DiSabatino CPA Blog

DiSabatino CPA Blog

A blog by Michael DiSabatino CPA with topics on Tax Savings, Business, Management and more...

Retirement Basics: Understanding Tax Efficiency

One of the basics in retirement is to be as tax efficient with your income as possible. In 2019, income tax rates range from 0 to 37 percent, plus a potential 3.8 percent net investment tax. Understanding how these progressive tax rates apply to ordinary income creates a tremendous retirement planning opportunity.

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The Tax-Free Retirement Savings Option - Is a Roth IRA right for you?

If you are looking for tax-free income and more flexibility during retirement, perhaps you should look into investing in a Roth IRA. While Roth IRA contributions are not sheltered from current taxes like contributions to traditional IRAs, they offer other tax benefits during retirement.

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Modified Adjusted Gross Income - What is it?

Under the Affordable Care Act, eligibility for income-based Medicaid and subsidized health insurance, such as Covered California, through the marketplaces is calculated using the modified adjusted gross income (MAGI) of your household.  Let's take a look at how this MAGI is different then the Adjusted Gross Income found on your tax return. 

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Considering divorce? Think about your tax filing status

If you're thinking about divorce, you should also be considering what tax filing status you should choose. Here's why.

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Changes to the kiddie tax

Changes to the kiddie tax

The Tax Cuts and Jobs Act has changed the way unearned income is taxed for your children.

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Better Bartering Basics

Better Bartering Basics

The IRS is clear on their point of view. If you barter you must include the barter activity's fair market value as income on your tax return in the year the barter activity is performed. But is it really that simple? Here are some things to consider if you barter.

What is fair market value? The classic definition is the price someone is willing to pay and someone is willing to receive for the exchange of goods or services. But we all know this requires a level of judgment. What if an item is on sale when the barter activity is performed? Are prices always the same for a similar item or service? Prior to establishing the value of a barter item, shop around and take the lowest defendable value possible for your bartered item.

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Do You Need to File a Tax Return?

Do You Need to File a Tax Return?
Getting this wrong can cost you

One of the more common tax questions is whether you need to file a tax return this year. The answer is: It all depends. Here are some quick tips to help you determine your answer.

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Foreign Earned Income Exclusion

Foreign Earned Income Exclusion

As a U.S. citizen or resident working abroad, you may be able to exclude from income all or a portion of your foreign earnings.

To claim the foreign earned income exclusion, your tax home (the general area of your main place of business, employment, or post of duty) must be in a foreign country throughout the period

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Reasons to File Your Taxes Early

Reasons to File Your Taxes Early

While late changing tax laws make it impossible to file your income tax return prior to January 20th this year, there are a number of reasons to file your return as soon as possible. Here are five of the most common:

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Not all "income" is taxable

Not all "income" is taxable

There are several sources of revenue that are not subject to income tax.

Here are the most common sources of money that are not taxed on your federal income tax return:

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Non-taxable Income for Those in the Armed Services

Non-taxable Income for Those in the Armed Services

One of the benefits available to the men and women of our Armed Services and, in many cases, staff supporting them is the ability to exclude items from taxable income. Here is a list of the most common items that may often be omitted from income tax.

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Don't pay tax on nontaxable income

There are several sources of revenue that are not subject to income tax.

Here are the most common sources of money that are not taxed on your federal income tax return:

* Borrowed money, such as from banks or personal loans.

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