you need to know this Archives – Michele Cagan, CPA

Tax FAQ for Tax Year 2020

04/13/2021
Single Mom CPA, small business, taxes, you need to know this

Q: When are my taxes due? A: May 17, 2021 is the due date for individual tax returns – Form 1040 – and making 2020 income tax payments. But there are other due dates you may need to know too: April 15: 1st estimated tax payment for 2021 April 15: income tax return for C corporations Q: Is my stimulus payment taxable? A: NO! Your stimulus payments (officially called Economic Impact Payments, or EIPs) are not taxable. Q: Why did my tax preparer/tax software ask how much I got for stimulus payments? A: Even though the EIPs aren’t taxable, they…

How Freelancers, 1099 Workers, and Self-Employed Can Deduct 20% of Business Income

04/03/2021
Do Your Own Taxes, Owning Your Own Business, Single Mom CPA, small business, taxes, you need to know this

Did you know that you can deduct 20% of your business income on your personal tax return? You can, thanks to the Tax Cut and Jobs Act (TCJA). The TCJA brought a lot of tax changes for small business owners. And if you're self-employed, a freelancer, contractor, or had any 1099 income - even from a side gig - that includes you. The biggest tax change: A 20% deduction on self-employed business income called the Qualified Business Income Deduction. That means you will only pay income tax on 80% of your qualified business income. The 20% deduction is for income…

3 Ways You’re LOSING Money by Getting a Big Tax Refund

02/12/2021
dealing with debt, personal finance, retirement, taxes, you need to know this

Updated for 2021 Most of us celebrate getting a huge tax refund – we have big plans for that money every year. We act like getting that big chunk of change is a good thing, but it’s not. In fact, you actually lose money by giving the Federal government an interest-free loan every year. According to the IRS, the average tax refund for tax year 2019 was $2,549, which works out to $212 a month. But if you put that money to work for you instead of lending it to them, you could end up with a much bigger pile…

Help! I Got IRS Notice CP-2000

12/28/2020
taxes, you need to know this

How to handle tax notices from the IRS You just got a letter from the IRS. Your first reaction may involve panic… and that can lead to not dealing with the letter at all. Avoiding that IRS notice could end up costing you a lot of money. So take a breath, grab the letter, and read it. Chances are what you got was a CP-2000, a notice of underreported income. The most important thing to do here is respond. And we’re going to talk about exactly how you can do that. But first, let’s figure out why the IRS is…

How to Right-Size Your Mortgage

12/11/2020
personal finance, you need to know this

If you’re thinking about buying a house, you’re probably looking at mortgage rates. And that’s helpful… but it’s only one tiny piece of your home/mortgage puzzle. The most important number here is the right amount to borrow. Lenders want you to borrow as much as possible, encouraging you to buy the maximum house their willing to finance. They’ll offer you the largest possible loan based on how your finances look on paper. Their only goal: to lend you a lot of money for a long time and collect hundreds of thousands of dollars in interest. Your goal is the exact…