Tax Tips
Tax Credits
Subtract tax credits from the amount of tax you owe.
There are various tax credits allowed by IRS which will reduce your tax like:
Homeowners Credit, Education Credit, Earned Income Credit, Child Care Credit, Other Dependent Credit, Retirement Savings Credit
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Mileage Deductions
If you use your vehicle for business, you can deduct your auto miles based on the IRS rates. You must keep a log of all of your business miles,
There are apps that can help you with this documentation. For more information on transportation, expenses see IRS Publication 463.
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Tax Withholding and Estimated Tax Payment
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Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments.
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Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. Consider completing a new Form W-4 each year and when your personal or financial situation changes.
Who Must Pay Estimated Tax
Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
To figure your estimated tax, you must figure your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year.
We can assist you in for Tax Withholding and Estimated Tax Payment
Please call us @ 847-877-6296 for assistance.
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FBAR and FATCA Regulations
Foreign Income Reporting
Many United States (U.S.) citizens and resident aliens receive income from foreign sources.
If you are a U.S. citizen or resident alien, you must report income from all sources within and outside of the U.S. You can claim Foreign Tax Credit for the taxes you paid to other country.
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Foreign Financial Accounts
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In addition to reporting your worldwide income, you must also report on your U.S. tax return whether you have any foreign bank or investment accounts.
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Individuals and domestic entities must check the requirements and relevant reporting thresholds of each form and determine if they should file Form 8938 or FinCEN Form 114, or both.
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Please click here to find who must file?
Early IRA Distributions
Early IRA Distributions are generally subject to a 10% penalty in addition to normal Federal and State Income Tax (retirement distributions are not taxable in Illinois but this varies in other states). The Distribution can also affect deductions and credits due to having higher income. We can prepare a tax estimate for your tax return liability to get a better idea of the impact of an IRA distribution.
The following links can provide more information including exceptions for 10% penalty.
https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-distributions-withdrawals
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