Year: 2022

If your small business kept employees on the payroll through the pandemic, you may be eligible for the Employee Retention Credit (ERTC). Launched in the early days of the COVID-19 pandemic as part of the CARES Act relief package, it was intended to provide extra incentive for smaller businesses to retain their employees, although it was widely overshadowed by the Payment Protection Program (PPP). The ERTC is still available retroactively for both 2020 and 2021. Determining eligibility can be tricky, especially if you applied for PPP loan forgiveness, so you should generally consult a tax professional for assistance. Click the following link for more detail on the ERTC.

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Most people who invest in rental property do so with a profit motive, oftentimes raising the rents as high as they can in order to maximize their income. But in other situations, maximizing profits may not be the ultimate motive. Sometimes, a landlord may be willing to rent to a tenant at below fair market value. Examples include a parent renting a property to a child where the rent just covers the mortgage and utilities or when a landlord gives a deal to a friend. The IRS has very specific tax rules when it comes to below market rent.... and it generally isn't good. Click below for detail.

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If you are already on Medicare, now is the time to look at your options. You don’t need to take any action with your Medicare Advantage Plan or Traditional Medicare Part D prescription drug plan if you are happy with them. However, plans change every year so it’s worth confirming that your doctors, preferred pharmacies and other providers are still in network and that your medicines are still covered at the price you expect. You should also consider whether to switch from Traditional Medicare to Medicare Advantage. For more information, click below:

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ANCHOR, short for the Affordable New Jersey Communities for Homeowners and Renters, has replaced the NJ Homestead Rebate. ANCHOR is generally much more liberal than the NJ Homestead Rebate program is replaces. Homeowners making up to $250,000 per year and renters making up to $100,000 per year are now eligible for a rebate. The new program is still several years behind and is for tax year 2019. The deadline for filing your ANCHOR benefit application is December 30, 2022 so you need to act soon!

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In pre-pandemic years, Labor Day sales events offered generous discounts on new cars as dealerships aimed to clear out current-year models and start selling the next year’s versions. These days? Not so much. “Shoppers waiting for Labor Day sales events with substantial discounts on outgoing model-year vehicles will be frustrated by the lack of markdowns and choice of vehicles,” said Thomas King, president of the data and analytics division at J.D. Power, in the report. At least there is evidence used car prices are starting to soften.

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I've been suggesting excess be used cash to buy I Bonds for several months… but what about the far more popular sibling EE Bonds? I don't usually recommend either type of US Savings Bond because their interest rates are fairly low and you have to buy them through an account at TreasuryDirect, which is somewhat cumbersome. However, the interest rate on I Bonds is based on inflation, which has been at multi-decade highs, so I Bonds look quite attractive today. John Rekenthaler, a columnist for Morningstar, compares both types of bonds and reaches a similar conclusion.

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Bull markets can run for a long time—but they can't run forever. And when a bull stops running, it's better to be prepared than surprised. Is your portfolio ready? Get prepared with these seven investing tips.

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Question - My dad has terminal cancer. I am his oldest daughter and also the product of his first and only marriage. I have a younger sister and he was never married to her mother. My father always said I would inherit his house once he passed away, but he changed his mind after I spent several years in prison. Now he won’t give me a clear answer. My sister is already in charge of his house, car and bank account. Do I have any rights given that I was the product of a marriage and she wasn’t? And what about my parents divorce decree? I believe it said I was to be left the house and he was to pay child support to my mother, which he never paid and she never pursued. He was also supposed to put me through college and that never happened, either. What can I do, if anything? Click the link below for the answer.

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in the spring or summer and you’re sure to find plenty of garage sales.  Selling your unwanted stuff is a great way to make some extra cash. But if you’re not savvy about the tricks of yard sale con artists, you could end up at a loss. Here are 9 garage sale scams to arm against

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A Qualified Charitable Distribution (QCD) is a tax-free withdrawal from an Individual Retirement Account (IRA) that is made directly to a qualifying charity. It is a popular way to do good while also satisfying the Required Minimum Distribution (RMD) requirement. For IRA owners with charitable intentions, a QCD offers substantial tax benefits, but timing is everything! For those eligible to make a QCD, the timing of your QCD must be coordinated with your RMD. Keep reading for details.

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Do you have a college student who just graduated? Congratulations! Now it’s time to study up on the best way to pay off those student loans. Federal student loans come with benefits such as flexible payments, forgiveness and forbearance or deferment so they should be evaluated separately from other types of loans. Should you focus on paying off high-interest loans first or paying as little as possible? What about using a loan consolidator to refinance the debt? While not addressed in the following article, please keep in mind that student loan repayment, interest, and collections are paused through August 31, 2022 as part of Covid relief and rumors are swirling that the Biden administration is planning to cancel $10,000 in student debt per borrower.

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Inflation is higher than it's been in decades, which is creating an interesting opportunity to invest in US I Bonds. I Bonds are a special type of US Savings Bond that earn interest based on combining a fixed rate and a variable inflation rate that gets announced every 6 months. Historically low yielding, I Bonds are currently paying 9.62% annual interest through October. This is a fantastic rate for a low risk bond! Depending on your situation, I bonds may be a good place to park cash or become part of your bond portfolio. Before rushing out to buy them, know that there is a $10,000 per person annual purchase limit, you can’t touch the money for at least 12 months, and there’s a penalty for selling within five years. Additionally, you can only buy them in electronic form through an account with the US Treasury, known as TreasuryDirect. Keep reading for more information.

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If your tax bill was higher than anticipated, it could be due to the Net Investment Income Tax (NIIT). NIIT is a tax on investment income, such as interest, dividends, and capital gains. Importantly, it is a 3.8% surtax, meaning it is an extra tax on top of other taxes that may be owed on your investment income. For instance, qualified dividends and capital gains are generally taxed at 15%, but the rate for those subject to the NIIT will essentially be 18.8%. NIIT only applies if your modified adjusted gross income (MAGI) is more than a certain threshold - $200,000 (single taxpayer) or $250,000 (joint taxpayer). This is not a new tax - it has been in effect since 2013! Continue reading for more details.

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It might come as a surprise to learn that you’re technically an employer if you pay someone to watch your kids or to clean your home.  If a household worker is classified as your employee, you will owe tax, often referred to as the “nanny” tax. IRS guidelines for what makes a household worker an employee are pretty simple - if you control what work is performed and how they do it, they are employees. However, if the worker is an employee of an agency, the agency pays the tax, and if the worker is classified as an independent contractor, he/she is responsible for the tax. Keep reading to find out what is involved if you have a household employee and need to pay the nanny tax.

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It is that time of year to consider making an IRA Contribution. You have until April 15, 2022 to make a contribution for 2021. You can also make your 2022 contribution at the same time.

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The Criminal Investigation unit of the Internal Revenue Service has 20 field offices located across the U.S. and 11 attaché posts abroad. According to IRS-CI chief Jim Lee, the top 10 cases of 2021 have all the makings of a made for TV movie — embezzlement of funds from a nonprofit, a family fraud ring that stole millions in COVID-relief funds and a $1 billion Ponzi scheme used to buy sports teams and luxury vehicles.

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The IRS closed 452,515 individual audits during its fiscal 2020. This represents less than 1% of individual income tax returns filed, so the chances of an audit are slim. However, there are several reasons why your return may get flagged, triggering an IRS notice, tax experts say. Red flags may include excessive write-offs compared with income, unreported earnings, refundable tax credits and more. Crypto trades may also draw scrutiny.

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You might need to take a little extra time in 2022 to plan your required minimum distributions (RMDs) from IRAs, 401(k)s, and other qualified retirement plans. The starting age was changed from 70 1/2 to 72 and how RMDs get calculated for inherited IRAs changed for year 2020. This year, the life expectancy tables were changed. The new tables have slightly longer life expectancies than the old tables, making RMDs a little bit lower under the new tables than the old ones. This change is easy enough for IRA owners over age 72, but for those who inherited an IRA prior to 2020 (and have been calculating RMDs under the old rules), it is more complicated. Click the link to learn more:

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I was named a Five Star Wealth Manager in NJ again in 2022! Less than 7% of advisors were named this year and this marks my eighth time winning this award. As in prior years, Five Star Professional partnered with New Jersey Monthly magazine and all award-winners were listed in a special section of the January issue. For more information on the Five Star award and the research/selection methodology, please visit my spotlight page:

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