With all of the tax work finally finished for the year- whether that was the original spring deadline or just recently completed in mid-October- individuals, businesses, and tax preparers may be tempted to take a big exhale and take a break from thinking about taxes until the new year. However, there are significant benefits to taking [...]
Hi Abe! Who can I claim as a dependent? Great question! In the United States, a dependent is generally an individual who relies on someone else, typically a taxpayer, for financial support. The IRS has specific criteria that determine whether someone can be claimed as dependent on a taxpayer’s federal income tax return. They must be [...]
Whether you are planning to start a family or have children and want to reevaluate your spending, it’s important to plan for the expenses of having children. According to CBS news, the cost of raising a child from birth to 18 is nearly $240,000 BEFORE college. That’s a yearly average of $13,000 - $14,000 per child. [...]
Let's talk about retirement savings without all the confusing financial jargon. You've probably heard about pre-tax and after-tax contributions, but what do they really mean for you? First, pretax contributions are like tax breaks for the future. Imagine you have a special savings account for your retirement, like a 401(k). When you put money into this [...]
In the world of accounting, a question that frequently crosses the minds of business owners is: ”What expenses can I deduct?” This question is entirely justified because accountants seldom encounter clients who willingly want to pay more taxes than necessary. It’s crucial to understand that the deductibility of expenses directly impacts a business’s profitability, and profitability, [...]
Hi Abe! I have a TON of receipts on the truck I am keeping as an independent contractor. What are the IRS rules regarding keeping receipts? Abe says: There are a few things to keep in mind when keeping a record of your expenses for your business. First, you must keep receipts for anything ordinary and [...]
Do you feel lucky? Have you ever purchased a lottery ticket, scratch off, or gambled in a casino? Many Americans have. According to the National Council on Gambling, approximately 85% of all US adults have gambled at least once in their lives. Taxpayers need to know the tax implications that comes when you hit the jackpot. [...]
Hi Abe, How much should I be saving for my quarterly taxes? I’m glad you’re thinking ahead! It’s recommended for independent contractors to save between 20-30% of your Net Profit for both state and federal taxes. As a reminder, your Net Profit is the difference between your Gross Revenue and your business expenses. This is an [...]
Why You May Have Received a Letter From the IRS We have noticed an influx of clients receiving tax notices now that the April deadline has passed and 2022 returns are being processed by the IRS. Receiving a letter from the IRS can be intimidating and can lead to many questions. At Abacus, we are here [...]
Preserve your right to work! What states can do to prevent you from driving. If you owe and do not file your taxes, the IRS can garnish your wages and you can LOSE your license to drive. Abacus CPAs has researched and found that different states have their own laws regarding tax debt amounts and the [...]
