Category Archives: Income Tax

  As more and more clients are starting businesses, picking up side consulting gigs or selling crafts online, this post focuses on the tax differences between being an employee vs being self-employed. 1) You are in charge of tracking your income and expenses when you are self-employed. All income is taxable, absent a specific exclusion in the IRS code.  You don’t need to track your income when you are an employee because you receive a W-2 from your employer summarizing your taxable income. WhenRead More

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If you paid for higher education costs in 2013, be sure to speak with your tax preparer to see if you may benefit from this credit. What is it? The American Opportunity Tax Credit (AOTC) modifies the Hope Tax Credit. It allows you to take a tax credit for qualified higher education costs including tuition, certain fees and course materials. See IRS Publication 970 for a complete list. It does not include room & board. How much is it? TheRead More

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Consider a SEP-IRA. A Simplified Employee Pension (SEP) plan is a retirement savings vehicle available to those who are self-employed. This past year, I came across a handful of new clients who were self-employed and not aware of a SEP-IRA and its benefits. The following is a summary focused towards business owners who do not have employees. You can use the SEP-IRA with employees, but I do not go into the details of that below. A SEP-IRA follows the sameRead More

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