The new tax law: What you need to know now

(BPT) – With the Tax Cuts and Jobs Act of 2017 having been signed into law, here are some of the things you should be thinking about as tax season approaches, according to Robert Fishbein, vice president and corporate counsel, Prudential Financial Inc.

2017 tax returns

The new tax law is generally effective starting in 2018, which means that your 2017 income tax return is largely unaffected. However, there may be actions you can take now to benefit from the change. For example, assuming you are eligible, you could fund a traditional IRA before the due date of your tax return; the income exclusion may be more valuable under higher 2017 tax rates.

Lower tax rates and new withholding

The hallmark of the new tax law is lower marginal tax rates for individuals. The IRS has issued withholding tables employers started using in February to reflect these lower rates. While this could mean lower tax withholding and more take-home pay, you should evaluate your personal income tax position to determine if you will pay more or less under the new law and adjust your withholding accordingly.

If you make estimated tax payments, you should also estimate your tax liability under the new tax law and make necessary adjustments to your quarterly tax payments.

Assuming your withholding or estimated tax payments need no adjustment may create an unpleasant surprise if you are under-withheld and owe penalty tax and interest when you file your 2018 income tax return.

Higher standard deduction

The new higher standard deduction of $12,000 for individuals and $24,000 for married couples will greatly reduce the number of taxpayers that itemize deductions. If you did not itemize in 2016, and your tax position is similar now, you will probably not itemize in 2017. The increased standard deduction, combined with lower marginal rates, may mean your tax liability will go down.

If you itemized in 2016, compare your total itemized amount to the new standard deduction. If less, and assuming a similar tax position in 2017, you will likely no longer need to itemize.

For many, this provision will turn out to be the greatest simplification aspect of the new tax law, since they no longer must track itemized deductions or complete multiple associated forms.

No personal exemptions

Some taxpayers will need to look more closely to determine if they will pay less or even more. The new law eliminates personal exemptions and reduces deductible items, such as limiting the total deduction for state and local income taxes to $10,000, reducing the amount of deductible mortgage interest and eliminating the deduction for interest paid on a home equity line of credit. Therefore, if you itemized deductions in 2017 and your deductions were greater than the applicable standard deduction, you will have to consider what deductions are available in 2018 and estimate your tax liability.

In states with higher income taxes and property taxes, it is possible that the loss of itemized deductions will be greater than the benefit of lower rates and your tax liability could increase.

Increased child and dependent credits

The new law increases the child tax credit for children under 17 to $2,000. The income limits to phase out the credit are also significantly increased so more taxpayers will be eligible. In addition, there is a $500 credit for other qualifying dependents. Depending on your tax bracket, this could be better or worse than getting an exemption for each dependent.

Increased AMT exemption

Adding one more layer of complexity to your 2018 planning is the new tax law’s modification of the Alternative Minimum Tax or AMT. The AMT is a parallel tax system that requires you to calculate your income tax under the normal rules and then again under AMT rules, paying the higher of the two. The new tax law increases the AMT exemption, or the amount you can earn and not be subject to this alternative tax. If you have been subject to AMT in the past, you should review the new increased exemption and whether that will change.

The bottom line

The bottom line for most is whether they will pay more or less income tax in 2018 than in 2017. While it is likely many will pay less, you need to consider all the above before you know how you will be impacted by the new tax law.

Please consult your legal or tax advisor concerning your particular circumstances. The Prudential Insurance Company of America, Newark NJ and its affiliates.

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Cash clever: Be too smart for these tax-time phone scams

(BPT) – If a smooth-talking phone caller has ever tried to cheat you out of your hard-earned money, you’re far from alone. Further, such scams tend to be rampant at tax time.

An estimated one in 10 Americans lost money in phone scams between April 2016 and April 2017, says a recent Harris Poll, parting with an average $430 per person for a national total of $9.5 billion. That marks a 56 percent monetary increase over the previous year; that’s partly because such fraud has become easier for criminals as technology has enabled both number-finding and robo-dialing, and Americans are more likely to answer unknown calls on their ever-present mobile phones.

Many fraudsters see tax time as an ideal time to prey on people facing uncertainty or anxiety about getting their tax returns right, which is why they may call and impersonate IRS officials threatening arrest, deportation, eviction or license revocation if taxes are not paid immediately by using a money transfer, loading a prepaid card or purchasing a gift card. Remember, though, that the IRS almost always resolves issues by mail, not phone. It will never request payment without sending a bill first; will allow questions or appeals about your bill; won’t direct you to use specific payment methods; won’t ask for your credit or debit card numbers by phone and won’t threaten arrest or similar consequences.

A consumer’s greatest weapon in fighting fraud is education and awareness. While fraudsters can often be clever, knowing some of their strategies can be the first step toward protecting yourself from their tactics.

“The tax return season is upon us, and scammers are posing as Internal Revenue Service (IRS) representatives, demanding victims send money to avoid arrest or deportation,” advises Lee Buchmann, Western Union director of anti-fraud operations. “Do not send a money transfer to anyone who asks you to send them money to pay taxes. The IRS does not contact consumers to demand payment for taxes through money transfer or prepaid cards.” More descriptions of scams that use tax season as a lure are available at IRS.gov.

The Western Union Consumer Protection Center (www.wu.com/fraudawareness) offers specific information about protecting yourself from fraud based on your country of residence. Stay informed and follow their updates on Facebook and Twitter. If you believe you are a victim of fraud, call the Western Union Fraud Hotline at 1-800-448-1492.

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5 practical and fun ways to spend your tax refund

(BPT) – It’s that time of year again when you may find a little bit of extra money in your pocket, thanks to your annual tax refund. There are plenty of practical ways to spend it, such as putting it toward paying off credit cards, loan payments or even starting a college fund, but there is always something tempting about taking that money and putting it toward something just a little bit more fun. Instead, consider something that is both practical and fun that you will use every day and will help you save money throughout the year.

1. Learn something new: Maybe you have been meaning to learn a new skill or explore a subject that you have taken interest in. Your refund is the perfect solution to fund a new hobby. A little bit of cash and a few extra hours a week can go a long way in honing in on one of your new (or old) passion points. Look into your local community college, dance studio, art center, etc. and check out the various classes offered to find one that piques your curiosity. If you are lucky, these courses could turn into something far more fruitful that will last far beyond tax season.

2. Be on the cutting edge: Haven’t you always wanted to be the first among your friends with one of the latest smartphones? Often though, it becomes too expensive between the phone, the update charge and the data fees. This year, use your tax refund to purchase one of the latest smartphones and a new wireless plan that allows you to save in the long-term. Achieve balance with Straight Talk’s $55 Ultimate Unlimited* Plan, and stay in touch with friends and family, stream the latest videos and navigate while you’re on-the-go without worry. While you reward yourself with the latest technology and unlimited* data, you’ll also give yourself the gift of saving on your phone bill all year long.

3. Plan a staycation: Planning a vacation can be tough with a hectic family schedule. Between working out the details and packing, the planning process can become overwhelming. Why make it complicated when you can instead vacation from the comfort of your own home? Use your refund to have family-based experiences in your hometown — many museums, zoos, waterparks, etc. offer discounted year-round family memberships, too. Even though your staycation may end once the weekend is over, the new membership will allow for family fun to continue throughout the year.

4. Get fit: Have you faltered on that New Year’s resolution to spend a few more hours a week at the gym? Your tax return is your second chance at getting into better shape this year. If the gym isn’t for you, put it toward trying a new exercise class, or better yet, do it with a friend or partner! Many workout studios give discounted classes for your first session, so you’ll have the opportunity to “try before you buy” — and if you love it, pick up a package of classes to reduce longer-term costs.

5. Cook a homemade family feast: While you could take your hard-earned tax return to a fancy restaurant, you could also make a fancy dinner right at home. Use your extra spending cash to revamp your kitchen with new appliances and ingredients that will allow for more exciting in-home dining. Splurge on a homemade pasta maker or a brand-new mixer, then work as a family to cook up your very own secret recipe. These purchases and new creations will result in a fun night of cooking for the whole family, but also will be around for years to come!

You work hard all year and deserve to reward yourself with something fun and practical that can bring a little more balance to your emotional and financial health. For more information and ways to save, visit StraightTalk.com.

*At 60GB, Straight Talk reserves the right to review accounts for usage in violation of its Terms and Conditions. Please refer to the latest Terms and Conditions of Service at StraightTalk.com. A month equals 30 days.

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Common tax mistakes to avoid in 2018

(BPT) – Life changes — getting married, having a baby, buying or selling a home, sending a child off to college or retiring — often come with changes to your tax situation. Overlooking these changes when filing your taxes can lead taxpayers to make mistakes that leave money on the table, potentially impacting their refund at a time when the average refund is about $2,800. Here is a list of common tax mistakes to avoid in the 2018 filing season to help ensure you don’t miss any deductions or credits that you deserve.

Using the correct filing status

One of the most common mistakes taxpayers make is selecting the wrong filing status. A taxpayer’s filing status can affect which credits and deductions they’re eligible for, the value of their standard deduction and their tax bracket. One situation that can make choosing a filing status difficult is when more than one filing status seems to fit. For example, if a taxpayer with children is in the process of getting a divorce, they may not be sure if they should file as married filing jointly or married filing separately or, in some instances, whether they qualify to file as head of household. In this case, the taxpayers should run the numbers to see if filing jointly or separately is more to their advantage rather than guessing.

In addition, common clerical errors such as mixing up names, forgetting to include information reported on your W-2, 1099 or other forms, or even making mathematical errors can also affect your tax benefits.

Commonly overlooked credits and deductions

Most taxpayers file their taxes using the standard deduction, but you may be eligible for a variety of itemized deductions that could possibly save you more. Also, you may be eligible for “above-the-line” deductions and tax credits, none of which require you to itemize. And it’s important to note that the newly passed tax reform generally does not impact these credits or deductions until you file your 2018 tax return in 2019.

Earned Income Tax Credit for lower-income workers:

Twenty percent of eligible taxpayers, particularly lower-income workers, do not claim the Earned Income Tax Credit (EITC). Depending on their income and the number of children they have, these taxpayers may be eligible for an EITC of $503 to $6,242. Since eligibility can fluctuate based on financial, marital and parental status, taxpayers can be ineligible one year and eligible the next.

Under the PATH Act, taxpayers who claim the EITC and who file early will have their refunds delayed until mid-February. Despite the delay, taxpayers should file as they normally would to get their refund as soon as possible.

Education credits:

Depending on your academic program, what year the student is in, income and other restrictions, there are federal tax credits that can help offset the costs of higher education for yourself or your dependents. To qualify, you must pay for post-secondary tuition and fees for yourself, your spouse or your dependent. Depending on the criteria, a student may use the American Opportunity Credit of up to $2,500 or the Lifetime Learning Credit of up to $2,000.

Itemizing deductions:

Itemizing can save taxpayers hundreds of dollars, as only one third of taxpayers itemize but millions more should — especially homeowners. Owning a home is often the key that unlocks itemization, but some taxpayers with high state taxes and charitable contributions may also be able to itemize.

Itemizing enables eligible taxpayers to take deductions such as:

* Charitable donations

* Medical expenses that exceed 7.5 percent of adjusted gross income

* Personal property taxes

* State income or sales taxes

* Casualty losses such as a fire, hurricane or earthquake

* Mortgage interest payments

Not filing

On average, the IRS announces annually that approximately $1 billion goes unclaimed in federal tax refunds. Taxpayers can claim a refund for up to three years after the filing deadline. So, in addition to filing your 2017 return, keep in mind to file your 2015 return by April 17, 2018. If not, you will lose your 2015 refund. There is no late-filing penalty if a taxpayer is due a refund. Also, even if you are not required to file a return, you may be entitled to a refund.

Taxpayers who want to ensure they get the maximum refund without a delay should visit https://www.hrblock.com/offers/refund-advance/ to see if you are eligible for a Refund Advance, or you can make an appointment with a tax professional.

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Here’s how the tax reform plan could affect you

(BPT) – With the newly passed tax reform bill, the Tax Cuts and Jobs Act (TCJA), now is the time to start thinking about how this will affect you so that you can plan ahead for the outcomes you will start to feel in your paycheck as early as February 2018.

This tax reform affects virtually everyone; however, families, homeowners, residents of high-tax states, the medically uninsured and small businesses will be especially affected. Most taxpayers will experience changes that could reduce or increase their taxes owed. If you’re not sure how this may affect you, here is a summary of possibilities.

Families

Like most taxpayers, many families will be affected by the loss of personal and dependent exemptions of $4,050 per person. However, families with income under $200,000 ($400,000 for joint filers) will be eligible for an increased child tax credit of $2,000. Those with income over that amount may be eligible for a smaller credit. This, along with larger standard deductions, may or may not make up for the loss of the personal exemption. Families with dependents over the age of 16 may also qualify for a new family tax credit of $500 for each dependent who does not qualify for the child tax credit.

Homeowners and residents of high-tax states

Homeowners and residents of high-tax states like California, New York and New Jersey, who typically itemize because they have large expenses like real estate taxes and state and local income taxes, may not be able to get the full tax benefit for these expenses, which are capped at $10,000. Some may not find it worthwhile to itemize going forward. Itemizing deductions is only worthwhile if all expenses exceed the standard deduction.

Medically uninsured

Starting in 2019, there will no longer be a penalty for those without health insurance. The penalty, which had become more and more expensive since first implemented in 2014, will not apply to taxpayers without insurance in 2019. Taxpayers who did not have insurance for all of 2017 and do not expect to be insured in 2018 need to make sure to talk to a tax professional, who can help you identify if you qualify for a penalty exemption.

Small-business owners

Some of the largest changes in the tax reform legislation apply to businesses, both large and small. These changes may also affect some rental activities. Corporations will see their top tax rate reduced to 21 percent from the current top rate of 35 percent, starting in 2018. Pass-through entities (LLCs, partnerships and S corporations) and self-employed individuals will be able to deduct 20 percent of their business income, subject to some limits (based on the type of business and income) and phase-outs (based on the partner’s/shareholder’s total income).

Retirement

Under the current law, taxpayers can reconvert a Roth IRA into a traditional IRA. This allows taxpayers to avoid paying high tax bills on an amount of money that had fallen in value after the conversion. Now, taxpayers will no longer be able to reconvert a Roth IRA to a traditional IRA.

The bottom line is that with this new tax legislation, you’re still going to need to get your documents in order and file your taxes, as well as decide if you’re going to itemize and what deductions work for your personal situation. This year, it’s more important than ever to talk to a tax professional about how this affects you to ensure that your taxes are done right and that you have a clear understanding of how changes that take effect in 2018 will impact how you file in 2019.

To learn more about the tax reform, how it may affect you and what steps you can begin taking to reduce what you owe in 2018, visit www.hrblock.com or make an appointment with a tax professional.

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Gig worker gains: Are you grabbing the best possible tax relief?

(BPT) – If you earn all or part of your income these days from freelance or contract work, you’re far from alone.

A CNN report this year estimates some 34 percent of the U.S. workforce is now part of the so-called gig economy, a segment expected to reach 43 percent — representing some 7.7 million workers — by 2020.

The gig workforce includes people paid per task through companies such as Uber and Lyft and those paid per project in more traditional roles such as writer, tutor, entertainer, carpenter or electrician. Some freelance by preference, enjoying the sense of freedom that comes with being their own bosses. Others become gig workers because they can’t find other work. And a certain portion holds down a part-time gig in addition to a steadier job so they can gain extra income or experience.

Because the surge in gig work is relatively new, however, many remain unsure how to maximize the multiple tax breaks available to freelancers. If you’re among them, user-friendly, online tax preparation software available through TaxAct can tell you everything you need to know about maximizing your gig income when tax time rolls around — regardless of your freelance profession. For example, did you know the following expenses are tax deductible?

* Home office and utility costs: Even if you only use a corner of your dining room as your work space, you can count that area as a deduction. Opting for the Simplified Home Office Deduction (instead of the regular deduction) lets you deduct $5 per square foot, with a 300-foot cap, of any portion of your home used exclusively for business. Conversely, the regular-deduction method allows a more specific professional-space deduction while also allowing you to write off the portion of your electricity, gas, cable and cell phone bills pertaining to your business. Further, under either method, a portion of your mortgage interest and real estate taxes could also be deductible under Schedule A guidelines.

* Website expenses: Many savvy freelancers invest in their own websites to further their self-employment. Related fees are all deductible, including anything spent over the last year on domain rights, design, building and maintenance.

* Equipment and supply costs: Save your receipts! If you’ve never taken time to identify and list the costs of doing business, you may be surprised how quickly they can add up in the form of a tax benefit. You can deduct all expenses related to purchasing computers, software (including standard programs such as Microsoft Office), printers, cameras and supplies, pens and paper as well as any other equipment needed to complete your work effectively.

* Professional development fees: Conferences, seminars and other educational opportunities that relate to your freelance career are all deductible. The same goes for travel and accommodations for business-related events and half the cost of your business-related meals. Are you networking through your local trade group or business association? Good news: Dues and membership fees associated with professional organizations also qualify as deductions.

* Unpaid invoices: One of the biggest thorns in freelancers’ sides can be unreasonable employers and/or disorganized accounts payable departments that don’t pay up in a timely manner. Unpaid invoices can be hugely problematic when you’re trying to stay on top of your expenses. Fortunately the IRS has sympathy for such woes. If you previously recorded the invoice as income, you can likely deduct the amount you weren’t paid as a bad debt.

Have more specific questions about your tax benefits as a freelancer? TaxAct has the answers. Let us demystify the complexity of your taxes so you can focus on maximizing your freelance income.

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3 steps to help freelancers and gig economy workers avoid a tax blunder

(BPT) – More and more people are earning extra cash by freelancing in the sharing economy. That may mean writing on the side, playing music on the weekends, driving for ride-sharing services like Uber or Lyft or selling handmade jewelry on Etsy. No matter how the money flows in, gig economy earners must be aware of the related tax obligations and potential pitfalls.

“While it’s easier now than ever to earn extra cash, it’s important for freelancers and independent contractors to get smart about their tax responsibilities,” said Mark Jaeger, director of Tax Development for TaxAct, a leading provider of affordable do-it-yourself tax software. “Gig economy earners must remember they are responsible for paying federal and state income tax on any income earned. And, they’re also subject to self-employment tax, to cover Social Security and Medicare taxes.”

If you’re one of the 55 million Americans who chooses to freelance, it can be difficult to correctly calculate and report to the IRS how much tax you owe. In fact, a recent survey conducted by the National Association of Enrolled Agents found that, “independent contractors participating in the gig economy were cited as among those most at risk of failing to accurately report all of their income.”

Taxpayers who miscalculate taxes owed are likely to get a form called a CP2000 from the IRS. According to the agency, that form means, “the income and/or payment information the IRS has on file doesn’t match the information on your tax return.” That could result in issues with your tax bill.

Jaeger said the best way for gig economy workers to avoid a tax misstep is to be diligent and plan ahead now. He provided the following tips to help freelancers get on track so they’re ready to tackle taxes head-on this tax season.

1. Get organized

Whether you work full time and earn a little extra cash from a side hustle or you’re a full-time contractor, meticulous record-keeping is a must. One option is to keep track of all business expenses and related receipts in one large folder. Jaeger recommends taking that one step further by categorizing receipts into specific folders — for example, one folder for mileage and maintenance records, a second for rent or dues if you lease a workspace, and a third for office equipment and business-related equipment. Once a quarter, as you determine what you’ll owe for quarterly tax payments, make note of which of those receipts are deductible.

2. Keep track of your income

When you’re freelancing, you’re your own accounting department. Not only are you responsible for generating invoices and collecting payment, you must also keep track of all income earned and accurately report it to the IRS. That can get complicated when multiple income streams are at play.

For example, gig economy workers who make money freelancing for multiple clients while also moonlighting as an Uber or Lyft driver should track all income and expenses separately. That means keeping accurate records of any money paid directly by clients and keeping track of income reported on documents such as Forms 1099-MISC and 1099-K. These forms are issued when self-employment income exceeds $600 (1099-MISC) and when a contractor is paid through credit- and debit-card payment processors (1099-K). Come tax time, fill out a Schedule C for every company or client who has paid you to report all of the income you earned.

3. Make estimated tax payments

The IRS requires independent contractors to file and pay taxes on a quarterly basis, even if you anticipate getting a refund at the end of the tax year. Use a tax calculator to help determine whether you should make estimated tax payments. You can also use Worksheet 2.1 in IRS Form 1040-ES, Estimated Tax for Individuals, to figure out whether you must pay estimated tax. Whatever method you choose, make sure you calculate adjusted gross income, taxable income, taxes, deductions and credits.

As a rule of thumb, if you will owe at least $1,000 in taxes, you should plan to pay estimated taxes during the current tax year. Jaeger added, “If you owe estimated quarterly payments but don’t pay them in full, you could face an underpayment penalty by the IRS.”

Earning extra money from your freelance work or side gig may not make you feel like you’re self-employed, but in the eyes of the IRS, you are. By planning ahead, getting organized and doing your own taxes with an affordable online option such as TaxAct, you can avoid tax missteps and stay focused on what matters most: earning income on your own terms!

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Get extra money all year: Tips to adjust your tax withholdings

(BPT) – Every year, nearly eight out of 10 taxpayers receive a federal tax refund. Many of them are more than happy to see that “extra” money drop into their bank accounts. In fact, according to a recent TaxAct survey, 61 percent of tax filers said they’d rather receive a big refund than a larger paycheck throughout the year.

Unfortunately, many of those taxpayers don’t realize they could have that “extra” money throughout the year. That’s right — receiving a refund means overpaying the government in the form of a 12-month, interest-free loan.

“Receiving a refund check simply means you’re getting the money you already earned in the past year,” says Mark Jaeger, director of Tax Development for TaxAct. “It’s money you could have used to pay for things like car payments, student loans, groceries and medical bills — or even that island getaway you wanted to take last summer.”

Fortunately, there is something you can do about it. By making the necessary withholding adjustments to your Form W-4, you can have that money a lot sooner than tax season. Follow these three steps to take control of your finances and help give yourself a raise this year — not a refund next year.

1. Review your current withholdings.

To control your tax withholding and paycheck, you need to adjust the number of allowances (withholding exemptions) you claim on Form W-4. If you’re unfamiliar with Form W-4, it’s the tax document you complete each time you start a job to let your employer know how much money to withhold from your paycheck for federal taxes. To better understand how allowances work, think about it this way:

* To increase your paycheck, claim more allowances to withhold fewer taxes.

* To increase your refund, claim fewer allowances to withhold more taxes.

With one simple form you can make the necessary adjustments to give yourself a raise and put more money in your paycheck instead of waiting to receive it in the form of a tax refund. Take a moment to review your withholdings along with your current financial situation. Is it better for you to receive a larger refund or would additional money in each paycheck benefit you more?

2. Use tools to help calculate the appropriate withholding.

If you are unsure of what number of allowances is appropriate for your tax situation, a variety of tax tools can make calculating your withholdings easier. The Paycheck Plus calculator, for example, will use information like your income and tax deductions to help you determine how to make changes to your W-4 to receive a boost in your refund or more money in your paycheck.

By answering a few quick questions, you can easily adjust your withholdings to see how they impact your paycheck and your tax liability. The tool will also auto-populate your new Form W-4 if you choose to adjust your withholdings.

Using a tool like the Paycheck Plus calculator not only takes the stress out of estimating your withholdings on your own, it also lets you quickly see the potential impact on your finances before you make any official changes.

3. Assess recent life events.

As life changes, so do your taxes. Generally, you should consider adjusting your W-4 any time a major life event occurs, to ensure the right amount of tax is withheld from your paycheck. For example, did you start a new job this year or get a pay raise in your current position? A change in household income can impact your tax situation and require you to modify your allowances.

Did you recently tie the knot? Saying “I do” can affect your tax rate, especially if you and your spouse are both employed. Filing a joint return can lower your tax rate and qualify you for deductions you didn’t have as a single person. The same is true if the opposite occurs — divorce. Untying the knot will place you back in single status and take away many of the tax benefits available to those who are married.

A new baby is also a major life event that greatly influences your tax situation. This is true even if you adopt. Not only can you claim an additional allowance for your new dependent, you may also qualify for various credits, like the Child Care Tax Credit and the Child Tax Credit. Both of those decrease your tax liability. If your withholdings remain the same, you may receive a larger refund, but you will miss out on extra dollars in your paycheck to cover the costs of added expenses, like diapers and formula.

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Where to find rebates, tax credits and rewards for energy-efficient home improvements

(BPT) – If you’re planning to make some home improvements this year, you’re probably thinking about energy-efficient options, knowing they can save you money in the long run. However, many eco-friendly home improvements that help lower your energy bills can also pay off right away in the form of rebates and tax credits.

Whether you’re considering installing an energy-efficient tankless water heater, putting solar panels on your house, or adding a skylight, chances are you can find a program that will put cash back in your pocket for improving your home’s energy efficiency. Here is where to look for rebates, tax credits and rewards for your energy-efficient home improvements:

Qualifying improvements

When you think of energy efficiency, insulation and appliances probably come to mind. But a number of improvements can help reduce your home’s energy consumption, and many of them qualify for tax credits, rebates and incentives from a variety of sources. The kind of improvements that can make your home more efficient and get you some cash back typically include:

* Solar energy systems (such as solar panels)

* Tankless water heaters

* Solar-powered appliances

* Energy-efficient windows and doors

* Skylights and solar-powered blinds

* Wood or wood-pellet stoves

* Home wind turbines

Manufacturer rebates and incentives

Makers of energy-efficient products and appliances often offer their own rebates to homeowners for making eco-friendly upgrades. If you’re considering an energy-efficient upgrade such as installing new windows, HVAC system or tankless water heater, be sure to ask the retailer or installer about any available manufacturer’s rebates.

For example, now through at least Feb. 15, 2017, you can get up to a $650 rebate on select tankless water heaters from Noritz. The average American household spends nearly 18 percent of its energy use on heating water, at a cost of $200-$600 per year, according to the U.S. Energy Information Administration. Tankless water heaters are more energy-efficient because they only heat water when you need it, rather than constantly consuming fuel to keep water hot in a tank. To learn more about tankless water heaters and the rebate, visit www.noritz.com.

Federal tax credits

Although many tax credits for energy-efficient home improvements expired at the end of 2016, some are still available. The federal government offers a tax credit of up to 30 percent for home solar energy systems through Dec. 31, 2019, and there’s no upper limit on the credit, according to EnergyStar.gov.

If you’ll be making energy-efficient home improvements, be sure to talk to your professional tax preparer about any credits or deductions that may be available to you from the federal government.

State-level programs

In addition to federal programs, a number of states offer their own incentives to encourage homeowners to make energy-efficient improvements. For example, Alabama allows homeowners to deduct 100 percent of the purchase price and installation costs of a wood-burning heating system. In Minnesota, homeowners can borrow up to $20,000 at 4.99 percent interest to make energy-efficient improvements such as water heaters, lighting, furnaces, air conditioners, insulation, windows, tankless water heaters and more.

You can find a searchable Database of State Incentives for Renewables & Efficiency at www.dsireusa.org.

Utility company incentives

Many utility companies also offer programs designed to help homeowners reduce energy consumption and save money. Typical programs include free LED or CFL bulbs to replace incandescent bulbs in a home, and rebates or discounts for installing energy-efficient HVAC equipment or programmable thermostats.

The best way to find out what programs your local utility offers is to check out their website or give them a call. You can also find state-specific lists of programs at www.dsireusa.org.

Energy-efficient home improvements pay off over the long-term by reducing your home’s energy consumption and utility bills. With a little bit of planning and legwork, you can also find rebates, tax credits and incentive programs that will also repay your eco-friendly investment right away. To learn more, visit Noritz.com, www.direusa.org, energy.gov, energystar.gov and irs.gov.

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4 life changes that affect your taxes and how to tackle them

(BPT) – Life changes often mean tax changes. Whether it’s getting married, buying or selling a home, moving abroad or having a baby, misunderstanding the tax and financial implications of these life changes can lead to taxpayers making mistakes or leaving money on the table.

Depending on your situation, there are new tax implications that will impact your benefits, tax bill and how you file. If you experienced a life change in 2016, here is a list of tax implications and how they will affect you.

Marriage

Many couples close the book on their “wedding to-dos” once the last thank you card has been sent, but looking at your new tax situation is an important first step in your married life. There are some instances when getting married can have negative implications for a couple’s tax situation. Once you’re married you must file either as married filing jointly or married filing separately. In some cases, a couple where one spouse earns most of the household income will benefit because their overall tax bracket may decrease. However, a couple with two high earners may find they face a higher tax rate than if each paid tax only on their own income and added the taxes paid.

However, there are some ways to protect against potential negative tax implications. After your marriage is official, update your W-4 with your employer to account for your new marital status. If you’re self-employed or a small business owner, make sure to adjust your quarterly estimated tax payments.

Buying a house

Purchasing a home may open the door to more deductions through itemizing if you weren’t already doing so. Once you become a homeowner, you can deduct many of your home-related costs, including your qualified home mortgage interest, points paid on a loan secured by your home, real estate taxes and private mortgage insurance premiums paid on or before Dec. 31, 2016. If you choose not to itemize, you may benefit from other tax advantages such as penalty-free IRA withdrawals if you are a first-time homebuyer under the age of 59 and a half, or residential energy credits for purchases of certain energy efficient property.

New homebuyers should be on the lookout for Form 1098 Mortgage Interest Statement, which is used to report mortgage interest. This form can help you identify these deductions when completing your Form 1040.

Moving abroad

Are you excited to move abroad, but have no idea what will happen to your taxes and how to file? Many Americans living and working overseas will not owe tax to the IRS because of the foreign earned income exclusion and foreign tax credit. However, even if you qualify for those benefits, you have to file a U.S. tax return each year if you received income over the normal filing threshold.

It is also important to understand your Social Security coverage before moving abroad. Knowing whether your earnings overseas will be subjected to Social Security taxes in the U.S. or the country you are residing in will be an important factor when analyzing the economics of your move.

Having a baby

A new baby means you may be able to take advantage of tax breaks, including the Child Tax Credit (CTC). The CTC is worth up to $1,000 for each qualifying child younger than 17, a portion of which may be refundable as the Additional Child Tax Credit (ACTC) depending on your income. A tax preparer can help you understand the qualifications to determine whether a child is considered qualified for purposes of the CTC. Some of those qualifications include but are not limited to their relationship and residency.

You may also qualify for the Earned Income Tax Credit (EITC) which is a benefit for working people with low to moderate income that reduces the amount of taxes you owe. However, it’s important to note that due to the new “Protecting Americans from Tax Hikes ACT” or PATH Act, this year the IRS is required to hold any refund from those claiming the EITC and ACTC until at least Feb. 15. This delay will be widely felt by tax filers who typically file as soon as the IRS accepts e-filed returns and who normally expect to receive their refund by late January.

To learn more about this new tax law change, how it may delay tax refunds in January and February, and H&R Block’s free solution to this delay, visit www.hrblock.com/refundadvance or make an appointment with a tax professional.

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