October 15th Extension Deadline
The deadline to file your extended 1040 return is approaching fast. Here are some things to keep in mind for last-minute filers: The extension to file is not an extension to pay. If you owe on your tax returns, you may have some penalties and interest if you waited until October to pay. Even if…
What is the difference between Traditional and Roth retirement plans?
Let’s talk about how you actually put money into the retirement plan. In a traditional retirement plan, money is put into the plan PRE-TAX, before any taxes are deducted. This can reduce your taxable income for the year, but doesn’t mean that you actually avoid the tax on that income. You end up having to…
What is the difference between a 401k, a 403b, and an IRA?
The world of retirement plans can be a little confusing if you aren’t familiar with the lingo. First, there are employer sponsored plans. In an employer sponsored plan, the employee has money taken out of their paycheck to put into the retirement plan. The employer may also offer to contribute a matching amount. Different types…
Top Three Clergy W-2 Mistakes
Listing wages or withholdings in Boxes 3 through 6. Clergy are treated like self-employed individuals in regards to Social Security and Medicare taxes. They should not have taxable Social Security or Medicare wages, and they should not have Social Security or Medicare withholdings. Including the Housing or Parsonage allowance in places that it shouldn’t be….
No Time Like the Present to Make Amends (to your Tax Returns!)
If you find out that you forgot to report something on your tax return or you get a corrected W-2, it’s not the end of the world. You will probably just have to amend your tax returns to include the correct information. However, there are some very important reasons why you should submit amendments as…
Getting a Second Opinion on Clergy Taxes
Clergy taxes are an extremely narrow niche of tax law, so many generalist tax companies and software packages are not familiar with the rules. On top of this, the Tax Cuts and Jobs Act drastically changed the way that members of the Clergy can claim expenses. If you didn’t file with Clergy Financial Resources, it’s…
Top Ten Tips for 1040s
Here are ten tips to avoid errors when filing your 1040 returns. Math and typing errors- Using tax software or a tax firm to prepare your return greatly reduces the chances of mathematical errors, but it is still easy to transpose digits while doing data entry. Even if you have someone prepare your return, check…
Turbocharge your 403(b) Savings
In 2019, you can elect to contribute up to $19,000 to your 403(b) account out of your salary. If you are age 50 or older at the end of the year, you can also make a catch-up contribution of $6,000. In total, you could contribute up to $25,000 to your 403(b) account. Why is this…
Top Three Reasons to Save with 403(b)
Reason 1: Income Tax Deduction Contributions to your 403(b) account are tax deductible for federal income abs social security taxes. Putting money into the 403(b) reduces your taxable income for that year. For example, if you put $5,000 into your 403(b) account and your federal income tax rate was 10%, by deferring that income you…
Homeowners Exclusion Can Reduce Tax on Home Sale
Are you selling a personal residence in 2019? If you lived in the home for two out of the five years before the sale date, there may be some good news for you. Under current tax laws, IRS allows for individuals to exclude up to $250,000 of income from the sale of a personal residence….
