Tax Planning

Is Your Side Income Considered a Hobby or Business for Tax Purposes?

Is Your Side Income Considered a Hobby or Business for Tax Purposes?

People have been increasingly finding ways to make some additional income outside of their full-time jobs.  

Unfortunately, just because you're able to make money from a side job or "side hustles," as some have called them, doesn't necessarily mean you'll be able to treat them as a business for tax purposes. The distinction between hobby and business ultimate determines if and how you're able to deduct expenses associated with your side activity, and that could have significant tax benefits or consequences. 

Should You Use a 529 Savings Plan to Save for Education?

Should You Use a 529 Savings Plan to Save for Education?

The cost of going to college continues to get more expensive every year. According to the College Board, higher education costs increased about 3% from last year and as much as 40% from 2005. For example, the annual cost to attend Harvard University as an undergraduate student was $40,000 in 2005, but now carries a $60,000 price tag. 

As a result, it's become more important for families to prioritize saving for their children's education. One particular vehicle that could be advantageous for saving for college is a 529 plan. 

Are You Missing Out on the Home Office Deduction?

Are You Missing Out on the Home Office Deduction?

The first Sunday in February brings a lot of excitement with the last NFL game of the season - the Super Bowl. But February also marks the start of the busiest time of the year for accountants - tax time, or as some tax professionals consider it, their own personal "Super Bowl." 

By now, you should have received most of your pertinent tax documents and may have already gotten organized and started working through what deductions may be available to you. One deduction, the home office deduction, is not nearly utilized as much as it could be. The IRS claims that 26 million Americans have home offices, but just 3.4 million taxpayers claim the home office deduction.