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Tax Tips for Remote Workers: Can you claim the home office deduction on your tax return if you worked from home?

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You may claim the home office deduction on your tax return if you used part of your home for business. U.S. tax law allows you to deduct expenses related to the business use of your home on your tax return. The tax deduction applies to both homeowners and renters as well as all types of homes. You determine the amount of expense related to business use based on a standard rate provided by the IRS or a calculated rate established by the percentage of your home utilized specifically for business. The two requirements to claim the home office tax deduction include: (1) regular and exclusive use and (2) principal place of your business. Because the COVID-19 pandemic required millions of people to work from home during 2020, many people are wondering if they can claim the home office tax deduction on their 2020 tax return. Below, I will explain in detail the home office deduction requirements to help you determine if you can deduct home office expenses on your tax return. Fair warning,

Studying for the CPA Exam: Five tips to save time while studying for the CPA exam

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As you know or will find out soon, the process of becoming a CPA is not easy! The act of preparing for, taking, and passing all four parts of the CPA exam requires hundreds of hours of hard work. During this seemingly never-ending and challenging journey, you will experience fatigue and burn-out; however, in my opinion, the worst thing you can do during the CPA exam process is take a long break from studying and taking the CPA exams. I passed all four sections of the CPA exam during a six-month period. Luckily, I did not have to retake any of the exams, which is a common occurrence as the average passing rate is around 40-50% per exam. Having personal experience dealing with the CPA exam process, I want to share valuable tips for conquering the CPA exam. By the time I reached my final exam, I felt confident in my study routine. Most importantly, I felt that my process for preparing for each exam improved each time. I learned how to prepare more efficiently, which saved me lots of t

Tax Tips for Remote Workers: Where do you pay taxes if you work remotely?

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Before the COVID-19 shutdown, the ability and choice to work remotely from home was growing in popularity. The popularity of remote work continues to grow thanks to advances in telecommunication technologies, which allow individuals to work remotely outside a traditional office environment while still remaining personally and collaboratively productive. Now, as the entire workforce proved its ability to successfully work from home during the shutdown, I expect exponential growth in remote work offerings. Because of remote work culture, we will see an increase in the number of people working remotely for companies that are based in different states. Remote work outside of your company's state will affect your tax situation. Below, I will explain how and where you pay taxes if you work remotely. Related Posts -  Unemployment Income: What to know about unemployment income if you've been laid off or furloughed -  Understanding your Form W-2 -  State Tax Refunds: Are state tax

How to report taxes when you live in one state and work in another?

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It is very possible that you live in one state and work in another. If so, you may face some confusion while filing your tax return. State laws may require you to file a tax return in multiple states, increasing your chance of error during the tax return process. Other situations may also require you to file a tax return in multiple states, including but not limited to moving during the tax year or having a short term job/internship in another state during the tax year. If you work in one state and live in another or face a similar situation, please continue reading below to learn about the tax reporting requirements of living in one state and working in another. Related Posts -  File your taxes online for free: The IRS Free File Program -  State Tax Refunds: Are state tax refunds taxable? -  Four reasons why you should file your tax return early -  Tax Tips for Bloggers: Four things every blogger should know What are the tax filing requirements when working in a different

The Latest in Tax News: April 2020 Edition

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Textbook Tax presents its monthly tax news update. A quick read discussing various tax news, tax stories, and tax events trending in the world of tax during the month. The following tax topics cover the month of April 2020. The tax topics presented represent my favorites in tax news and tax-related events. Please comment any tax news stories you found interesting for the month of April. Additionally, please email me or connect with me on social media for the monthly tax news update sent straight to you! Related Posts -- Prior Weeks' Tax News -  January 2020 - February 2020 -  March 2020 COVID-19 News  -  Coronavirus (COVID-19) Tax Impact - Will you get a stimulus check? Explaining the $2 trillion stimulus package -  Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns Tax News for April 2020 Tax Topic: Many countries easing the tax residency rules due to the virus Tax Story Summary: Several countries reassure

Four reasons why you should file your tax return early

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The U.S. tax return filing due date is April 15 each year. Additionally, you may choose to file an extension that extends your tax return filing due date to October 15 (Please see  Tax Extension: How to file a tax extension? ). Because of COVID-19 and the related economic shutdown, the IRS granted all U.S. taxpayers with April 15 due dates an automatic tax return filing extension to July 15 (Please see  Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns ) . However, while your tax return is now due on July 15, you should still file your 2019 tax return early. Like any task, it may be tempting to procrastinate filing your tax return, but by doing so, you may face issues later on relating to your taxes and information. Therefore, you should file your tax return as soon as possible. Below are four reasons why it is beneficial to file your tax return early. Related Posts: -  The Complete List of Tax Credits for Individuals -  File y

Virtual Currency Trading: The wash sale tax tip that every crypto trader should know

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As virtual currency trading and ownership continues to grow, the U.S. regulatory policies and guidance remain vague, confusing, and inconsistent. However, based on current law, tax planning methods exist to help you lower your crypto tax bill. In the current regulatory environment, a tax loophole, or a tax planning strategy to legally reduce your tax liability, exists for crypto traders. The tax strategy focuses on the applicability of the Wash Sale rule as it relates to trading cryptocurrencies. It is important to note that the regulatory environment surrounding virtual currency is rapidly evolving, and so, crypto traders should remain up to date on newly released crypto guidance and policy. Below, I will detail the wash sale rule as it relates to trading crypto as well as explain the tax strategy for lowering your cypto tax bill. Every crypto trader should know the wash sale tax tip. Related Posts -   Cryptocurrency Taxation: How does the U.S. tax cryptocurrency? -  Tax guidanc

Unemployment Income: What to know about unemployment income if you've been laid off or furloughed

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As the U.S. economy continues to rapidly deteriorate, approximately 17 million Americans have filed for unemployment in the past four weeks. Just last week alone, approximately 6.6 million Americans filed unemployment claims. I expect these unprecedented times to continue as the worldwide economic shutdown continues with no end in sight. Related Posts -  Tax Refund Schedule: When should I receive my tax refund from the IRS? -  Rental of Residence: How to rent your house tax-free? -  How to determine your tax filing status? -  Must know tax rules relating to your IRA In response to the pandemic and related economic shutdown, the U.S. government passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act expanded unemployment benefit relief. Namely, the CARES Act expanded the unemployment eligibility definition and increased the unemployment benefit by $600 per week for four months. Because of the increase in unemployment claims, it is important

Tax Refund Schedule: When should I receive my tax refund from the IRS?

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The U.S. Treasury Department and the IRS have officially extended the tax filing due date from April 15, 2020 to July 15, 2020. This extension applies automatically to all taxpayers with an original April 15 tax filing due date. For more information, please read  Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns . Tax filing season is in full swing. As stated in the disclaimer above, the disruption caused by COVID-19 resulted in the Treasury Department and IRS automatically extending the U.S. tax filing due date from April 15, 2020 to July 15, 2020. While this automatic extension allows you more time to file your tax return, why wait? Related Posts -  The Complete List of Tax Credits for Individuals - Are state tax refunds taxable? -  How to file a tax return for your kids when they make money in 2019? -  IRA Income: Must know tax rules relating to your IRA The IRS begins accepting tax returns near the end of January each ye

The Latest in Tax News: March 2020 Edition

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Textbook Tax presents its monthly tax news update. A quick read discussing various tax news, tax stories, and tax events trending in the world of tax during the month. The following tax topics cover the month of March 2020. The tax topics presented represent my favorites in tax news and tax-related events. Please comment any tax news stories you found interesting for the month of March. Additionally, please email me or connect with me on social media for the monthly tax news update sent straight to you! Related Posts -- Prior Weeks' Tax News -  January 2020 - February 2020 COVID-19 News  -  Coronavirus (COVID-19) Tax Impact - Will you get a stimulus check? Explaining the $2 trillion stimulus package -  Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns Tax News for March 2020 Tax Topic: Stranded foreign visitors may be subject to U.S. taxes Tax Story Summary: Foreign citizens are stuck in the U.S. because of

Coronavirus (COVID-19) Tax Impact - Will you get a stimulus check? Explaining the $2 trillion stimulus package

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After much debate, Congress passed the highly-discussed stimulus package on March 27, 2020. The $2.2 trillion coronavirus stimulus package, named the CARES Act, includes aid to Americans via direct cash assistance, additional unemployment income, and additional business tax credits. Because the CARES Act is a 880 page legislative document, I thought it would be helpful to provide a quick summary detail about the stimulus package. Namely, I will focus on the direct cash assistance portion of the bill as this seems to be the area that interests most individuals. So, if you want to learn about the stimulus checks, please continue to read below where I answer some frequently asked questions about the coronavirus stimulus check including: Will I get a stimulus check from the coronavirus stimulus package? Am I eligible for the stimulus check? When will I receive the stimulus check? How to maximize my stimulus check? Related Posts: -  Tax Tips for Bloggers: Four things every

Coronavirus (COVID-19) Tax Impact - Relief from timely filing of 2019 Federal income tax returns

The Coronavirus (COVID-19) pandemic has officially disrupted the 2019 tax filing season. On March 13, 2020, President Trump issued an emergency declaration under the Disaster Relief and Emergency Assistance Act. The emergency declaration instructed Steven Mnuchin, the Secretary of the Treasury, to provide tax deadline relief to Americans affected by the COVID-19 pandemic under section 7508A(a). As a result, on March 18, 2020, the Department of the Treasury and the IRS released Notice 2020-18, which superseded and restated its earlier Notice 2020-17. The Notice provides relief to "affected taxpayers," which I will detail below. Related Posts: -  File your taxes online for free: The IRS Free File Program Explained -  Tax Extension: How to file a tax extension? -  Understanding your Form W-2 -  Five easy steps to lower expenses and decrease spending in 2020 -  Coronavirus (COVID-19) Tax Impact - Will you get a stimulus check? Explaining the $2 trillion stimulus package

Tax Tips for Bloggers: Four things every blogger should know about taxes

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The blogging profession has expanded rapidly in the past several years. Because of the popularity of blogging, it is important that the blogging community understands the tax laws that apply to the profession. Like any other job, when you earn money from your blog, you must report and pay taxes on the income. While you may be employed by a blog, generally speaking, most individuals in the blogging community are self-employed bloggers; therefore, it is crucial for you as a blogger to understand the tax laws surrounding self-employed individuals. Below, I will detail four tips that every blogger should know about their tax situation. Those tips include estimated tax payments, self-employment tax, business versus hobby analysis, and deductible expenses. Related Posts: -  The Complete List of Tax Credits for Individuals -  Tax guidance on virtual currency transactions -  Take advantage of a declining market by saving on taxes Tips for Bloggers: Four things every blogger ne