Stocks and long-term investments are staple of the American economy and retirement strategy. So how are they taxed? This answer can depend on a few answers from the holding account to how long they were owned. We’ll explore a few of the options and rates below. The first example is to know the rates for 2019, which are based on a progressive tax rate depending on the income. Starting in 2019 there will only be three tax rates for long-term capital gains. Now in order to qualify for the long-term capital gains rate, note that the investment must have been held for over 365 days. If the investment has not been held that long it will be taxed at the corresponding ordinary income tax rate.

Many people were aware that the Tax Cuts and Jobs Act implemented and changed various tax codes, one of which is the famous 529 plan. The TCJA created a change that allowed for 529 plans to be applied to private K-12 schooling as well as higher education (with a limit to 10k per student). But there remains a question, is it truly that easy? This is a question that has been popping up recently because 529 plans are not only a federal plan, they are directly affected by what the state plan allows. You see the way a 529 plan works is that money part of the plan is not taxed by the IRS because the plan is used only for approved education. So the states were left scrambling to decide if they

In the previous segment we brushed up on common mistakes to avoid while filing taxes. With the IRS back up and running at full force it’s time for taxpayers to gather their receipts and W-2s so they can prepare to file. Previously, we mentioned the new tax credit and filing under the wrong status, but there are many more mistakes to avoid that may allow you to maximize your refund. First, and this is important, do not file without important documents. Be sure to have all your W-2s from every employer, 1099s from other sources of income, and documents that support credits or deductions (paid preparers look to previous blogs for new due diligence requirements regarding filing). You file yo

Its 2019, the government has reopened, and the IRS is running at full capacity, guess what that means? Time to prepare your taxes and hopefully get the refund you deserve. However, in order to maximize your potential refund, there are some potential tax mistakes you should be avoiding. First, be sure not to miss the new credit. There is a new credit that is applied strictly for dependents that has been introduced by the new tax law. This is a nonrefundable tax credit worth up to $500 for each qualifying dependent and begins to phase out at $200,000 in adjusted gross income or $400,000 for joint filers. Any dependent must have made less than $4,150 in gross income last year, and filer mu

The partial government shutdown is over, which means the workers that were currently in the wings waiting to continue their work, may return. For those of you looking for your tax refunds, this means that the IRS employees are able to come back to work. Initially, 88% of IRS employees had been furloughed after the start of the partial government shutdown that began back on December 22, 2018. With growing fears of slowed productivity and tax refunds, the IRS issued a new plan in January, calling for 57% of IRS employees to work during tax season. Once the new temporary measure was passed to allow workers to return, all the IRS workers have returned. Still questions remain on how the IRS wi

The IRS has finalized proposed regulations under IRC Sec. 6695(g), but what does this mean for paid tax preparers? A lot and a little depending on your preparedness as a tax preparer. The changes in the regulations are centered around due-diligence requirements and the penalties for noncompliance for misfiling or misusing credits. Three of the main credits are the earned income tax credit, the child tax credit, and the American opportunity tax credit. Each of these can be applied by meeting the criteria, but apparently in years past, some preparers have been fudging the numbers and requirements allowing people filing to have credits available that should have been restricted. Additionally