Financial Umbrella LLC

There's some silver lining for investors when it comes to a stock you're losing money on, you might be able to harvest some of your tax losses! 📊 What exactly does that mean? When you sell a stock at a loss and then purchase a similar investment, you can use the loss from your initial stock to offset your taxable capital gains. Depending on the amount of loss and gains you've had, you may even qualify to offset up to $3,000 of your losses against your ordinary income. Loss harvesting can be a relatively complex strategy - it's best to consult with your trusted tax accountant! This post is not intended as investment advice.

Depreciation can be an INCREDIBLY powerful tool for small business owners, but you need to understand the basics! ⤵️ When you purchase a depreciable asset for your business, you can recover a portion of the cost each year through depreciation. For example, if you purchase a really nice business computer that's worth $3,000, this asset class has a depreciable life of 5 years. That means over the next five years, you could get a $600 tax deduction for depreciation (if you're using the straight-line method). Need a tax accountant to help you figure it all out? You're in the right spot!

It's that time of year again... FANTASY FOOTBALL TIME! 🏈 While you're planning out your strategy, let's look at your finance team the same way: BUILD A STRONG OFFENSE: Your tax accountant leads your team when it comes to helping you save on taxes, comply with the law, and set your business up in a way that aligns with your long-term goals. For this position, you want to look for someone with experience in your industry and state. DON’T NEGLECT DEFENSE: Your bookkeeper is your business’s first line of defense against human error, fraud, and other issue detection in the day-to-day running of your business! For this position, you want to look for someone who is detail-oriented, a strong communicator and ideally has prior experience working with businesses in your industry. YOUR SPECIAL TEAMS: Depending on the nature of your business, don’t forget to draft skilled players to help with specialized areas of your finances like: - A/R or A/P Clerks - Payroll Processors - CFO - Auditors I'd be HONORED to be a part of your real-life finance team! 😜

If estimated federal taxes are always a surprise, I've got some bad news for you... You may also be on the hook for estimated state taxes too! Depending on which state you live in and your taxable income, you may be required to make quarterly tax payments for your state taxes. Check with your tax accountant to see whether this applies to you!

👇 Refundable tax credits are SO valuable for these two reasons: 1️⃣ They reduce your tax liability dollar-for-dollar. What does this mean? If you were going to owe $2,000 in taxes and you qualify for a refundable tax credit of $1,200, you now only owe $800 in taxes! 💸 2️⃣ If you were going to owe LESS than the refundable credit amount, you can actually get this money paid back to you in the form of a tax refund. For example, if you owed $800 in taxes and qualify for a fully refundable tax credit of $1,200, you now have a $400 tax refund! Check with your tax accountant to see which tax credits you qualify for!

Next month is the extended individual tax filing deadline... which means it's time to create a tax filing plan NOW! 🗓️ If you have all your documents ready to go, there's no reason to wait until the last minute to file. If you're struggling to figure out which documents you need to file, I can help, but you need to reach out ASAP! 📧 dane@financialumbrella.co 🖥️ www.financialumbrella.co

You've probably heard that taking a home office deduction or rounding numbers on your tax return can increase your chances of an audit... but here are some things that will DEFINITELY be flagged in the IRS's system: 🚩 Underreported Income The IRS has a document matching system that pairs the document your employer/payor files with them with the number you report on your tax return. When these two numbers don't match, it flags in their system! 🚩 Inconsistent Deductions If you are only reporting that you made $40,000, but you've also reported that you made $20,000 in charitable deductions, this could be flagged as inconsistent. Want to stress less about an IRS audit? Having a professional handle your taxes can help! 👋

🤖 I’m actually really excited about the potential artificial intelligence has to make my job easier... but I’m not worried about it replacing me! Tax law has a lot of gray areas, and AI is great at strictly following black-and-white rules. Finding the correct answer for a taxpayer involves a deep understanding of their unique tax situation and long-term goals, not just typing a question into a chatbot!

Tag your teacher friends on this post to make sure they take advantage of this deduction! 📲 👇 Here's what you need to know: Eligible educators can deduct up to $300 of unreimbursed qualified expenses. What types of expenses count? 📚 Books ✏️ Supplies 🖥️ Computer Equipment 🧑🏫 Professional Development Courses and more! If you and your spouse are both eligible educators, you're each eligible to deduct up to $300 in educator expenses for a total of $600 when you file married filing jointly. 💍 Curious if something you've purchased to prepare for the upcoming school year counts? Shoot me a message! 📧

When it comes to taxes, getting a tax credit or deduction is better than nothing! But... which is better? 👇 Generally, a tax credit will have a bigger impact on your taxes because it is a dollar-for-dollar reduction in the taxes you have to pay. A refundable tax credit is even better because if you qualify, you get a refund even if you don't owe any taxes! 💸 A tax deduction is great too! It's a direct reduction of your taxable income. Make sure you don't miss out on the tax credits and deductions you qualify for by working with a tax professional (like me!).👋