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Taxpayers should be on the lookout for new version of SSN scam

10/29/2019

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Taxpayers should be on the lookout for new variations of tax-related scams. In the latest twist on a scam related to Social Security numbers, scammers claim to be able to suspend or cancel the victim’s SSN. It’s yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails.

Scammers may mention overdue taxes in addition to threatening to cancel the person’s SSN. If taxpayers receive a call threatening to suspend their SSN for an unpaid tax bill, they should just hang up.

Make no mistake…it’s a scam.

Taxpayers should not give out sensitive information over the phone unless they are positive they know the caller is legitimate. When in doubt –hang up. Here are some telltale signs of this scam. The IRS and its authorized private collection agencies will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, iTunes gift card or wire transfer. The IRS does not use these methods for tax payments.
  • Ask a taxpayer to make a payment to a person or organization other than the U.S. Treasury.
  • Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demand taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

Taxpayers who don’t owe taxes and have no reason to think they do should:
  • Report the call to the Treasury Inspector General for Tax Administration.
  • Report the caller ID and callback number to the IRS by sending it to phishing@irs.gov. The taxpayer should write “IRS Phone Scam” in the subject line.
  • Report the call to the Federal Trade Commission. When reporting it, they should add “IRS Phone Scam” in the notes.

Taxpayers who owe tax or think they do should:
  • View tax account information online at IRS.gov to see the actual amount owed and review their payment options.
  • Call the number on the billing notice
  • Call the IRS at 800-829-1040.

More information:
Tax Scams and Consumer Alerts

​
"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-372

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Donating to Charities? Do it RIGHT!

10/28/2019

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Donation basics to ensure a tax deduction

Donating to charity not only helps others, it can reduce your tax bill - but only if the charity qualifies as a tax-exempt organization.
 
Checking for qualified status
If you plan on itemizing your deductions on your tax return, make sure the organization you're donating to is designated by the IRS as a 501(c)(3) organization in good standing.
 
You can find a list qualified 501(c)(3) organizations on the IRS website. Remember, even last year's qualified organizations could lose their non-profit status if they do not submit their annual tax filing!
 
Is it a good charity?
Ensuring a tax-exempt status is not your only step. You should also conduct research on your charitable organization. There are many websites that evaluate organizations, how they spend their funds, and how efficient your donation is being used. So check out your charities on sites such as Charity Navigator, Charity Watch and BBB Wise Giving Alliance.
 
Get your documentation right
Here are a few other key requirements if you want to deduct your charitable donations:

  • Keep good records. The tax law imposes strict recordkeeping requirements. Notably, for monetary gifts of $250 or more, you must obtain a written acknowledgment from the charity (with specifics) before you file your return.
  • Understand rules around quid pro contributions. If you receive a benefit in return for your donation (e.g., dinner at a fundraiser), your deduction is limited to the difference between the donation amount and the value of the benefit. Obtain substantiation from the charity.
  • Know the annual limit. Under the recent legislation, the annual deduction for monetary contributions is currently limited to 60% of your adjusted gross income (AGI), up from 50%. Stay below this threshold.
  • Follow property rules. Besides a 30%-of-AGI limit for gifts of appreciated property, other special rules may apply. For instance, you must ensure that the property is used to further the 501(c)(3) organization's tax-exempt mission. If you donate property valued at more than $5,000, obtain an independent appraisal.
 
You may be able to reduce your tax liability by boosting your donations late in the year and pushing your total itemized deductions amount over the standard deduction threshold ($12,000 single/$24,000 joint).

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

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Tax treatment for family members working in the family business

10/23/2019

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​One of the advantages of someone running their own business is hiring family members. But when including family members in business operations, certain tax treatments and employment tax rules apply. Here are some facts to know when working with a spouse, parent or child.

Both spouses carrying on the trade or business
If spouses carry on a business together and share in the profits and losses, they may be partners whether or not they have a formal partnership agreement. If so, they should report income or loss from the business on Form 1065. They should not report the income on a Schedule C (Form 1040) in the name of one spouse as a sole proprietor. But, the spouses can elect not to treat the joint venture as a partnership by making a qualified joint venture election. 

Qualified joint venture Spouses may elect treatment as a qualified joint venture instead of a partnership. A qualified joint venture conducts a trade or business where:

  • The only members are a married couple who file a joint return,
  • Both spouses materially participate in the trade or business, and
  • Both spouses elect not to be treated as a partnership.

Only businesses owned and operated by spouses as co-owners and not in the name of a state law entity, such as a limited partnership or limited liability company, are eligible for the qualified joint venture election. Find more information on joint ventures in Publication 541, Partnerships.

Spouses electing qualified joint venture status are sole proprietors for federal tax purposes. Each spouse must file a separate Schedule C to report their share of profits and losses. They don’t need an EIN unless their sole proprietorship must file excise, employment, alcohol, tobacco or firearms returns. One spouse cannot continue to use the partnership’s Employer Identification Number (EIN) for the qualified joint venture. The EIN must stay with the partnership; it’s used by the partnership for any year in which the business doesn’t meet qualified joint venture requirements.

Employment taxes If the business has employees, either of the spouses as sole proprietors may report and pay the employment taxes. The spouse, as an employer, must have an EIN for their sole proprietorship. If the business filed or paid employment taxes for part of the year under the partnership's EIN, the spouse may be considered the employee’s “successor employer” for purposes of figuring whether wages reached the Social Security and federal unemployment wage base limits.
 
One spouse employed by another. The wages for the services of an individual who works for their spouse are subject to income tax withholding and Social Security and Medicare taxes but not to the Federal Unemployment Tax Act (FUTA).

​Child employed by parents. Payments for the services of a child under age 18 aren’t subject to Social Security and Medicare taxes, if the business is a sole proprietorship or a partnership in which each partner is a parent of the child. Payments to a child under age 21 aren’t subject to FUTA. Payments are subject to income tax withholding, regardless of the child’s age.

Payments for the services of a child are subject to income tax withholding as well as Social Security, Medicare and FUTA taxes if they work for:

  • A corporation, even if it’s controlled by the child's parent, or
  • A partnership, even if the child's parent is a partner, unless each partner is a parent of the child.

Parent employed by child. The wages for the services of a parent employed by their child are subject to income tax withholding and Social Security and Medicare taxes. They’re not subject to FUTA tax.

Employees complete Form W-4 so that their employer can withhold the correct federal income tax from their pay. The IRS encourages everyone to use the Tax Withholding Estimator to help them make sure they have the right amount of tax withheld from their paycheck. The estimator automatically links to Form W-4, Employee’s Withholding Allowance Certificate, which they can then fill out and submit to their employer.

More information:
  • Election for Married Couples Unincorporated Businesses
  • Publication 334, Tax Guide for Small Business
  • Publication 15, Circular E, Employer Tax Guide
  • Publication 51, Circular A, Agricultural Employer’s Tax Guide
  • Publication 541, Partnerships

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

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Taxpayers can follow these steps after a disaster to reconstruct records

10/22/2019

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After a natural disaster, taxpayers may need records to help them prove their disaster-related losses. This may be for tax purposes, getting federal assistance or insurance reimbursement. 

In many cases, these records may have been destroyed in the disaster. However, not all hope is lost as people can often reconstruct records or get copies of important documents after a disaster.

Tax return transcripts
Taxpayers can get free tax return transcripts by using Get Transcript on IRS.gov. They can also call 800-908-9946 to order them.

Financial statements
People can gather past statements from their credit card company or bank. This helps if they bought items using a credit or debit card. If paper records were destroyed, statements may be available online. People can also contact their bank to get hard copies of these statements.

Property records
  • To get copies of documents related to property, home owners can contact the title company, escrow company, or bank that handled the purchase of their home or other property.
  • Taxpayers who made home improvements should get in touch with the contractors who did the work. They can ask the contractor for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
  • For inherited property, taxpayers can check court records for probate values. If a trust or estate existed, the taxpayer can contact the attorney who handled the trust.
  • When no other records are available, taxpayers can check the county assessor’s office for old records that might address the value of the property.
  • Car owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. These include Kelley’s Blue Book, the National Automobile Dealers Association and Edmunds.

More Information:
Publication 547, Casualties, Disasters, and Thefts
Publication 584, Casualty, Disaster, and Theft Loss Workbook
Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook
Publication 2194, Disaster Resource Guide for Individuals and Businesses
Small Business Administration
DisasterAssistance.gov

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

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Cash In - 0% Capital Gains Tax Rate

10/21/2019

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While the maximum capital gain tax rate can be as high as 23.8 percent, most taxpayers pay 15 percent. But there is the possibility to have your capital gains go tax-free; zero percent! In fact, this tax break has been around for more than a decade and comes into play more often than you may think. Here is what you should know:
 
Qualifying for 0% capital gains rate
You qualify for preferential long-term gain treatment if you sell stocks, bonds or real estate (and other capital assets) you've owned longer than a year.
 
For 2019, the zero percent rate applies to long-term capital gains for single taxpayers with taxable income up to $39,375 and married filing joint taxpayers up to $78,750. This often applies if you're having a low income tax year due to:

  • Temporary job loss
  • A tax loss passed through to you from an S corporation or partnership
  • Income fluctuation for a commission-based job
  • Retirement
  • Moving to part-time employment 

Awareness is the key
While you may not typically have the zero capital gain tax rate available to you, it is important to note when it comes into play.
 
Here's an example: Adam and Eve Johnson recently retire. They have a number of mutual funds they've owned for years and have retirement savings accounts. Their current income is $58,700. Should they withdraw money from a retirement account or sell some of their mutual funds? Because they're aware of the zero percent capital gains, they decide to sell mutual funds with long-term capital gains of $20,000 this year to get the money tax free!
 
Consider your year-end tax moves
So, keep the zero percent capital gains rate in mind as the year winds down. Know your projected income for the year and depending on your situation, you might realize capital gains that are subject to no or lower tax rates. Remember other factors often come into play, including the taxability of Social Security Benefits, so call if you would like a review of your situation.

​"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
​
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Taxpayers can compare eligibility and benefits of two education credits

10/17/2019

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There are two education credits that can help taxpayers with higher education costs: the American opportunity tax credit and the lifetime learning credit. There are several differences and some similarities between them. Taxpayers can claim both benefits on the same return, but not for the same student or same qualified expenses.

Here’s a comparison of these two credits:


What is the maximum credit or benefit?
American opportunity tax credit: Up to $2,5000 credit per eligible student
Lifetime learning credit: Up to $2,000 credit per tax return


Is it refundable or non-refundable?
American opportunity credit: Refundable for up to 40 percent of credit
Lifetime learning credit: Not refundable


Can taxpayers claim the credit if they file with the filing status married filing separately?
Both credits: No


What is the limit on maximum adjusted gross income for the other filing statuses?
American opportunity credit: Married filing joint: $180,000 Other statuses: $90,000
Lifetime learning credit: Married filing joint: $136,000 Other statuses: $68,000


Can a taxpayer claim credit if they be claimed as a dependent on someone else’s tax return?
Both credits: No


Must the taxpayer or their spouse be a US citizen or resident alien?
Both credits: Yes, unless nonresident alien is treated as resident alien for tax purposes.


What is the number of tax years for which the credit is available?
American opportunity credit: Four tax years per eligible student
Lifetime learning credit: Unlimited


What type of program is required?
American opportunity credit: Student must be pursuing degree or other recognized education credential
Lifetime learning credit: Student doesn’t need to be pursuing degree or other recognized education credential


What is the number of courses for which the credit is available?
American opportunity credit: Must be enrolled at least half time for at least one academic period in 2019
Lifetime learning credit: Available for one or more courses


What qualified expenses does the credit cover?
American opportunity credit: Tuition, required enrollment fees, course materials
Lifetime learning credit: Tuition and fees required for enrollment and attendance


For whom can the taxpayer claim the credit?
Both credits: the taxpayer, their spouse, or a student they claim as a dependent on their tax return


Who must pay the qualified expenses? 
Both credits: the taxpayer, their spouse, the student, or a third party


"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527

Phone (630) 320-3720



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Social Security Planning Starts Now.   Even those in their 20s should review this tip!

10/14/2019

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Although you won't become eligible for Social Security until your 60s, there's a lot you can do to prepare before then. Here's a rundown of steps you can take during each decade of your life:

  • In your 20s: If you're like a lot of people, you're embarking on a career. At this point, there's no guarantee that Social Security will be around in its current form when you're ready to retire. The smart move is to build up retirement savings on your own. For instance, you should be participating in a 401(k) or other qualified plan at work. If done, Social Security benefits will be a pleasant surprise when you retire.
 
  • In your 30s: As you continue make retirement contributions, begin checking on your Social Security wage history. Go to the Social Security Administration (SSA) website to set up and review your account. Eventually, benefits will be based on your work history. Make sure your wages are being reported correctly and correct any errors that occur. As the same time, increase retirement plan contributions.
 
  • In your 40s: Typically, this is a time when your earnings increase significantly. Be aware of the key rules relating to Social Security benefits. For example, realize that the SSA uses your average earnings for the 35 highest-earning years to calculate your payments in retirement. So keep track of this and continue to have lower income years be replaced with higher income years. This will result in higher benefit checks when you retire.
 
  • In your 50s: Circle a target date for retirement. While not etched in stone, is allows you to analyze whether you'll be able to sustain your current lifestyle based on your expected income and expenses. This exercise is more important if you're considering early retirement. Continue to check income being reported to the SSA and create a forecast for the future. If you wait until your 60s to begin this planning process, it may be too late to save enough to meet your retirement goals.
 
  • In your 60s: Decide whether you want to begin taking benefits at age 62 (the earliest age), full retirement age (or age 70), or somewhere in between. The longer you wait, the greater your monthly benefits, but you're giving up use of the money. Factor in aspects like your health, plan payouts, required minimum distributions and other earnings. Finally, remember that up to 85% of Social Security benefits are taxable, so it's worth planning now!

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
​

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Understanding Tax Terms: Health Savings Accounts (HSA)

10/7/2019

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If Benjamin Franklin were alive today, his famous quote "Nothing is certain, except death and taxes." might include a third item - paying medical expenses. Medical expenses, in one form or another, are unavoidable. Fortunately a health savings account (HSA) is a great way to cut your spending on medical expenses.

A major tax break

If you have a high deductible health insurance plan (deductible of at least $1,350 for an individual or $2,700 for a family), you can add an HSA to pay for medical expenses with pre-tax income. Contributions to an HSA can be made via payroll deduction or directly to the account and deducted as an adjustment on your tax return. This approach effectively reduces your medical bills by as much as 37 percent!

Tips to maximize your HSA
​

Once your HSA is established, here are three simple ideas you can use to take full advantage of this great tax-savings vehicle:
​
  • Maximize your HSA contributions every year. Set an annual goal to contribute the full amount allowable by the IRS into your HSA. Unlike other funds, HSA contributions do not have to be spent each year. Unused balances can remain in the account, giving you a great way to build up a nice emergency fund over the years. The 2019 total contribution limits are $3,500 for single taxpayers and $7,000 for a family (add $1,000 if you are 55 or older). You have until April 15 of the next year to make contributions, but when figuring out how much to contribute, remember to include contributions by your employer in your total.
 
  • Pay for all medical expenses with your HSA. Typically you can pay for medical expenses directly from your HSA account via a debit card. If not, track all payments you make for medical expenses and take matching distributions from your HSA. If you don't have enough in your HSA to cover an expense, make a contribution to your HSA first and then pay the bill. Keep ALL your medical bills and receipts to prove that the distributions are for qualified medical expenses.
 
  • Prioritize HSA contributions. HSA contributions are tax-deductible and distributions are tax-free (for qualified medical expenses). Traditional IRA distributions, on the other hand, are taxable.

Knowing you will always have medical expenses, prioritize your HSA contributions to take advantage of its additional tax benefits.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
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What teachers should know about deducting out-of-pocket classroom expenses

10/2/2019

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Now that fall is here and school has started, many teachers are dipping into their own pockets to buy classroom supplies. Doing this throughout the year can add up fast. Fortunately, eligible educators may be able to defray qualified expenses they paid in 2019 when they file their tax return in 2020.

Educators who work in schools may qualify to deduct up to $250 of unreimbursed expenses. That amount goes up to $500 if two qualified educators are married and file a joint return. However, neither spouse can deduct more than $250 of his or her qualified expenses when they file.

Taxpayers qualify for this deduction if they:

  • Teach any grade from kindergarten through twelfth grade. 
  • Are a teacher, instructor, counselor, principal or aide.
  • Work at least 900 hours during the school year.
  • Work in a school that provides elementary or secondary education.

Qualified expenses include:

  • Professional development courses.
  • Books.
  • Supplies.
  • Computer equipment including related software and services.
  • Supplementary materials.
  • Athletic supplies only for health and physical education.

Eligible taxpayers can claim this deduction when they file their taxes. The IRS encourages teachers to consider using tax software to help guide them through the process of claiming the deduction.
Many teachers may qualify to use online software for free with IRS Free File.

More information:
Topic No. 458 Educator Expense Deduction

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

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Phone: (630) 320-3720

Monarch Accounting Group Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527-7836
Email: Info@MonarchAccountingGroup.com


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