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Information provided on this page is informational only. Nothing posted here should be considered investment advice. Please review your financial situation with a qualified financial professional before taking action. For more information please see our disclosure.

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Tax Surprise Coming to Many in January 2023: Changes to Form 1099-K Reporting

If you use Venmo, Cash App, PayPal, eBay, etc., to send or receive payments, this may apply to you! U.S. tax law states that “gross income is ALL income received from whatever source derived.” Some people are under the false impression that if you do not receive a Form 1099 or federal W-2 form, you do not need to report the income. That is a dangerous perception, considering the severity of tax penalties for knowingly underreporting your income to the Internal Revenue Service (IRS). The “tax gap” in the U.S., defined as the difference in the taxes owed versus the taxes that were paid, was estimated at over $600 billion in 2020. The IRS has taken steps to reduce the tax gap, and one way is by reducing the threshold at which businesses and individuals must file Form 1099-K to report payments.

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Big Social Security Jump in 2023 — How This Impacts Retiree Tax Planning

One topic that has continually come up this year is inflation. Even though the Federal Reserve has been aggressively raising interest rates, so far, doing so has not produced much of an impact on this painfully persistent rise in prices. Inflation has been challenging for working individuals, but it has been especially burdensome for many retirees who live off a fixed income. One of the primary sources of income for many retirees is Social Security. A major benefit of Social Security compared to many other pensions is that it comes with a built-in yearly cost-of-living adjustment. This is one of the main reasons why we are generally proponents of delaying Social Security as long as possible—to the maximum of age 70. This is because the increased benefit for delaying is included in the inflation adjustment when it is calculated.

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Massachusetts 62F Refund Alert

An obscure law in Massachusetts called Chapter 62F, enacted by voters in 1986 and only used once since then, allows for taxpayers to receive a credit if total tax revenues in a given year exceed an annual cap tied to wage and salary growth in Massachusetts. For tax year 2021, this amount was $2.941 billion, and this entire sum will be returned to Massachusetts taxpayers. Massachusetts estimates that more than three million Massachusetts taxpayers will be eligible for this special refund.

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Inflation on Your Taxes? How Inflation May Increase Your Taxes in 2022 and Beyond

Death, taxes, and inflation: three financial topics people generally like to bury their head in the sand about and pretend don’t exist. As financial planners, much of our job is helping our clients handle these tough topics, and luckily (or unluckily) for anyone reading this post, we’ll be touching on all three. Inflation has been top of mind for most people these days. It’s hard to look at prices anywhere and not see the impact of inflation. But one place where we may not see the effects of inflation directly is in our taxes paid. The perception of many working individuals is that taxes paid from their paycheck go into some void, and when they file their taxes in the spring, they either receive a refund or owe some money. There is little thought or analysis as to how or why the numbers end up as they do.

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What to Do if You Contribute Too Much to an HSA, Roth IRA or 401(k)

It is common for individuals to make excess contributions to health savings accounts, Roth IRAs, 401(k)s, 403(b)s and 457(b)s. So common, in fact, that the IRS has a lenient policy for removing these excess contributions to avoid most penalties. So, if you discover that you’ve made an excess contribution to any of these account types, don’t worry, because there is a way to fix it. Note: For purposes of this article the tax filing deadlines are noted as April 15th and October 15th even though the exact days in these two months may vary from year to year.

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2021 Is No Normal Tax Year – Some Changes That May Impact You When Filing Your Return

It’s that time of year again when CPAs are locked in dark rooms crunching numbers on a laundry list of IRS forms and ordinary citizens scramble to gather their appropriate tax forms before the ever-looming tax deadline. Tax time tends to be exceptionally stressful for most people. To complicate things further, since the pandemic began in 2020, like everything else, we really haven’t had a “normal” tax season. While tax laws are always changing, there have been numerous special temporary tax provisions to try and alleviate some of the financial burdens of the pandemic. Like 2020, there are a variety of special tax rules for filing your taxes for 2021. Here’s what you should know about your 2021 tax return so that you don’t overpay your taxes this year.

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Financial Planning for Unmarried Couples

Financial and tax planning advice is relatively easy to find online for married couples and single individuals. However, according to the U.S. census, about 8% of adults live with an unmarried partner. When you are living with a long-term partner, you may think of yourself as married for most purposes, but the law treats you very differently than it does a married couple. It is important to understand these differences, as they can have a dramatic impact on your lifetime taxes paid. It used to be that if you were LGBTQ+ and in a relationship, you were going to be an unmarried couple, as the federal government did not recognize same-sex marriage. This all changed in 2015, when gay marriage was made legal by a Supreme Court decision. However, many LGBTQ+ couples were long disgusted by the lack of marriage equity and chose to remain unmarried even after the court decision. This means there are still many unmarried LGBTQ+ couples.

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Last-Minute Tax Planning for 2021

Where has the time gone? Another year came and went. Although we are beginning to draw the curtain on 2021, that does not mean there aren’t some last-minute tax planning considerations before we close out the year. With the clock winding down, there are some final tax moves you should consider before year-end. However, for others, you may have until early 2022, or even the tax filing deadline, to make final decisions that will impact your taxes in 2021. Here are some things to review before the year is out.

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The Importance of Retirement Tax Planning – Why Tax Planning in Retirement Is Just as Important as When You’re Working

In financial media, there is significant chatter about saving for retirement and utilizing ways to reduce your taxable income during your working years. But what often gets neglected are the discussions surrounding taxes in retirement, which, in many cases, are even more complex than when you’re working. With Medicare premium surcharges, Social Security brackets, estate taxes, required minimum distributions, and withdrawal decisions from tax-deferred, tax-free, and taxable accounts, juggling all these different items can be incredibly challenging.

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Generosity: Making Tax-Efficient Gifts to Individuals

What makes people happy, content and fulfilled? More money and more stuff can give a temporary boost to someone’s mood, but it can’t make them truly happy. Financial contentment is understanding that money and things are not what provide fulfillment. What makes most people happy is having a sense of purpose, having a sense of contentment, spending time with family and friends, and making a difference in the world. Today we are going to discuss why you should give—and how to give—to individuals in a tax-efficient way.

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