Easiest Way to Reduce Your Tax Liability

No one wants to pay more taxes than what is required by law. There is one piece of advice that can apply to most working taxpayers, is to increase pre-tax retirement contributions. Increasing contributions to a pre-tax 401K, simple IRA, or traditional IRA reduces the income that is subject to federal and state income tax. The maximum employee contribution for …

Depreciation

Depreciation is a non-cash expense that reduces the value of an asset. A fixed asset, also known as a capital asset, is a large cost item such as a vehicle, real estate, equipment, or office furniture. As a result of wear and tear, the asset loses value over the period of its useful life. If an asset does not lose …

Common Tax Forms to Expect in the Mail

At the end of January and the beginning of February your mailbox will soon be inundated with envelopes containing tax documents. With the tax code so complicated, which forms are important? To keep it simple, anything that says “Tax Form” or “For Tax Purposes” should all be retained. It is best to have too much information than to destroy a …

Self-Employed Health Insurance Deduction

In a nutshell, this deduction allows self-employed folks (sole proprietors, partners, and S-Corporation shareholders) to deduct up to 100% of health, dental, and long term care insurance premiums for themselves, spouses, and dependents. The deduction is limited to profitability, therefore the deduction can never exceed the profit from self-employed activity. Main requirements: You weren’t eligible for another health plan (no …