaches each of you and helps you prepare for the coming tax season. We have always believed at Hoods that being prepared way ahead of time can not only save you huge amounts of stress and worry, but it can also potentially save you huge amounts of money. This year has been difficult, we've touched on it in almost every blog of 2020. This pandemic has been a devastating blow in more ways than one, and our finances have taken some of the biggest hits and blows. While there is still so much uncertainty about what is to come with the future of our finances, what is in our power now is to control what we do know and what we do have.

Being prepared can help make any transition or event that may or may not come from the government easier to deal with and easier to move forward with. Who knows what financial help we might receive between now at April 15th or what might even happen between now and April 15th. What we do know is that there will still be tax day and that we have the power in our own hands to organize our tax documents from this current year and get ready to face 2021 head-on. This season might not be as jolly or bright as the years past, we understand. However, we are here to make it as holly and jolly as possible. If you have any questions, concerns, or need help finishing out this year or starting off strong in 2021, please never hesitate to reach out. We believe in our community and what to help and support each of you as best we can, let us do our job for you!

What is left of 2020 is still ticking down, so let's hop back into part two of this blog. We will be continuing and wrapping up with our tips, suggestions, and ideas on how to wrap up your finances and taxes this year, and get ready for the upcoming tax season!

HELLO, 2021!
Now that you've read part one of this blog and you have a few ideas on how to prepare for the end of this current year, let's focus on how to prepare for the beginning of this new year. Remember, one of the first things we will always recommend in these situations is to work with a tax advisor or a tax preparation company. Of course, we would recommend working with us, but we understand if you work with another company currently. We've said it before, but please note that tax law does change every year. With how uniquely challenging this year has been, there are bound to be some very new and unique things we will be facing with our 2020 taxes. Working with a company like ours will help ensure that all of these new compliances are followed and that nothing is missed. This will help you avoid any tax penalties, avoid underpaying your taxes, will help avoid overpaying your taxes, and will help get your refund much faster!

Don't begin your filing process until you've received all of your 1099s or W2s. Don't be quiet if a client or your employers are taking their time getting you your tax papers. Make sure to reach out and mention it to them once it's getting a little late in the year. If you haven't received anything by the end of February, it's time to start making phone calls!
When you sit down to file your taxes, make sure you have all of your 2019 tax documents organized and ready to use. Make sure you have all of the documents that you will need and will be used to file for 2020 organized and within reach. This will help the process go faster and will be much less of a headache for you.
Make sure to be prepared for and aware of tax scams and fraud that will begin to pop up starting January 1st!! We've already seen our fair share of scams this year involving our stimulus checks and promising to provide the vaccine early as long as you provide very personal and vital information about yourself, most of the time about your bank account. Please do your research about what scams and frauds are looking like right now, how to spot them, and how to protect yourself from them. Also, if you have loved ones who are unfamiliar with these scams, please make sure you help keep them aware of these possibilities and teach them about what scams are and what they can do.
Decide who's going to prepare your taxes this year as quickly as possible. Decide if it is going to be a tax professional like us here at Hoods or an online option filled out by you. Make the choice now to save money and not miss out on working with a tax pro. The closer you get to tax season, the higher their rates will be. Also, take the time to familiarize yourself with the programs you're going to use and understand how much you will be paying to use them.
Please do not ignore the IRS. If you owe late fees, back taxes, or penalties, please take care of them. Go one step farther and make sure to prepare your taxes on time, if not early, to avoid these issues again.
Make sure your salary is correct, that all of your deductions from your paycheck are correct, and that you've been paid the proper amount throughout the year. This will determine a lot in your taxes.
Consider turning your IRA into a Roth IRA, which will help you save money over time. With a ROTH IRA, withdraws are not looped into your income and you won't have to take out RMPs once you turn 70 and a half.

Just to make sure that we didn't overwhelm you with either part of this blog, we listed only the top things and tasks you need to be thinking about and preparing for now for both your end of the year tax preparation and the tax prep you should be starting 2021 off with. Don't worry, there will be more to come over the next few months and as we inch closer and closer to tax day 2021. We hope that both of these checklists help prepare you to close this year out strongly and to start 2021 out focused and prepared. If you need help to make this upcoming tax season the most stress-free of them all, never hesitate to reach out!

Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. As our last blog of 2020, we want to thank all of you for your support, your business, and for letting us be apart of this wonderful community. We will continue to work hard for the people of Goose Creek and our whole community. From our family to yours, we hope you had a wonderful holiday and have a fantastic New Year! We will see you soon!

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End of the Year Tax Preparation (Part One!)

12/18/2020

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While the holidays are on the minds of so many of us, the end of this fiscal year and getting ready for the upcoming tax season needs to be just as important right now. Don't lose your holiday joy, but add this awareness to your to-do list before and after we ring in the new year!

Hello, Goose Creek! Can you believe that we're almost at the end of this fiscal and taxable year? 2020 has seemed to drag on and pass by in a very strange flash. It has been a difficult year for our financials with a cut-off tax date of July 15th, a stimulus check, working from home, being furloughed, losing jobs, and starting all over again. While you might not have checked all of those boxes, we're sure you checked some of them. While the holidays are already difficult for so many people and their fiances, 2020 might be even more difficult. We also need to keep in mind that tax season, regardless of where we all are right now, is still going to be a lot sooner than you might think. The end of the year might seem like it's a long way off, but only a few weeks between us and the New Year remain on our calendars. Once January arrives, we'll blink and April 15th will be here in no time. With the strain of the holidays, 2020's toll, and an ending fiscal year, and another one starting soon, we wanted to give you a like holiday cheer with this blog. In this two-part blog, we will be sharing some tips and suggestions on how to prepare for the end of the year and the beginning of the year when it comes to doing your taxes, properly and professionally getting them done, and how to save as much money as possible.

Goodbye, 2020!

Please remember that tax planning and making moves to reduce what you'll be paying next year is unique and different for everyone. You need to find what works for you.
Right now, one of our biggest suggestions is to get all of your tax paperwork collected now. This year came with its own brand of unique things that have changed and affected our financial standings. You might have filed for unemployment, lost your job, gained a new job, didn't receive your tax returns until late summer since tax season ended on July 15th, and we've all been given a stimulus check. For a lot of us, all of these things were new. If not that, the entire timeline of getting your taxes completed and refunds received were way off. Even these small, or for some, huge changes can throw off your organization and preparedness for the upcoming tax season. Avoid any headaches when dealing with what's left of 2020, stay prepared, and stay organized.
Right now is the perfect time to make choices and moves to help cut what you owe on your next tax return, and you have just enough time to tie up these last few decisions to make tax paying a little less painful next year.
Look into ways to make those end of the year last-minute tax deductions. Lower your tax bill by giving a little more, all while giving back to your community, helping your company, and more. A great way to add to your deductions is by giving to charity. Make sure, no matter how much you donate, that you keep all of your paperwork and receipts when doing so. You can make your donation count even more when you donate property or stocks instead of cash. According to TurboTax, if you've owned what you're donating for a year or more, you can deduct what the property value is on the day you give the gifts, and you can "avoid paying capital gains tax on the built-up appreciation".
Make donations now to your HSA account and your 401(K). You can contribute to your HSA up to tax day of next year, but you only have until December 31st of this year to contribute to your 401(K). These donations will decrease your taxable income. Plus it's a great investment into yourself.
If you've had a very difficult year financially, and you need to dip into your retirement savings to help you get by and make it through, make sure to do so by the end of the year. Thanks to the CARES Act, according to US News, you can take up to $100,000 out of your retirement savings and not pay the penalties for doing so as long as you take it before Jan 1st. You will also have three years to pay off your withdraw.
Make sure to plan and start saving if you haven't already for what you'll be owning and paying for your taxes in 2020.
Save all documents for deductible items.
Are you a small business owner or are you self employed? You can save a ton of money now by purchasing goods and services for your company. If you are working from home, please make sure to double and triple check all of the things you and are not allowed to write off. For example; some of you, you'll be able to claim your home office if you strictly use it for work.
Make time to meet with us or your tax advisor and dig into your 2020 taxes early to see if they can find any deductions or to cut back this year or other ways to cut down your taxes in the upcoming year. Our advice? When they give you a suggestion, take it!!

There is a lot to do before the end of the year, and we hope these tips and suggestions have gotten you geared up and ready to get started. While it is so easy to just sit back and relax this time of year, we encourage you to get ahead of the game and end this year out strong. We hope you enjoyed the first part of this blog, and we look forward to bringing the second half to you soon. Until now and then, if you have any questions, please don't hesitate to reach out to us! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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Saving a Penny, Sharing a Turkey

11/25/2020

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While we all want to open our arms and our wallets to our loved ones and a big turkey dinner, 2020 might not be the best time to do that. While this might be a hard holiday pill to swallow, it's all going to be okay.

Thanksgiving is in the air, and we know that many of our Goose Creek friends and customers are getting excited to gather with their loved ones to celebrate. While everything is still very up in the air and uncertain, we hope that when choosing to gather with your loved ones this year that you choose to do so safely and with your loved ones in mind. 2020 is the year of smaller Thanksgivings, outdoor gatherings, gatherings with bigger smiles and fewer hugs, and sharing a meal over zoom and FaceTime. This might be a different holiday season for so many reasons, and we are here to support and offer our comfort and condolences. It will look much different in our homes this year too, so we sympathize and understand how many of you are feeling right now.

While the Thanksgiving and Christmas holidays might be different when it comes to how far we can and cannot travel and how many of our loved ones we will be seeing, many of us might be tempted to make it look and feel the same. This is a quick route towards spending way more than is needed right now or ultimately what you actually want to do. Remember, Christmas is just a few short weeks after Thanksgiving, so make sure to spread out all of your holiday budgets wisely. With all of these ideas in mind, we were inspired to write this week's blog. We wanted to share a few tips and suggestions on how to save money through the 2020 holiday season, and what that can mean for you and your loved ones.

TRAVEL BILLS
Many of us won't be traveling for the holidays this year. Instead, we will be staying put and creating new traditions with our bubbles, our close friends, the relatives we live closest to, or just with our nuclear family members. While this is still an incredible way to celebrate the holidays, it can be difficult not to see the whole family or all of your friends during this time of year. The silver lining of all of this? You can save hundreds of dollars by not spending it on plane tickets, hotel rooms, and other travel expenses. You can save money not driving those long distances, save money not having to put a lot of work into your car to make those long drives, and you can also save a little peace of mind not having to worry about driving in the snow or ice when many of us haven't done that in years. Instead, make time to plan Zoom Calls, Facetime Calls, and group phone calls. Save this unused travel money to help pay for the shipping on all of the Christmas presents you have your eyes on for your loved ones, save it for when you can travel to see your family again, or save it to help out with those surprise extra bills that might appear at the end of the year. Don't forget, once we hit January 1, 2021, tax day will be here faster than you might think. Maybe saving a few dollars here and there can help with paying your taxes as well.

TO BLACK FRIDAY OR NO?
Black Friday has already started for a lot of our favorite big box stores with in-store deals, discounts, and online deals. While the big Black Friday shopping might not happen as it has in the past, that doesn't mean that it's going to stop or slow down online Black Friday or Cyber Monday sales. We've mentioned this in previous blogs, but as we all reach for our credit cards to buy everything we come across in our Black Friday shopping sprees and going with our "treat yourself" mentality to make these difficult holidays feel a little bit better, maybe step on the brakes. Trying to avoid these big shopping sprees right now can be a huge benefit to you and your bank account. If you're still planning on shopping, set a spending limit and a budget for yourself. This includes if you are planning to do your holiday shopping on Black Friday or Cyber Monday. Pick who you are shopping for, how much you're going to spend on each person, and stick with it. We know a big Christmas for your loved ones can be a knee jerk reaction to a difficult year, but be financially smart about it. Outside of budgeting your cash flow, make sure that these plans include putting a spending limit on your credit cards. You can come up with every excuse to use your credit cards when your Christmas budget has been depleted, but try and go easy with the plastic. Can you imagine the gift it would be to start 2021 financially stable with little to no outstanding balance on your credit cards? We also recommend that if you are planning to shop big on thanksgiving, try and shop small. Invest in local small businesses, local artists, or creators on websites like Etsy or Redbubble for all of your shopping needs. These are the people that need your Black Friday money more than Walmart or Target. If you're investing in local artists and small businesses, this is an investment in your local community and local economy.

TURKEY TIME
We know that Thanksgiving comes with this beautiful picture of a giant turkey with as many sides and desserts surrounding it that can fit on the table. When having a smaller 2020 Thanksgiving, why put that pressure on your family, yourself, your refrigerator, or your wallet? There is nothing in the rule book that says you have to get a huge 20-pound turkey for the holiday. There are smaller birds available, and the option of only getting half a turkey or just a fantastic cut of a turkey breast is out there too and at a much lower price than your standard turkey. This can help save a ton of money on your initial Thanksgiving grocery bill, and it can also help with your leftover situation. Not everyone is on board with eating Thanksgiving leftovers for days on end. So why buy a ton of food that's just going to go to waste? Also, there is no rule saying that you have to eat turkey for Thanksgiving. If you want to try a different protein, go totally vegetarian or vegan, or just have your favorite fast food to celebrate the day, that's okay too. However, if you end up with a big turkey and a large number of leftovers, it can help save you money on the following week's grocery bill following Turkey day. As you plan your turkey day menu, plan a menu for the week to follow that can reuse as many leftovers as possible. The key is to pick a wide variety of recipes that doesn't make you feel like you're just eating turkey for a week straight.

Also, save on the drinks. Many people who enjoy adult beverages during the holidays might go get some wine or beer for the day. Instead of buying multiple bottles of wine or cases of beer, choose a cocktail or punch to share. If you're going to be preparing a traditional meal, use Costco or Sam's Club to help save money. Also, keep an eye on online deals and coups. Don't forget, if you are hosting a small gathering, a potluck Thanksgiving is a perfect way for everyone invited to save money!

SIMPLE AND CHIC
While the Griswald's would disagree with us, keeping your decorations for Thanksgiving and Christmas on the simpler side can help you save money too. It's tempting because right now every store you walk into is already bursting with Christmas decorations. They might be calling out to you to redo all of your decorations this year, but stick with what you already have. Believe us, this will be a huge money saver and can help reduce your stress and anxiety about decorating the perfect house and home for your in-laws to see this year. Take that pressure off, you're staying safe and saving money by decorating with what you already have!

A LITTLE MORE, A LITTLE LESS
While many of us are still having a hard time adjusting to the fact that Thanksgiving will look different this year, and dealing with being away from our loved ones, we will still have food on our tables. Regardless of it being a big turkey dinner or a pizza, there will be something there. Take some of the extra money you're going to be saving by following these tips and donate to those in need.

PLANNING FOR WHATS NEXT
We know that Turkey Day and Christmas might be what has your full attention is focused on right now. What about the day AFTER Thanksgiving? Just like the day after Halloween and Valentine's day, a lot of Thanksgiving food items will be significantly marked down. Buy the non-perishable items that are on sale and save them for Christmas dinner or help lighten the load in your grocery bills over the next couple of weeks between Thanksgiving and Christmas. While everyone is participating in this year's unique and socially distanced black Friday events, head to the grocery store instead and save big for the next few weeks and beyond.

The great thing about Thanksgiving can be the goals you set for yourself financially, and being able to reach them without stress. This can be your reason for the season and your reason to celebrate without breaking the bank. Enjoy the little things this year, and be ready to financially step into 2021. Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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