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ACCOUNTANT, TAX & REALTOR SOURCE INC.

Subtitle

Tips & News

TIPS

  • Owe taxes?  Increase  your retirement contributions to decrease your pretaxed income.
  • Check your refund status, figure how much to have deducted from your W4, and many other government related tax issues by checking the IRS link listed on our website or go to www.irs.gov
  • Build tax minimizing strategies:  purchase a home, purchase investment properties, create small businesses, open self-controlled retirement accounts, etc.
  • Business Owners - keep records of all income/expense documents. 
  • Maximize Refund money


South Carolina Tax Credits

Subsistence Allowance

Police and all commissioned law enforcement officers paid by South Carolina municipal, county, state governments or the federal government, full-time fire fighters, and full-time emergency medical service personnel are entitled to subsistence allowances of $8.00 per regular workday. Your employer should provide you with the number of work days.


Maximize Retirement Contribution -

Employees and Self Employed


Certain Nontaxable National Guard or Reserve Pay

Income received from National Guard or Reserve members for customary annual training, weekend drills and other inactive duty training is generally exempt from South Carolina income tax.

Members of the National Guard or Reserves may:


    • Deduct all inactive duty pay from the United States or any state for weekend drills and other inactive duty training actually attended.
    • Deduct up to 15 days of customary annual training pay, also referred to as "active duty training" or "ADT".
    • Inactive duty Reserve members may also deduct up to 14 days of customary annual training pay, also referred to as "active duty training" or "ADT" plus up to 2 days of travel time listed on official orders.
    • Full time Active Guard and Reserve (AGR) employees may deduct up to 15 days of annual training actually attended and up to 24 days of weekend drills (a maximum of 39 days) at the daily rate of pay.

    • IL K1-12 school age dependents state tuition credit.
    • Funeral expenses are only deductible when paid from an Estate.
    • Bankruptcy fees/expenses are normally not deductible (exceptions apply).


Financial Strategies:


DO: Pay off credit card or installment debt and free up monthly income to start a rainy day fund

  • Pay off small credit card or installment debt balances first to free up disposable income to pay larger balances (this is the way to begin financial freedom)
  • Save an emergency fund ( 3-6 months income)
  • Pay off all Installment debt
  • Open a retirement account
  • Purchase a home or investment property or pay off home
  • Educational fund for your children
  • Start a Business (Profit or Non-profit)
  • Invest in stock market (become a knowledgeable investor first)


DON'T:  Spend $$$$ on things that don't/won't bring you a return


MAKE YOUR MONEY WORK FOR YOU!

 
 

IMPORTANT TAX NEWS

*Tax Season starts 2/12/2021
1.  Upload tax docs to your secured client portal -CONTACTLESS
2,  Drop off tax docs
3,  Schedule face to face appt

*Employers & Self-Employed tax credits due to COVID-19

*Unemployment Income is taxable by Fed and State


*Recovery Rebate

You may be able to claim the Recovery Rebate Credit if:

1) You are eligible but were not issued an Economic Impact Payment, or

2) Your Economic Impact Payment was less than $1,200 ($2,400 if married filing a joint return) plus $500 for each qualifying child you had in 2020.

* Generally, this credit will increase the amount of your tax refund or lower the amount of the tax you owe.


*$300 monetary charitable contribution deduction available to everyone who donated


*Home Office Deduction

To claim the deduction, a taxpayer must use part of their home for one of the following:

  • Exclusively and regularly as a principal place of business for a trade or business
  • Exclusively and regularly as a place where patients, clients or customers are met in the normal course of a trade or business
  • As a separate structure that's not attached to a home that is used exclusively and regularly in connection with a trade or business
  • On a regular basis for storage of inventory or product samples used in a trade or business of selling products at retail or wholesale
  • For rental use
  • As a daycare facility 
  • Deductible expenses for business use of home normally include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs. In general, a taxpayer may not deduct expenses for the parts of their home not used for business; for example, expenses for lawn care or painting a room not used for business.

   *Sch C, E & F filers can deduct 20% from gross income if they meet certain conditions. QBI


   *Penalty for not having health insurance has been eliminated.


   *Employees can contribute up to $19,000-$25,000 to their 401k (great way to reduce pre-taxed income)


*Self Employed (SEP) contribution max $57,000 - $64,400 (age dependent)


   *Unreimbursed employee expenses are no longer deductible unless active military order. 


  *Only 1099 income filers are able to deduct expenses incurred to produce the 1099 income. 1099-NEC replaces 1099-MISC


   *New 1040-SR form for seniors (65+) no income limits.


   *Alimony no longer taxable or deductible for divorces finalized after 1/1/2019

  

   *Double standard deduction

   *Personal exemptions removed.


More SC Tax Credits......... 
Tax Credits- What's New
https://dor.sc.gov/taxcredits


Contact us for details....


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BUDGETING


More Month Than Money?

Budgeting:

    1. Do a comparison at month's end of what you budgeted versus what you actually spent in step 2
    2. Create an emergency fund (start with $1,000 and build at least 3-6 months)
    3. Pay off debt
    4. Maximize retirement investments
    5. Fund college funds (if necessary)
    6. Pay off the home mortgage
    7. Build wealth