Key Tips For Queens Newlyweds On Marriage and Taxes

Do you know what the number one month is for weddings? Check today’s date and there it is: June.

With that fact in mind, I’m not sure where you currently fall on the wedding spectrum…

Are many of your friends getting married? Are your friends’ kids getting married? And if you or someone close to you is getting married soon, congratulations! Weddings are a huge deal (for obvious reasons) and, as a bonus, can often act as mini “family reunions” to gather with loved ones.

But, once the dust has settled…

And the honeymoon is over and the boxes are unpacked and the thank you’s have all been written, there are some tax implications for the newlyweds in your life. Marriage and taxes may not be the most exciting topic, but messing up your taxes is not fun either.So whether the following tips are useful for you personally, or something you can forward to others, there’s no reason these tax changes should damper anyone’s newlywed bliss.

Key Tips For Queens Newlyweds On Marriage and Taxes

“A successful marriage requires falling in love many times, always with the same person.” -Mignon McLaughlin

Perhaps the most obvious change after the big day is a new surname for one or both parties. If that’s the case, then it’s imperative the person changing their last name reports it to the Social Security Administration.

This is key because, during filing season, the IRS will look to the SSA for your personal data, and if the new surname is not accounted for, your tax refund will be delayed.

A change in marital status will also directly affect your filing status with your Queens employer. Make sure you connect with HR at work to adjust your workplace withholding. Failing to do so may result in inaccurate payments from each paycheck, which may mean an unexpected tax bill come filing time.

New Home. New Status.

Upon marriage, there is usually at least one party who has a change of address. In addition to notifying the post office of the change, it’s important the IRS knows the address change occurred as well. The reason being, so that they can mail any important documents to the right address moving forward.

As married couples think about the tax year ahead, it’s their marital status on December 31st which will determine how they file — jointly or separately.

This is where I step in to help many newlyweds determine which is the right filing status for them. Figuring out marital tax implications is tricky enough as it is, so I don’t recommend doing it all alone.

Health Benefits

Reassessing healthcare options is another key change that accompanies newlywed tax status. The move requires a proactive attitude, as it’s not necessarily fun stuff to change. But it will make a difference when one least expects it.

Although I’m no marriage expert, I know marriage usually comes with plenty of unexpected twists and turns.

If you’re insured through the Affordable Care Act (ACA), you might qualify for the premium tax credit. And if that’s the case, a change in marital status will affect the credit you receive.

Again, reconfiguring healthcare, and the tax implications as a result, is one more (tricky) area I’d love to help you or someone you know navigate in the future.

With all that being said … marriage is a joyous occasion (with many logistics to follow). Many couples out there don’t see the tax ramifications as a fun new change, but there are some, like me, who love to explore how to maximize its benefits.

Even though June is great for weddings, we all know April is when things really heat up.

Let’s start planning for that dance ASAP.

Warmly,

 

Salvatore Candela

(718) 894-1500

The TaxAdvocate Group, LLC

The TaxAdvocate Group, LLC Sheds Light on Some of the Highest State Sales Tax Rates

No, the IRS is not shutting down their operations — there is still (and probably ever will be) a federal income tax.

But states are a different story…

This being travel season, and the season during which some of our clients turn their eyes towards making a move, I thought I’d give you some info on how state and local Queens taxes might affect your decisions.

Oh, but back to federal taxes (and state) — consider this your quick reminder that estimated taxes for the second quarter are due June 15th.

This one always feels as if it came a little quick (two months since last payment instead of the normal three), so if this applies to you, you’ll want to make sure you have that all set up in time.

Secondly (and relatedly), I think I’m still in denial that we’re already into June. Our busiest season is behind us, and I always seem to expect that everything will slow down in a massive way afterwards … but this year has seen so much energy and growth around our practice that I still find myself in the midst of some very full days.

This, of course, is a very good thing. We are so grateful to be able to play such a meaningful role in the lives of our clients in Queens and beyond. We continue to work with some clients who are on extension and we’re helping clients who are (wisely) already making changes to their financial lives in order to proactively save on taxes. It’s all fun, because we really do love what we do around here.

So, speaking of proactive planning, if you’re considering travel or a move, keep this stuff in mind…

The TaxAdvocate Group, LLC Sheds Light on Some of the Highest State Sales Tax Rates

“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.” -Vince Lombardi

WARNING: What I’m about to share might make you salty.

The topic is state and local taxes (SALT … ba dum, ching), and if there’s any condolence … it’s that nobody is exempt from paying their part.

But where exactly do your SALT dollars go?

With the Tax Cuts and Jobs Act (TCJA), answering that question got a little trickier this year. In short, SALT includes income taxes from taxing jurisdictions as well as real estate and personal property taxes. Where the TCJA altered things was its limiting of the amount which is potentially deductible from federal tax returns.

Let’s take a look at some more SALT ramifications. (Other than high blood pressure, that is. 🙂 Okay, I’ll quit the salt puns now. Maybe.)

Higher Price to Purchase

Paying sales tax has become so woven into our economic fabric that we hardly recognize it on a day-to-day basis.

But states depend heavily on sales tax to make it through the year (see list below of which states truly rely on sales tax). The revenue generated plays a foundational role in the maintenance of cities, counties, schools and other initiatives within our state.

Do you like the state you live in? I hope so. Most every purchase you make goes toward its cause(s).

The Few and the Proud

HOWEVER, if you live in one of the five states that doesn’t apply a statewide sales tax — Alaska, New Hampshire, Montana, Delaware, Oregon — there are some other laws that apply to you.

In Montana, tourist-heavy populations can add up to 3% in state sales tax on their goods sold. Delaware (yes Delaware) is often called a “tax shelter” because of its individual tax laws, but businesses do pay more via gross receipts tax. New Hampshire will add a 9% state sales tax to hotel rooms, rental cars and restaurant meals, but is otherwise (mostly) sales tax-free so that you can “Live Free or Die”. Neither Alaska nor Oregon collect state sales tax either, but all is subject to change through the vote.

Top Ten Taxed for Sales

The list below is the percentage, in state revenue, comprised of total sales tax collections by state. Although Washington doesn’t collect corporate or individual income tax, they lead this sales tax charge with 46.4% of state revenue coming from sales tax.

Also, note the more “touristy” locations — Vegas, Mardi Gras, Nashville, Maui — embedded into this list. Going on vacation to any of these locations soon? Be on the lookout for extra pennies (and dollars) to pay.

  1. Washington 46.4 percent
  2. Tennessee 41.5 percent
  3. Louisiana 41 percent
  4. South Dakota 39.6 percent
  5. Nevada 39.4 percent
  6. Arizona 38.7 percent
  7. New Mexico 37.8 percent
  8. Arkansas 37.5 percent
  9. Hawaii 37.2 percent
  10. Texas 35.4 percent

It’s a Catch 22, right? Do you want to pay extra for a better place to live, or pay less for the things only you need?

And if you’d like to schedule a meeting for us in Hawaii, go ahead and buy us some plane tickets. I’d be quite happy to cover the sales tax. 🙂

Warmly,

 

Salvatore Candela

(718) 894-1500

The TaxAdvocate Group, LLC

New Ideas For Queens Students To Pay For College

I recently wrote about the cost of raising children, but there was one glaring omission: college.

But imagine if you had sent your son to Morehouse College. Here’s what happened there this month…

On Sunday, May 19th, investor and philanthropist, Robert F. Smith, shocked 400 graduating students from all-male Morehouse College when, in his commencement speech, he announced he would cover the costs of all of the student debt each graduating student had accrued. How much, you ask? Just a cool $40 (or so) million.

All in a day’s work for Smith, who went on to encourage the graduates: “You great Morehouse men are bound only by the limits of your own conviction and creativity.”

Now, without student loans hanging over their heads, many of the graduates have started dreaming about how they can creatively bless others moving forward.

What have we learned here? The next time you graduate, and see Robert F. Smith walking up to the podium to deliver a speech … get excited.

But what if you don’t have a Robert F. Smith in your life? There are some new programs emerging that you may be interested in hearing about…

New Ideas For Queens Students To Pay For College

“Sometimes it takes more courage to ask for help than to act alone.” -Ken Petti

Smith’s gift comes at an interesting time in higher education. Although a four-year education is rightly seen as an investment for life, it also carries a price tag that increases year-over-year.

In fact, the average cost of a four-year university has risen 30% over the past 10 years.

But there are new models emerging for paying for college. As highlighted in a recent Freakonomics podcast episode, Purdue University (among others) is exploring “Income Share Agreements” (ISA’s) for newly-enrolled students, in lieu of traditional tuition agreements.

In these new agreements, students pay back the funding they received by percentage according to their income for the first ten years after graduation. “The less they make, the less they are required to pay.”

Similar programs allow students to pay nothing upfront for their education in exchange for repayment in the form of a percentage of their income for a set number of years after graduation. There is a minimum annual income graduates must attain in order to qualify.

And services like Scholly help students find scholarships so that they can make it into a university of their choice.

Regardless of how education is covered financially, it’s important to still encourage today’s Queens youth toward betterment through education.

So let’s get behind the Queens students in our world, whether or not they happen to be our offspring. Gifts like Robert F. Smith’s are incredibly rare, and astonishingly generous. Although students should never bank on that kind of lightning bolt, it’s immeasurably valuable when they can receive encouragement from older generations on a regular basis.

After all, they will have a big say in how things run eventually.

So how will you channel your inner “Robert F. Smith” today? It may not be coughing up $40 million, but if you’re serious about helping people, we’d love to help you come up with the most tax-advantageous way to do so. You can reach us right here: (718) 894-1500

It may not be a commencement-level surprise, but your encouragement goes farther than you think.

Warmly,

 

Salvatore Candela

(718) 894-1500

The TaxAdvocate Group, LLC

Making Children Less Costly For Queens Families With Kids Through The Child Tax Credit

To be clear, children are costly in the best way possible.

Once the dust settles from changing diapers, sweeping floors, slapping bandaids on booboos, driving to sports practice, attending back-to-school meetings, saving for college, and buying countless goldfish crackers … you realize children are a lot of work.

They’re also monetarily costly. Depending on your income, you could be spending over $300K on each child, not including college.

But they’re worth it.

How are they worth it? Because they are your children, and in many ways they are the closest expression of eternal legacy that we can find on this side of our mortal coil.

Now, without a doubt, it takes money to raise a child. Amidst the aforementioned tasks, there’s gas money, sign-up fees, insurance premiums, and maybe most of all: grocery costs.

But there are a few crucial tax breaks I hope you’re aware of — a couple of these might serve as a refresher, and a couple might be new to you.

Regardless, the government apparently wants to help you chip away at child costs (at least for now). But first you need to know which tax levers to pull.

Making Children Less Costly For Queens Families With Kids Through The Child Tax Credit

“Having a child is like getting a tattoo … on your face. You better be committed.” -Elizabeth Gilbert

Because raising children truly does “take a village”, know that I’d love to help walk you through some of these steps in greater detail. Everybody’s childcare costs look different, and together we can plan for child-based tax breaks. Don’t hesitate to give me a call today. (718) 894-1500

Child Tax Credit (CTC)

Over the last few months, we’ve spent some time discussing the Tax Cuts and Jobs Act (TCJA), and although some of its outcomes have altered Queens taxpayers’ refunds in a negative way, there are indeed some perks. In this case, the signed law meant a CTC increase from $1,000 to $2,000.

Not bad, huh?

Just a few rules apply for the parent’s eligibility:

  1. Child less than 17 years old at the end of the tax year.
  2. You, as the taxpayer, claim the child as a dependent.
  3. Child lives with you, as the taxpayer, for at least six months of the year.

In addition, the dependent’s family must earn at least $2,500 a year.

The CTC is something you should definitely take advantage of if you have children.

Child and Dependent Care Credit (CDCC)

Do you, or someone you know, pay for childcare? This is arguably the largest amount of money Queens parents will spend on their children (once education is said and done).

The CDCC is crucial in giving you a break from childcare costs. In fact, the break will cover up to $3,000 in childcare costs for one child; $6,000 for two or more children.

Such a tax break might be crucial if you’re a single parent. In that case, filing as Head of Household (HoH) is imperative. This law applies to parents who are not married while raising children on their own.

The HoH offers a larger standard deduction than a single filing status. You would also receive more favorable tax brackets and applicable tax rates. If, during the tax year, you pay more than half the costs of keeping a home for yourself and a dependent, you will qualify as HoH.

Adoption Help

If you’ve adopted a child, or know someone who has, it’s important to note there are specific tax breaks you can claim.

In 2019, it’s possible to claim a tax credit up to $14,080 in an effort to cover adoption costs (which, if you don’t know, get expensive quick). Side note: Employers can offer a similar tax break if one of their employees chooses to adopt.

Having children, biologically or through adoption, is one of the greatest gifts a human will experience. But, like we stated before, it’s important to lean on others for help. In this case, it just so happens to be the government.

According to a 2016 report from the United States Department of Agriculture, raising a child, from birth to age 18, averages out to around $233,610. That’s around $14,000 a year … sheesh.

If you need some help purchasing all those goldfish crackers, you might need to pick up a side hustle. But as far as your taxes go? It’s vital to have a proven strategy.

Call me today and let’s get one in place. Right after you go clean that stain up off the couch. 🙂

Warmly,

 

Salvatore Candela

(718) 894-1500

The TaxAdvocate Group, LLC

Salvatore Candela’s Three Building Blocks To Healthy Personal Finances

It’s understandable if things might feel a little bit … shaky right now for you. If you pay attention to the media, you are seeing trade wars with China, uncertain stock markets, apocalyptic elections rumbling in the future, even the Apple juggernaut is seeing its empire show signs of trouble.

All of these, by the way, are good reasons to fight for your own personal clarity in the midst of trouble all around.

So, we press into what we CAN control, and that’s your personal financial foundation.

The tax return is filed, so it’s the perfect time to assess what went well, what didn’t, and if you’re content with the outcome. There are a number of things you can start doing today so that next year is your best, most tax-efficient (and saving) year to date.

I wouldn’t be doing my job if I didn’t suggest a good next step: give me a call: (718) 894-1500. We will help you set a game plan for the year ahead. Taxes are only getting trickier, and it helps to have someone with you in the trenches.

Leaving the tax component aside, it’s also a good time to examine where your money is going.

Are you frugal? Do you spend at will? No matter where you fall on the spectrum, there are a few ways you can direct your cash flow so that you can benefit in years to come.

After all, it’s never too late to begin money-friendly habits.

Salvatore Candela’s Three Building Blocks To Healthy Personal Finances

“There is a gigantic difference between earning a great deal of money and being rich.” -Marlene Dietrich

The first part of your personal finance foundation is actually the absence of two poisons: taxes and debt.

Both of those words might sound like nails on a chalkboard, and that’s exactly why you should pay off both as soon as you can. We’ve talked (and do talk, and will talk) about taxes a good deal, and it’s no secret that paying taxes is your duty as a citizen. In addition, we spent the last few weeks discussing ways you can pay and the penalties that come for those who don’t.

Pay your taxes. Do it.

The debt piece is obviously more nuanced from person-to-person. Undergrad, grad school, credit card, car, home, etc. The (odd yet accurate) analogy of eating an elephant comes to mind — one bite at a time.

Debt is another item I’d love to chat about with you, as we can assess after-tax interest rates and how they might affect potential investments. If you’ve ever ridden yourself of debt before, you know the ensuing freedom. I want that feeling for the entirety of your financial picture.

The second block: Hold Wisely

Once the word “debt-free” is within reach of your vocabulary, the real fun begins. What’s the real fun, you ask? It might sound nerdy … but saving and investing are two keys to financial wealth and freedom.

We’ve discussed ways you can save and invest before, but again — you are never too late for either.

Remember, post-tax season offers a fresh start. Let’s make it count!

The first question I’ll ask: Do you have an emergency fund established? This is key to your savings account. It should contain three to five months worth of savings, because life is full of unexpected costs — car accidents, medical bills, stolen items — it’s important to play safe. After that is established, then you can save for future costs like a new car, home, and so on.

Investing is another beast … one that can lead to meeting your financial goals way quicker. If you are not a professional, I strongly recommend sitting down with one to discuss investment opportunities for you and your family. The small cost of a meeting leads to big gains in the future. Ask around for some trusted referrals. A trusted Queens financial planner could be essential for your financial success moving forward.

The final block: Spend Generously

And I don’t exactly mean spend everything you have. Clearly, I led with two things you should do first with your money: pay off taxes/debt and save/invest after you do. But this third step is inevitable — we spend money (most) every day in some form or fashion.

Where are your dollars going?

What is the ratio of money you spend on yourself vs. money that is donated to Queens organizations or people you believe in? One of the most life-giving components to saving and earning money is so that you can help others in the process. What if someday you could invest in someone’s start-up business so that they could pursue their dream? What if you could bless your children and help them with college tuition? There are plenty of ways to spend, but one of the best is on others.

But truly, it is your hard-earned money after all. How you spend is entirely up to you. And it’s a good time when you can treat yourself every now and then. You are human after all. Just remember that when the aforementioned steps are done first, treating yourself to a new ____ will feel much more special.

This whole subject of personal finances boils down to prioritization. Reversing this order of operations isn’t illegal, but in the long run … it might be detrimental.

Give me a call today and let’s dream about your new, free financial future.

Warmly,

 

Salvatore Candela

(718) 894-1500

The TaxAdvocate Group, LLC

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