Hobby or Business? The IRS will need to know.

According to the IRS, if a business is presumed to be for profit — it makes a profit in at least three of the last five tax years. The taxpayer cannot deduct losses from doing an activity purely for pleasure, in the same way as if the activity was a business – and incurred a loss. For new business, the IRS expects you to turn a profit in at least three of five years or it will consider your business a hobby.

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Hurry up and take advantage of solar tax breaks – they won’t be there forever

If you are a homeowner and have ever considered going solar, or are in the process of building a home and have been offered the option, you might consider that in 2015 Congress made the decision to extend the solar panel tax credit (officially the investment tax credit (ITC)) several more years, which means it will not expire until the end of 2021. This credit makes installing solar panels more affordable for all US customers (residential and commercial) by allowing us to deduct 30 percent of the cost of installation of a solar system on our taxes, at least until and through 2019.

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Want to rent out that spare bedroom? Here is how it may affect your taxes.

If you have seriously considered offering a spare room, a vacation condo or even your own home to short or long term lodgers, there are some tax considerations you should consider. To be sure, a host should become aware not only of state occupancy taxes (and sales taxes) but also of local occupancy taxes. It is up to you to determine if your city or region actually requires the taxes to be paid.

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Changes to the Affordable Care Act (ACA) for 2018

Open enrollment for health insurance in the ACA marketplace for 2018 began on November 1, 2017 and ended on December 15, 2017, providing a shorter open enrollment than previous years. Although the standard enrollment period is over in mid December, there are still special circumstances where people can enroll throughout the year. This is called special enrollment.

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How Healthcare Savings Accounts work in retirement

Healthcare Savings Accounts (HSA) are tax advantaged accounts designed for people enrolled in high deductible medical insurance plans (HDHP) to pay for out-of-pocket medical expenses with pre-tax dollars. Your HSA contributions are only tax deductible before you turn 65 and become eligible for Medicare. Consumers who are eligible (have a HDHP), and looking forward to retirement, would do well to stockpile the maximum amount in an HSA for use as a buffer against rising healthcare costs.

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Three Smart Financial Exercises for Millennials and Others

The generation of people born between the early nineteen eighties through 2000 are commonly referred to as the Millennials or Generation Y. They follow Generation X, and grew up through two national events which had world-wide significance: The World Trade Center collapse (9/11) and the Wall Street financial crash followed by the Great Recession starting in late 2007 and ending in 2009. Unlike other generations before them, they also have unprecedented levels of student debt. So, how does this factor into their ability to create wealth?

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The average IRA balance, for a person approaching retirement

If you are wondering how your retirement savings compare with your peers as you approach your retirement deadline, the Federal Reserve Bank of St. Louis publishes economic research, which might surprise you. In 2016, the average Social Security benefit for retirees was $1,294 per month. For many, this benefit amount is only part of their retirement income and in order to create an additional income, they have been saving in Individual Retirement Accounts (IRAs) for many years. According to the Transamerica Center for Retirement Studies, in 2016, the top 10 percent of retirement savers had $274,000 put away for retirement.

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Christmas Bonus vs. Year-End Bonus, Is there a taxable difference?

Some small businesses give personal gifts of food or gift cards, while others mimic larger businesses who customarily give the equivalent of one or two weeks salary to their employees at this time of year. According to the IRS, bonuses of money and of gift cards (considered a monetary equivalent) are considered taxable income and must be reported. They should be included on your W-2.

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