January 04, 2019, 8:54 AM
Whether you're going to owe big this year or get something back, it's still a chore to go through the motions and get everything submitted by that April deadline.
But, have you considered whether you are taking advantage of the right deductions? Before you submit your return, here are some of the most overlooked tax deductions that you may want to include this year.
A Second Home.
Use Schedule A to itemize any expenses related to a second home such as property taxes and mortgage interest. Remember you can count a boat or RV as a second home as long it has a bathroom and kitchen.
Not every investment is a winner, and you can take deductions on those that you sold at a loss in the prior tax year. This would be shown as reduced earnings against the same class of stocks, such as other long or short-term stocks.
FSA and HSA Contributions.
Healthcare is expensive, and you still have some hefty deductions in the form of Flexible Spending Accounts ($2,650 for 2019) and a Health Savings Account ($3,500 for an individual).
Military Moving Expenses.
While most moving expense deductions have been eliminated, members of the armed forces are still permitted to use this valuable deduction.
2018 marked a year of several natural disasters from major hurricanes to flooding to massive wildfires. If you were the victim of one of the tragedies and in a federal disaster area, you are eligible for some tax relief.
Home Office Space.
If you are self-employed or make some extra cash on the side using a home office, you can claim a deduction for up to 300 square feet of home office space.
Service Animal Training.
IRS Publication 502 states that dog owners can deduct the cost of training and maintaining a service animal to help with hearing-impaired, visually-impaired, or other physical disabilities.
If things didn't go as planned at the casino, you can deduct gambling losses (with the right documentation) up to the extent of your winnings.
Student Loan Interest.
Student loan interest is tax-deductible, and a child can even write off up to $2,500 per year even if their parents are making the payments, provided that child is not considered a dependent of those same parents.
There is now a tax credit equal to 100 percent of the first $2,000 paid in college expenses each year, plus 25 percent of the next $2,000. College expenses refer to payments for tuition, fees, and books.
Stress-Free Banking with City Bank
Whether your goal this year is to buy a home or car, save more, or start a business, City Bank can help. We offer local relationship banking combined with innovative online and mobile tools. Contact us now to learn more about how our services can help you achieve your goals.
*This is for informational purposes only and you should contact a professional tax advisor with any specific tax filing questions.
January 02, 2019, 10:42 AM
It is almost as popular a practice to break a New Year's resolution as to make one in the first place. If you're just going to create a list of promises to yourself and then chuck it to the side within a matter of a few days or weeks, what's the point?
Now that 2019 is upon us, should you even bother reflecting on the past year and creating some goals for the coming one? Experts agree that roughly half of people who do have a successful list of resolutions have a few things in common when it comes to their plans.
Choose the Right Resolution
Time management company Franklin Covey discovered that about one-third of New Year's resolutions don't make it until February. The main reason for this is that people don't put enough thought into choosing their goals.
Not only should a resolution be achievable (so you don't get discouraged) but it should also be meaningful. When you create your resolutions for 2019, they should be specific ("I want to lose 10 lbs" instead of "I want to lose weight."), measurable (see the last criteria), achievable (realistic but a slight stretch is ok), relevant (it matters to you), and time-bound (you set a deadline).
Create a Plan
Wishing doesn't make it so, which means that you'll need to create a plan to achieve each of your resolutions. Let's abandon the weight loss resolution and look at something else. Assuming you want to save $100 per paycheck to go towards a down payment on a new home, how will you achieve this? Have you identified expenses you can cut back on to help you save or ways to earn some extra income?
Few people achieve all of their goals seamlessly, and this isn't the reality for most people. Change can be difficult, so it's important that you have a plan to tackle hurdles along the way. Going back to the money-saving example, can you break it down into $50 per week of savings? Or, maybe you need a few months to get to your goal of saving $100 per paycheck. If so, create a schedule that you can keep.
Make it a Group Effort
There's a good chance that you're not the only person looking to make some changes in the coming year. Sure, you could probably find a Facebook group designated just for "2019 Resolutions," but you can also keep your support system more intimate. Just let a few people close to you know what you're doing and ask them to give you some encouragement or hold you accountable.
If You Fall a Little Short
There are no failures. As long as you keep trying to make positive changes in your life, you can consider each attempt a success. What matters the most is that you treat yourself with kindness and continue to create goals that will improve your health, happiness, and future.
Can City Bank Help You Achieve Your Goals in 2019?
Many New Year's resolutions are financial in nature. If you want to save more cash, get approved for a credit card, open a business, or buy a new home in 2019, find out how City Bank can help you achieve your goals.