Newsletter

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May 2022

With tax season now in the rear view mirror for most of us, it's time to start thinking about how to minimize your taxes on next year's tax return.

In this month's newsletter, get a start on your tax planning by learning about the tax consequences of different types of virtual transactions, from cryptocurrency and non-fungible tokens to internet marketplaces and online courses.

Also read about maximizing your working-from-home opportunity, avoiding surprising fees while on vacation, and a great article explaining how taxes work for those picking up a summer job.

Please feel free to forward the information to someone who may be interested in a topic and call with any questions you may have.

Contents

Tax Consequences of Virtual Transactions

RealWorld Tax Consequences of Virtual Transactions imageAs social distancing turns convenience into necessity, the number and types of activities moving to the internet is exploding. It’s important to remember that these virtual events often trigger real-world tax implications.

Here are some things to keep in mind:

Please call if you need help sorting out the tax implications of any virtual activity or transaction.


Maximizing Your Working From Home Opportunity

Juggling WorkLife Balance While Working From Home imageFlexible working arrangements appear to be here to stay. But the benefits of working from home also come with the challenge of maintaining an appropriate work-life balance and a high level of productivity. Here are several ideas to consider if you’ll be continuing to work from home, either full-time or occasionally:

Working from home is part of the new norm. Be sure to work closely with your employer to make sure this arrangement remains a win-win opportunity for both of you.


Watch Out! Vacation Costs That Sneak Up on You

Watch Out 7 Vacation Costs That Sneak Up on You imageGoing on vacation is a time to get away, relax and enjoy new experiences. But if you don’t pay close attention, extra costs can sneak up on you like tiny money-stealing ninjas. Here are eight sneaky vacation costs.

  1. Covert airfare increases. Airline pricing algorithms are programmed to store your browsing history to see if you’ve been looking at flights. If you have, they will bump up the price. Before searching, clear your internet history and switch to private (or incognito) mode on your web browser. When you are finally ready to book the flight, do so using a different computer from a new location to avoid this artificial price increase.
  2. Stealthy fees. The nightly base rate for a fancy resort or self-rental often compares favorably to a standard hotel in the same location. This can be an intentional pricing tactic used to get their property on the initial search results page. Don’t be fooled! These same places often add a daily resort fee or high cleaning cost on to your bill. The extra fees might be worth it to you, but it’s better to understand the full cost of the stay before making your reservation.
  3. Bait and switch. In the self-rental marketplace, a property management service may feature a great-looking rental, but when you try to book it, it is not available. They then try to switch you to a less desirable property. Even worse, a single property can be listed on numerous services so that property you think you reserved is actually already rented to someone else!
  4. Useless rental car insurance. Rental car companies will try to sell you insurance to cover damages you may cause during the rental period. The auto insurance you already have many times will extend to the rental car. In these cases, the extra insurance isn’t necessary. Before renting a car, check with your insurance company to see if a rental will be covered.
  5. Bloated baggage fees. You probably already know that airlines may charge for checking in a bag, but did you know they will charge extra if a bag is too heavy? Exact weight can vary by airline or location, so check the weight limits before you go and weigh any heavy bags using a bathroom scale.
  6. Crafty parking costs. Downtown hotels in big cities charge as high as $75 per night for parking! Research alternative parking options near your hotel or compare the cost of using ride share options before committing to the hotel rate.
  7. Extra driver charges. Rental car companies will charge an extra daily fee to have a second driver listed on the rental. If possible, commit to one person to handle all the driving on your vacation.
  8. Tricky foreign transaction fees. Traveling abroad and paying an extra fee for every purchase will add up in a hurry. Before you go, check your credit cards, bank accounts and cell phones to see if they charge foreign transaction fees. If they do, shop for another card, account or cell phone that doesn’t charge fees.

Everyone expects to pay for their vacation, but with a little planning you can avoid dealing with unpleasant surprises during your vacation!


Summer Jobs and Taxes

The tax man wants their share!

Now is the time to prepare for the not-so-pleasant part of having a summer job – paying taxes! Here’s what you can expect depending on what type of job you have this summer.

What you need to do

Here are some suggestions for understanding how taxes will affect your summer job:

Explain how taxes are withheld. If you are an employee, take one of your paychecks and review how each dollar amount is calculated. This will also help you understand the different types of taxes, including federal and state income taxes, Social Security taxes and Medicare taxes.

Set up a savings account. If you have your own business, you’ll need to set aside a certain percentage of the money you earn to pay the IRS. An easy way to do this is by transferring a certain portion of the money into a savings account. Pay attention to the quarterly estimated due dates throughout the year – April 15th, June 15th, September 15th and January 15th. These are the deadlines for you to send tax payments to the IRS.

Lower your tax bill. Consider opening an IRA that can help you start saving for the future while potentially lowering your taxes. This helps establish a healthy savings habit while understanding it is possible to pay less in taxes!

Please call if you have questions about taxes and how they apply to your summer job.



Newsletter Archive

Please note: Some material may be time-sensitive and may no longer apply.
Please contact us with any questions.
  1. Posted on: 2022-09-06
  2. Posted on: 2022-08-02
  3. Posted on: 2022-07-05
  4. Posted on: 2022-05-31
  5. Posted on: 2022-04-05
  6. Posted on: 2022-03-01
  7. Posted on: 2022-02-01
  8. Posted on: 2022-01-04
  9. Posted on: 2021-11-30
  10. Posted on: 2021-11-02
  11. Posted on: 2021-10-05