Tax Reductions

Those dealing with income taxes only once a year when involved with their own personal tax return often have questions related to tax terminology. The following is a compilation of questions frequently asked by individuals:

What is Filing Status?

2023 brings with it a whole new set of rules related to qualifying for a tax credit for purchasing a used electric vehicle. This is the first time that used electric vehicles have qualified for a tax credit, and although considerably less than the credit for purchasing a new electric vehicle, it does provide an incentive for lower-income taxpayers to acquire an electric vehicle.

Congress has for years used the tax return to provide benefits to taxpayers in need and incentives to stimulate business activities and address environmental issues. So when COVID-19 hit, Congress and many state governments provided tax benefits to help citizens through the pandemic.

The purpose of this article is to get the IRS to owe you money.

Of course, the IRS will not likely cut you a check for this money (although, in the right circumstances, that will happen), but you’ll realize the cash when you pay less in taxes.

To say the least, there’s been plenty of political, financial, and economic activity this year — from rising interest rates to elevated inflation, to ongoing market turmoil.

It's been a rough Fall for the stock market - so much so that you should probably carefully review your portfolio and other capital transactions to minimize gains or maximize losses for the year. Remember, capital gains and losses are not just limited to stock transactions. For example, stock losses can offset the gain from the sale of a rental.

Inflation is seldom a good thing, but when it comes to investing, the U.S. Treasury Department has an inflation opportunity that’s downright amazing. You can buy bonds that pay 9.62 percent interest — tax-deferred — with no downside risk, and with no state or local income taxes when you cash them in.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 which is a scaled-back version of the prior Biden administration proposals originally included in the Build Back Better Act.

During much of 2020 and 2021, you may have qualified for the Employee Retention Credit (ERC). Lawmakers created this tax credit in response to the COVID-19 pandemic.

With the ERC, you found (or could find) tax credits of up to $26,000 per employee. That’s a lot. With 10 employees, that’s $260,000.

If you have been considering installing a solar electric system on your home and taking advantage of the lucrative federal tax credit, time is running out. Unless Congress extends the credit, it will no longer be available after 2023.