Dinero Session Taxes: Maximize Tu Refund

Dinero Session Taxes: Maximize Tu Refund

Paying impuestos might make you run for the hills in fear but with a little educacíon we can all relax and find out how to make them work for us. And if you are outsourcing to a professional, then even better. Because you will be well equipped enough to sit back and watch your favorite novela while the tax preparer takes care of the details! Speaking of which, our compa Gustavo Suarez is offering 2020 tax return filings for $50 as a way to give back to  la comunidad!. 💸 Save your hard earned cash and like Gustavo says vamos a construir la riqueza so let’s start with the $100-300 you could save (or invest!) by having Gustavo handle it for you! For those who are subscribed to SUMA and are watching this Dinero Session, this bonus is for you so get in touch if this interests you, andale!

 

Don’t need help with your taxes? No worries make sure to check out our other amigos at Indiva Advisors and Contabi Alliance. It’s always a good idea to have Dinero experts on your side. 

 

Stimulus

Now that the third stimulus was signed into law, you are likely to get another boost by check, or better yet, by direct deposit. 💃🏽 If you want to know the status of your stimulus check, you can find out here. If you haven’t received your 1st or 2nd stimulus payments yet ¿pues qué esperas? You may be eligible for a Recovery Rebate Credit but you must file your 2020 return to claim it, even if you don’t normally file. Y que alivio, all of the  stimulus payments are non-taxable. These payments are meant to help you bounce back and also inject some life into the economy through these strange times. 🙌🏽 Si se puede!

Unemployment

If you received unemployment benefits, you will get a 1099-G form. This form can also be downloaded from the EDD site or requested here. Keep this with the rest of your items to give to your accountant or when preparing your taxes yourself. Unemployment benefits are still taxable, pero The American Rescue Plan has waived federal taxes on up to $10,200 of unemployment benefits. 😎 This only applies to federal income taxes, though. States may still be taxing the entire amount so ojo!

Deductions 

There are many variables in what expenses are deductible this year and more to consider with Work From Home situaciones leading us to purchase things like computers, office chairs, printers and high speed internet in order to continue working. For employees that have accumulated expenses that our employers don’t reimburse us for, these are likely deductible. Document everything and present it to your tax preparer to get the full value of your deduction. 🤓 Dinero right back to your cartera! 

Individual vs Joint Filing

Should you file a joint return or individual? You may think voy a ganar más so long as I file individually. Pero filing a joint return is most definitely the best option. If you were to apply for a loan, and presented your supporting documents como tu tax return, it would only show your income and not the joint income of the entire household. You may miss your opportunity to grow your wealth with a new investment in a property or a business without that loan. 🏠 You may even fall into lower income brackets separately but the amount you owe could add up to higher income tax collectively. Pero what?! That’s right! When you file jointly, the deductions you take together could knock you down an income bracket and leave you with a credit or owing less. 🤔

If you are a student and you still live at home, it is a good idea to not file as an individual, either. Talk with your papas or the person filing as head of household about being claimed as a dependent on their return. Te ira mejor, mij@! It could provide a much bigger return and you could share the wealth! 🤝🏽

Investments

Will my investing windfall affect my taxes? En primer lugar, felicitaciones! Y respira profundo. Capital Gains or profit will not affect you. The only time these earnings affect you is when you sell. So if you have gains and you sell, that’s taxable. If you have losses and sell, you may be able to take that deduction. Your broker or trading program will be able to provide you with a report at the end of the year with the appropriate figures to file so no te preocupes with all the numbers porque technology got you. 📊

Health Insurance

A lot of us are worried about the Affordable Care Act and how it’s affecting our income taxes. This one can be a rompecabezas. If you’re trying to file at home, you may think you owe thousands of dollars and without a professional to guide you, it’s hard to say why that is. A professional can provide ways for you to maximize your return and find ways to lower what you owe, if you actually do owe. Be sure to bring your form 1095 to your preparer to provide documentation on how much you’ve paid into your plan. No lo dejes a la desidia, you want to make sure you maximize your refund! 🏥

Self Employed

For the entrepreneurial spirits que hacen lo que te da las gana like our Grammy Winner Bad Bunny 🐰 who work independently, 1099-NEC will be provided to you as an independent contractor who’s earned at least $600 income from an individual client. If you claim deductions, this income can be reduced considerably. 

The choice to become LLC or remaining a sole proprietorship comes down to how you want to pay your taxes. An LLC can prevent you from having to pay both the employer and employee share of the 15.3% Self Employment tax that comes with being a corporation and it only costs $100 to file. If you make well over $100K in annual net income, the $800 fee for establishing an S-Corp could be worth your while. This would allow you to classify some income as salario and the rest as distribution. You would only have to pay self employment tax on the salary portion and ordinary income tax on the distribution portion. Either way, document your mileage, insurance, office expenses, telephone—anything that could be deductible. And consult with your tax professional to plan how to organize your tally of deductions every year. If your income is greatly reduced by deductions, a professional can help keep you from getting your finances in trouble with future penalties or adjustments from getting flagged for an audit or having to amend returns. In this case, don’t spill the tea! 🍵

401K 

If you withdrew from your 401K prior to retiring because you were unfortunately furloughed due to the pandemic, you will not be taxed the 10% for that withdrawal.  Pero hopefully you still have some dinerito guardado so you can visit tu familia the minute you’re able. There’s more ways than one to construir tu riqueza. 😉

 

To stay up with the latest in our Monthly Dinero Sessions, sign up with SUMA. It’s free but rico con ofertas.

Did you miss the last one? Pull up a chair and lets maximize your refund, juntos!

 

English Version: https://bit.ly/YTDineroSTaxes

Spanish Version: https://bit.ly/VideoEdicionTaxes

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