Personal tax returns on extension – the filing due date is coming up
If your 2021 personal income tax return is waiting to be completed and currently on extension, please note that the filing due date, October 17, 2022, is less than a month away.
Practice Owners: Leadership Versus Management
Leadership and management are two distinct functions at your practice.
Leadership
Did you know that great business leaders don’t ask what their staff can do for them? Instead, great leaders ask what they can do to help their staff improve. Perhaps the next time a staff person makes a mistake, don’t complain that the employee hurt your practice. Take a few minutes to realize that you may have let that employee down and consider ways to help them improve at their job.
Yes, that sounds backward, right? But if you think about how leaders are in a position to help their underlings develop, you’ll agree that the relationship detailed above actually makes a lot of sense.
Management
According to The One Minute Manager (a 45-minute must read business classic) available on Amazon at: https://www.amazon.com/New-One-Minute-Manager/dp/0062367544, effective managers follow these three steps when helping their staff do their jobs to the best of their abilities:
- Clearly explain the work to be done
- Find any reason to praise employees in public
- When mistakes are made, reprimand in private and start the meeting by giving the staff person time to explain why they did what they did
Utilizing Your Family’s 529 Accounts For The Upcoming Academic Year
Have you saved money in a 529 plan to pay for your kids’ college? Wondering which education expenses you can pay from the 529 account as qualified expenses and which expenses are non-qualified?
With students heading back to school, now is a great time to begin planning for your 529 plan distributions for the coming academic year. Please keep in mind that 529 plan distributions used for qualified education expenses are 100% tax-free while distributions used for non-qualified education expenses result in the earnings portion of those distributions being subject to income taxes plus a 10% penalty.
The following expenses qualify as an educational expense for 529 plan distributions:
- Tuition and fees at post-secondary educational facilities such as colleges and universities, both graduate and undergraduate. Vocational and trade school institutions plus two-year colleges qualify as well.
- Student loan payments – subject to a lifetime cap of $10,000.
- College room and board fees if the student is enrolled at least half-time. Off campus housing and meals also qualify, capped at the cost of the on-campus room and board fees (based upon the college’s published cost of attendance (COA)).
- College books and school supplies. Often, this limit is set by the college.
- Computer and tech expenses that are required for enrollment by the college and required by specific classes. This qualified expense also includes internet expenses incurred by students.
- Special needs equipment needed by a student to attend a post-secondary institution. Travel expenses, generally not allowed as a 529 plan qualifying expense, often qualify for special needs students.
- Tutoring costs.
- For grades K – 12, up to $10k per year can also be used for tuition at private schools.
And these expenses do NOT qualify as an educational expense for 529 plan distributions:
- Premiums paid for student health insurance while attending post-secondary schools, even for a policy offered by the school.
- Travel costs to and from the qualified school, such as airfare, gas and hotels.
- Extracurricular activities while attending school.
- For grades K – 12, home schooling costs unless determined by your state that home schooling qualifies as a form of private school.
If you child has opted to study abroad, 529 plan distributions may still qualify to be used for foreign educational expenses. Several hundred foreign educational institutions accredited by the US DOE qualify count. Parents and students can check the link provided by the www.savingforcollege.com to learn which foreign schools allow for tax-free 529 distributions.
Third Quarter Tax Estimates Due 9/15
Don’t forget – third quarter estimated taxes are due 9/15.
For anyone paying estimated taxes, we now recommend that you make those payments online. It’s safer than sending the IRS a check, and you receive an instant confirmation that the payment has been processed. Sadly, the IRS hasn’t done a great job lately at processing their mail.
To make the payment online if you haven’t yet set up an account with the IRS, simply:
- Go to irs.gov
- Click on Make a Payment (https://www.irs.gov/payments)
- Click on Pay Now with Direct Debit (https://www.irs.gov/payments/direct-pay)
- Click on Make a Payment (https://directpay.irs.gov/directpay/payment?execution=e1s1)
- Select the following
- Reason for Payment: Estimated Tax
- Apply Payment To: 1040ES
- Tax Period for Payment: 2022
Answer the rest of the questions and you should be all set to make the payment.
Most states also allow you to pay any state estimates due using their Tax Department website.