Everyday Law helps you identify the ways the law can make your life better. Find tips about timely legal topics and learn how people like you manage their issues. Rocket Lawyer makes the law work for you at a price you can afford.
Rocket Lawyer is excited to be exhibiting and presenting at PERKS NYC on April 18, 2019 at the Metropolitan Pavilion in New York. PERKS Conventions are nationwide expos that exhibit the country’s most forward-thinking employee services, perks and amenities.
Did you know that 70% of employees will need legal help this year?
Rocket Lawyer’s VP of Legal Benefits, Ken Webster, will be presenting a workshop on the key legal milestones that employees will experience and why providing affordable access to everyday legal support can increase employee satisfaction, retention and acquisition.
The Rocket Lawyer team will be located at booth 323 and will be welcoming attendees with big smiles, swag and encouraging benefits and HR leaders to sign up for a limited time free 2019 trial, only available to PERKS NYC attendees.
If you’re in human resources, people operations, benefits, culture or wellness, consider attending a show this year in either NYC (April 18), Boston (May 2), LA (Sept 12) or Chicago (Oct 3). The full PERKS schedule and more details can be found here.
You’ve worked hard to build up your business. From late nights and hard work to tackling significant self-doubt, it’s an understatement to say you’ve come a long way. That’s why you’re not about to let potential lawsuits stand between you and your entrepreneurial dreams.
Unfortunately, lawsuits can happen, even to the best of us. It’s easy to make a mistake when you’re tired, or make a decision when you don’t have all the information available. But as a small business owner, even the tiniest of errors could land you in legal hot water.
So what can help protect your small business from the kind of financial harm that could come from dealing with lawsuits? The solution might surprise you…
It’s business insurance.
Why business insurance protects your small business
Let’s say you’re a self-employed tax preparer. You pride yourself on your meticulous attention to detail, especially when it comes to helping clients make the most of their tax deductions. So when a customer accuses you of making an error on their tax return that caused them to get audited, you’re completely surprised. Before you know it, the customer is suing your business as a result of that single—yet costly—error.
Normally, you’d be required to pay your legal fees out-of-pocket, as well as pay out if there was a judgment made against you. But if you have business insurance—particularly errors & omissions coverage, in this scenario—your policy might pay some or all of those costs for you.
Business insurance is designed to provide your small business with multiple legal protections in the event things don’t exactly go according to plan. Whether a customer accidentally gets hurt in your office or you make an error within the course of your work, business insurance can provide you with an essential safety net.
Think of it as being similar to auto or home insurance; without it, you could be required to pay out-of-pocket for any accidents, claims, or lawsuits. And when you’re a small business owner, that “out-of-pocket payment” could end up shutting down your business for good.
If you want to protect your small business from going bankrupt as a result of a lawsuit, business insurance can make the essential difference between an event that is a minor blip on your business’s radar and a huge catastrophe that ruins your entrepreneurial dream.
Now that you know the importance of business insurance, what steps should you take to make sure you’re protected?
How to find the right policy for your business
Not all business insurance is the same. For example, if you own a restaurant, you’re not going to be buying the same policies as the person who owns a tax preparation business. And depending on how many employees you have and where you’re located, you might be legally required to have specific insurance coverages.
It can be a lot to handle, especially if you’re just starting out building your own business. Try using these tips to make sure you’re finding the right policy, so you can stay protected from potential financial damage that may come from resulting legal issues:
Talk to people in your industry and see what kinds of insurance they have. This can give you a good start on what type of policies you should be looking at based on the trade you’re in.
Reach out to state or national-level trade associations to see if they have any recommendations for you. Trade associations can be fantastic sources of information regarding what business insurance policies you should look into, especially if you don’t know anyone else in your industry.
When you’re ready to buy your insurance coverage, set aside an hour or two to focus on exactly that. Gather up all the info you’ll need to answer essential questions about your business, like your employee count, your estimated revenue for the year, the specific services you provide, etc.
Don’t settle for the first policy you find. In fact, we recommend shopping with a small business insurance brokerage that offers you a choice of multiple policies tailored to your exact business needs. It’s a great way to see exactly what you’re buying, as well as have greater control over your budget.
Double-check that you’ve picked the right coverage for your business. Take a look at how much protection it provides you, how long the policy lasts for, and if it truly provides coverage for all of your services and potential exposures.
Business insurance can provide an essential layer of legal protection for your small business—don’t be caught without it!
Legal disclosure: Simply Business, Inc. is not a law firm and does not provide legal advice This article is intended to be used for informational purposes only and is not a substitute for obtaining professional legal advice.
Simply Business is an online business insurance brokerage that specializes in one thing: protecting the business our customers are working hard to build. We make it possible for our customers to choose the exact insurance coverage they need, so they can get back to growing their businesses.
As tax season gets into full swing and Americans everywhere gear up for that ever looming April 15th deadline, there is no shortage of information for business owners—or for traditional nine-to-fivers—about how best to handle their tax situations.
But what about for those individuals who fall somewhere in between—who have a traditional 9 to 5 job while also running a small business that generates income on the side?
Being a side-hustler comes with its own set of tax requirements and special considerations that may not be relevant for those who solely run their own business or those who solely work a traditional 9 to 5.
If you’re busy burning the candle at both ends as a side hustler, these eight must-know tax tips are for you:
1. Understand your business tax obligations
Whether you’re a freelancer or have a formally structured business such as an LLC or C-Corp, any person who brings in self-employment income not covered by a traditional employee W-2 is expected by the IRS to make regular estimated tax payments. These payments cover not only your standard income taxes but also self-employment and alternative minimum tax obligations.
To determine your estimated tax obligations for the current year, the IRS recommends using the estimated tax calculation worksheet within Form 1040-ES as a guide. This document will help you configure your expected gross income, deductions, and credits for the year to determine your tax liability.
From there—provided you expect to owe more than $1,000 in annual taxes on your self-employment income—you’ll need to make quarterly payments either online, by phone, or by mail to avoid a penalty for late payment.
2. Use a separate business bank account and credit card
You’ve likely heard it before, but the importance of using a separate business bank account and credit card for your business expenses can’t be overstated—especially when you have a side hustle.
When you’re working from home or on-the-go alongside your regular job, it is all too easy for the lines to become muddled between what is business and what is personal. And when you look back on your finances at the end of the year to prepare for tax season, it can be almost impossible to tell which is which.
To avoid any confusion, keep a separate business bank account and credit card under the name of your business and vow to use those accounts for business-related expenses. Any overlap will only create additional confusion—and it could make you more susceptible to a tax audit.
3. Maintain your bookkeeping monthly to avoid tax-time stress
When you have a side hustle in addition to regular income, tax time is already stressful enough. But if you haven’t been maintaining accurate books for your business throughout the year, that tax season stress can quickly escalate.
Ideally, you should be maintaining your business accounting through an online tool. But even if all you’re using is a simple spreadsheet, you should still take the time to reconcile your business revenue and expenses each and every month.
4. Automate putting aside your estimated tax payments
One of the hardest things about managing business cash flow as a side hustler is having to hold money in your account that is earned and freely available to you—but that needs to be set aside for paying estimated taxes. It can be hard to keep track of how much you owe to the government in the first place, and it takes discipline to continually keep that money set aside for taxes as opposed to taking a share of the profit or reinvesting in your business.
Avoid this unnecessary battle of wills and constant number crunching by creating a second business bank account into which you automatically transfer savings for estimated taxes.
As a starting point, most accountants will recommend saving around 25 percent of your gross profit for federal taxes, plus another 5 percent for state and local taxes if that applies in your location.
By automatically saving towards your tax payment either with every transaction you take in or on a weekly or monthly basis, you can keep track of exactly how much you need to save for estimated taxes and have a clear-cut policy to follow when opportunities arise that tempt you to dip into that extra cash on hand.
5. Consider increasing your employee tax withholdings
Does it take every ounce of your self-control to see estimated tax savings sit in your bank account when you could be reinvesting in your business? If you have traditional W-2 income in addition to your side hustle—or if you’re married and filing jointly with a spouse who files a W-2—there may be a better way.
By refiling your statement W-4 with your employer, you can actually choose to have additional taxes withheld (state and federal) from your regular employee paychecks. This additional withholding can cover the estimated taxes for your side hustle, eliminating the need to save for and pay quarterly estimated taxes within your business accounts.
6. Remember these often overlooked business deductions
With all of the time and energy that you put into your side hustle on top of a full-time job, even the most motivated and optimistic of entrepreneurs can easily be discouraged by the idea of setting aside a full 25 percent of the money you make for Uncle Sam.
But before you panic remember this: Your tax liability is calculated by using 25 percent of the gross profit of your business—not your business’s revenue. This means that any expense considered “ordinary and necessary” to the operation of your business can be deducted from the total amount that you’ll be taxed upon.
If you’re unsure what qualifies as “ordinary and necessary,” here are some common examples of deductible expenses that side hustlers often overlook:
● Website Hosting, including domain registration, hosting services, and email
● Professional Services, including graphic designers, consultants, accountants, business coaches, virtual assistants, and more
● Apps and Software, including accounting software, project management apps, social media tools, and any other one-time or ongoing subscription costs
● Equipment used for business, including technology, office supplies, or any tools required to make your product or perform your service
● Supplies and Inventory, including costs of inventory you sell or raw materials used to create your product
Every business is different, so there’s a good chance you’ll have additional deductible expenses that aren’t listed here. Consult with a knowledgeable bookkeeper or accountant to ask about deductible expenses that may be specific to your business.
7. Deduct shared personal and business expenses by percentage used
In addition to these basic business expenses, most side-hustlers also incur expenses that live in a gray area between business and personal.
For example, have you purchased a personal computer that you also use for your business? Do you use your cell phone for business calls? What about your home internet, or even your car?
Applying the full cost of these expenses as a deduction for your side hustle would likely raise some red flags with the IRS. However, you can deduct a portion of the expenses according to the amount or frequency of their use for your business. For example, if a third of your time spent on the internet is doing work for your side hustle, you can qualify a third of your monthly internet bill as a deductible expense. As long as you’re willing and able to show justification for these calculations in the event of a tax audit, you can apply the same percentage calculation to any mixed-use expense.
8. When in doubt, work with a professional
Between keeping track of the correct IRS forms for each of your income streams, saving for and paying estimated taxes, and doing the math on percentages for your business and mixed-use expenses, navigating the tax code as a side hustler is downright complicated. If you’re at all in doubt about how to proceed, your best bet is to work with a professional accountant or tax lawyer.
Remember, the cost of hiring an accountant qualifies as a deductible business expense—and in most cases, a capable CPA can save you enough money on taxes to more than make up for their fee.
There’s no denying that dealing with taxes is one of the most stressful aspects of owning a small business. But with these tax tips in hand, you have everything you need to cross this year’s tax season off your to-do list and move right along with your business goals.
Fundera is a marketplace for small business financial solutions. We provide business owners with expert insights and tailored options–from loans to credit cards to bank accounts–so they can shop, compare and make the smartest financial choices for their business.
You’ve signed a lease with your new tenant. You can breathe a sigh of relief! You’ll have monthly cash flow coming in. But you may be all too familiar with the horror stories. The tenant that started out great but became a nightmare.
The landlord-tenant relationship has a strained reputation. Believe it or not, it doesn’t have to be that way. Tenants and landlords can have excellent business relationships for years.
How? You might ask. By avoiding disputes.
Set clear expectations upfront
You need to establish clear expectations on the front end. A rock-solid lease is the best tool for the job. If something does happen, it tells the court that you both agreed to the terms in writing.
But all that legal jargon can make a person’s head spin. It’s important to go over the lease with your new tenant. This way you can answer any questions they have before you both sign the lease.
Want to take this a step further? Create a handbook for your tenant. It should include important information using language that is easy to understand.
Answers to frequently asked questions.
Where to pay rent and what forms of payment you accept.
How to submit a maintenance request.
Landlord’s hours of operation and contact information.
If applicable, community amenity rules.
Requirements of the tenant like changing the air filter.
Making a handbook does not automatically protect you from every dispute. Sometimes, despite your best efforts, conflicts happen.
But it can prevent an avoidable misunderstanding from bubbling to the surface.
That will get you on the ball fast. Frankly, it should never get to that point though. As the landlord, you must keep the unit habitable. This includes working plumbing, electricity, heat and other items determined by the state.
Be diligent with all maintenance requests. Even the ones that aren’t emergencies. This doesn’t mean you have to drop everything for a minor repair. But you do need to connect with your tenant. Let them know when you’ll take care of the problem.
Don’t show up unannounced
It’s your house, so you can go in when you want right? Wrong! When you have a tenant in your rental, there are laws protecting their privacy. Laws and lease agreements vary, but you are generally required to give your tenants between 12 to 48 hours’ notice before entering the home.
Keep yourself out of hot water by sending this notice in writing. This will help you avoid a potential disagreement down the line.
Some tenants want to be home when you show up. That’s understandable. On the maintenance request, make sure they state whether you may enter if they are not home. Most tenants understand that the repair must be scheduled further out if they want to be there.
Screen your tenants
You can avoid a disaster before you are close to the lease stage. A detailed screening process is how it’s done.
You must follow federal and state fair housing laws. There are some things you can’t ‘screen’ for. Otherwise, you risk a discrimination lawsuit. Examples include:
You can still have high standards for your tenants though. The key is consistency. Screen every prospect with the same qualifications. Here are a few key ways to ensure that your tenant is screened thoroughly:
Have a minimum credit score you will accept. Be sure to look for evictions and bankruptcies on the credit report, too.
Criminals are not a protected class. You are not obligated to rent to violent felons or repeat offenders.
Does the person have enough monthly income to cover rent? Rent should not exceed around 30% of the monthly income.
Are they currently employed? How long have they been there? You don’t want a tenant who may not have a job next week.
Landlord reference check
Evictions should show up on the credit report. But, if the tenant owes money for damages, or repeatedly violated the lease, you will want to know.
Only renting to tenants that meet your qualifications is one of the best ways to avoid a dispute. If they were a headache for the last landlord, they will likely be a headache for you. No one needs that.
Landlord-tenant disputes are a hassle. Luckily, many are avoidable. Only rent to quality tenants, explain expectations upfront and hold up your end of the deal. It really is that simple.
Avail is creating a community of responsible landlords and trustworthy renters by arming them with the resources required to make renting easy. More than 350,000 tenants and landlords across the United States use Avail to save time and money through simplifying and automating the entire rental process, including listings, tenant screening, leases, payments, and maintenance.
Black Friday and Cyber Monday are great times to shop for sale items (who doesn’t love 30 percent off), but these days largely benefit corporations and large retailers. Small Business Saturday encourages people to shop locally and support their community. So what can you do to support Small Business Saturday and the businesses around you?
What is Small Business Saturday?
Small Business Saturday is a shopping holiday held on the Saturday after Thanksgiving, one of the busiest shopping periods of the year. It’s the counterpart to Black Friday or Cyber Monday, where consumers shop at big retailers and larger stores with mass sales and huge discounts. This campaign encourages consumers to support small and local businesses.
After the huge success of the first Small Business Saturday, it has become an annual shopping event. It’s a chance for small businesses to promote themselves, work with other small businesses and to encourage consumers to ‘shop locally’ and support them. This year Small Business Saturday is on November 24, 2018.
Why is supporting small businesses important?
Small Business Saturday gives independent retailers a platform to compete against large corporations. It provides healthy competition and allows for creativity. Many local businesses specialize in niche products and artisan goods, which are rarely available from large corporate retailers.
Consumers are expected to spend over 700 billion dollars during the 2018 holiday season. This is up nearly five percent from last year.
How does Rocket Lawyer support small businesses?
Many small businesses find it difficult to get the legal help they need because of costly legal fees. Rocket Lawyer wants to change things by making legal services affordable, simple and easily available.
Small businesses need to have robust legal documents in place to protect themselves, and to do business with customers. You can create a variety of legal documents to support your business. Terms and conditions are useful if you want to sell goods or services online. Hire staff to help run your business with an employment contract. Manage employees properly using Rocket Lawyer’s HR documents. Ask a lawyer legal questions about your business and, as a Premium member, get a discount on lawyer fees if you need more help.
How can I support Small Business Saturday?
If you’re a consumer, this can be as simple as shopping locally. Rather than buying your weekly groceries from a large supermarket, think about shopping at your local butcher or fruit and vegetable market.
If you’re a small business yourself, think about how you can provide your goods or services to other businesses. Give tips and advice to new businesses who have just started. It’s important for communities to help each other.
Support and promote awareness of this campaign on social media by using the hashtags #SmallBusinessSaturday, #SmallBizSat, #ShopLocal and #ShopSmall. For more local impact, make sure to include the name of your city along with with the social media tags.
Let us help
The holidays are a wonderful time of year. With Rocket Lawyer, small business owners can focus on driving holiday sales, while we help with the legal. If you are a small business owner looking for more resources, check out our documents and tools for running a business or try our services for free.
When you think about cyber attacks on businesses, the first thing that pops into your head is probably the large-scale breaches in the recent past, like the Target, Yahoo, and Equifax hacks affecting hundreds of millions of people. (Maybe you were one of them!) When massive breaches occur, it makes headlines across the globe.
If you think your business is safe from cyber attacks because you’re “too small to hack,” think again—small businesses are a major target of hackers precisely because of this mentality.
Let’s take a deep dive into the cyber threats your business faces, and how you can protect yourself from them.
Small businesses lack resources for security
According to the 2016 Verizon Data Breach Investigation Report, 51% of all cyber attacks were targeted at small businesses. By 2017, that number had jumped to over 61%. What we’ve been seeing is a clear shift in focus with hackers targeting small businesses over enterprise business.
While enterprise-level businesses can invest millions in security, the majority of small businesses do not have a dedicated IT team, think they are protected by their vendors and, as a result, are ripe targets. Cybercriminals are increasingly using ransomware attacks and the consequences can be devastating to small businesses.
Some basic security measures you should take to protect your business include:
Update all systems and browsers when new updates come out
Require employees to add passcodes to their phones if they use any public wifi networks
Add multi-factor authentication to your access points
Install anti-virus software if you haven’t already
Shred all documents containing sensitive information
The true cost of a data breach
You may be thinking, “I don’t store a lot of customer information, so a breach wouldn’t cost me that much.”
You are legally required to report a breach and notify your customers of every record of theirs that has been compromised, and though it can vary across industries, the average cost per breached record is $141.
And that all adds up. According to UPS Capital, the average cyber breach costs a small business owner between $84,000 – $148,000. Not exactly pennies we’re talking about here.
Even more alarming is the rate at which small businesses go out of business after a breach. Over 60% of small businesses fold within six months of a data breach. When something as simple as an employee opening a phishing email can doom the business you’ve worked so hard to create, the cybersecurity stakes are sky-high.
Security measures only take you so far
Speaking of phishing emails… most businesses don’t realize that their greatest vulnerability is not weak security measures, but their own employees. Numbers vary across studies, but nearly all show that over 50% of data breaches are caused by human error, with the most common being an employee clicking on a compromised link in an email.
As you’re reading this, think back to a time when you clicked on an email from an unknown source. Was it yesterday? This morning? It happens all the time, and sometimes that’s all it takes. Scary, right?
Invest in a backup plan: Cyber liability insurance
“It’s not a matter of if, but when,” is a fear that is becoming more common to small business owners. As small business owners hear about similar companies being hacked, they are adding a layer of protection in the form of insurance.
Cyber liability insurance covers the financial costs of a cyber attack, including the costs of stopping the breach, replacing lost or damaged data, analyzing your systems, identifying and fixing vulnerabilities, adding new security layers, notifying customers, dealing with any PR fallout, and legal fees if you face lawsuits or fines.
Cyber liability insurance is highly customizable, with limits generally starting at $500,000+, with $1M in coverage usually costing $1,000 or less. In a world where over 60% of all attacks are targeted at small businesses, it is a small price to pay to know your business is protected in the case of a breach.
AP Intego removes the pain from securing important business insurance. We harmonize the traditional capabilities of a national insurance broker with ourpassion for technology, making the insurance-buying process easier and more efficient. We promise speed, carrier breadth and depth, and superb customer service, while advising you on the best coverage for your business. Through AP Intego, more than 42,000 small businesses in all 50 states have gained greater peace of mind so they can focus on what matters most, running their business.
Drawing a connection between the words “legal,” “creative” and “marketing,” may be tough, but the fact is, law firms need to use all the tools and technology available to reach potential clients wherever they might be. In spite of what you may believe, legal marketing doesn’t have to be expensive or difficult. Here are 7 creative legal marketing ideas for your law firm:
1. Invest in SEO – SEO will ensure your web content has the sought-after keywords that prospective clients are typing into a search engine, which depend on your area of specialty and location.
2. Provide relevant, newsworthy content – Content marketing demonstrates your expertise and can be done through regular blogs, videos, infographics or articles on topics that may be of interest to your potential clients.
3. Have a social media presence – Social media should keep you better connected with your clients, colleagues and friends. Make sure you are available for questions and referrals that may come through social media.
4. Participate in local events – Many “movers and shakers” in a community are involved in boards and community organizations would treasure an opportunity to have an attorney assisting them.
5. Create short online videos – Create short one to two-minute videos that provide answers to most commonly asked legal questions in your field and build a YouTube Channel.
6. Integrate reviews on your website – Anonymous reviews today have just as much credibility as personal recommendations. You can make client reviews easier to access by putting them directly on your website.
7. Join an online legal services network to bring you more clients – Rocket Lawyer’s On Call Network is free to become a part of and all you need to do is be willing to answer legal questions.
Creating new marketing opportunities for your legal firm need not be difficult or expensive. Get started today and start building your client list tomorrow.
Visme is an online, do-it-yourself platform that allows anyone to translate boring and dense information into captivating and easy-to-understand visual content in the form of interactive presentations, infographics, visual reports, digital ads, and social media graphics. Users can easily share and present their content online, embed it on their websites or download it for offline use.
Based in Rockville, Maryland, Visme is trusted by over 1.3 million users from more than 100 countries worldwide, from Fortune 500 companies to individual users, including educators, business executives, marketers and entrepreneurs.
While your biggest risk for identity fraud is being caught up in a data breach that exposes consumer information, you’re also at risk when shopping online. That’s important to remember, since e-commerce fraud has increased significantly in recent years, jumping 30 percent from 2016 to 2017 alone. In all, combined phone and online shopping fraud is expected to cost consumers nearly $20 billion per year by 2022.
Fortunately, protecting yourself from identity theft when shopping online is straightforward, as long as you follow these key steps:
Only buy from reputable companies
Online data thieves can set up a convincing storefront and start processing payments within minutes, so you should never trust that “hot new brand” that you know nothing about. Instead, only shop from reputable companies that have an established business history. While you can’t guarantee they won’t suffer a data breach, at least you’ll know that they’re not data thieves themselves. In addition, watch out for fake sites that mimic popular sites.
Always check website security
These days, every business website should be fully secured, period. That means every URL should start with “https://” instead of a simple “http://” prefix. Additionally, you should always check to make sure your web browser has marked the website as secure. In most cases this means you’ll see a green button or padlock icon near the address bar.
To be sure, click on that icon to observe the site’s security information and make sure its certificates are up to date. Most modern browsers will proactively alert you if any of these details seem questionable, but it never hurts to check yourself.
Don’t shop on public networks
Public Wi-Fi is one of the most common ways for hackers to find targets, and data thieves can even set up phony networks or redirect legitimate traffic from open networks to their own servers. That means a public Wi-Fi network is never safe—even when protected—because you’ll have no way of knowing whether a data thief is “spoofing” the connection protocols to steal data or monitor your activity.
Entering or transmitting your payment information in that scenario would be handing it directly to the thief, so stay safe and only shop when you’re at home or on a secured network at your workplace.
Use credit, preferably disposable or virtual
If a thief gets your debit or checking account numbers, they might have cleaned the entire account out by the time you realize something’s wrong. While you’ll eventually get that money back, it can take a long time and is often more complicated than disputing a credit card transaction.
Additionally, credit cards usually have stronger fraud protections than debit or checking, and most major issuers have aggressive fraud monitoring that will alert you when a suspicious transaction has occurred.
For the ultimate protection, only shop with disposable prepaid credit cards or virtual card numbers. A virtual number is usually a single-use payment number that automatically deactivates once you’ve made your purchase. Many major banks will generate a virtual number for you for free, or you can use a third-party service.
Don’t store private information
Though it’s convenient to let your phone or computer automatically remember your login and payment information, you should resist the temptation. In the event your device is hacked or lost, thieves will immediately have complete access to your financial life, and would even have the additional information from personal emails and other data that they would need to answer security questions and bypass other screening measures.
With smart network usage and good payment practices, you can keep yourself reasonably safe from identity theft when shopping online. If you still have questions about shopping safely online you can ask a lawyer today.
In many cases, no. A wide range of employee work-related expenses are no longer deductible starting in the 2018 tax year. In fact, many tax filers may not itemize deductions at all since the standard individual deduction has been increased to $12,000. While preparing your taxes may be simpler, some individuals may lose deductions they have claimed in the past such as work-related travel expenses. In many situations, the company can still claim travel as a business expense, but the employee cannot. This change in the tax law is expected to last until 2026.
Deducting business travel expenses prior to 2018
In the past, employees often deducted miscellaneous work-related travel expenses if the total exceeded two percent of their adjusted gross income (AGI). Expenses included unreimbursed travel and mileage.
Deducting travel expenses for 2018
For the most part, you will not be able to deduct unreimbursed travel expenses. Businesses can still deduct travel expenses. Self-employed individuals can also still deduct travel expenses. You will also not be able to deduct moving expenses, and if your company pays for you to relocate, you’ll need to claim reimbursed moving costs as taxable income.
Can I deduct commute costs in 2018?
Again, no. You may be able to claim some expenses if you need to travel to a temporary work location for a limited amount of time. You may also be able to deduct expenses related to traveling between multiple job sites. If you qualify for this deduction, you need to include the latest version of Form 2106 with your return.
Other tax deductions going away in 2018
When filing for the 2018 tax year, you will no longer be able to deduct:
Tax preparation fees
Unrestricted home equity loan interest
Casualty and theft losses (except in disaster areas)
Employers will no longer be able to deduct parking and transit costs
Job expenses such as license and regulatory fees
Employees will not be able to deduct expenses such as tools, scrubs or classroom supplies (over $250)
Home office costs
Work-related legal fees
Medical examinations required by an employer
Alimony if divorced after December 31, 2018
What can I do to improve my tax situation?
Many tax professionals are suggesting that you consider one of three options. Whether these strategies will work for you depends on your situation, but they are worth considering.
Talk to your employer about the company absorbing some of your costs that the company can then claim as a legitimate expense. Or ask them for a raise to cover your out-of-pocket costs.
Consider becoming a freelance or independent contractor so you can claim the expenses yourself.
Start your own business.
Since many of the new tax law changes favor businesses, now may be a good time to form your own company if you have any aspirations to do so. If you have a good business idea, we can help you start a business.
As futuristic as it sounds, data breaches are becoming more common. If it has not happened to you get, it may soon. According to a 2018 Identity Fraud Study done by Javelin Strategy & Research, 16.7 million Americans were victimized by identity theft last year. Online shopping presents the greatest opportunity for an identity to be stolen.
Once a thief has your personal information, they may be capable of draining your bank accounts, opening up new credit cards, or using your health insurance. We have put together a list of the seven most common indicators your personal information has been compromised.
1. Unfamiliar charges appear on your bank statements. If you find charges on your account for services or goods that you did not purchase you should contact your financial institution. They should be able to make sure that no new charges occur and that you are reimbursed for fraudulent charges. It’s always a good idea to monitor your financial reports regularly so you can recognize any fraudulent activity as soon as it starts.
2. Statements from unknown credit card accounts. If new credit accounts are appearing on your credit report or you are receiving statements for cards that you did not apply for, you should reach out to the credit issuer immediately. They will be able to help you with next steps to stop from continuing. Just like your bank accounts, you should be monitoring your credit reports regularly to identify fraud issues as soon as possible.
3. Medical providers bill you for services you didn’t receive. If you receive a bill for a medical visit that you didn’t have, you should request a copy of your medical records from your insurance company and file a police report.
4. A health plan won’t cover you because your medical records show a condition you don’t have.Federal law provides you the right to review your medical records. You can check them for errors and contact the doctor or hospital that the visit took place at. You may have to send documentation to the medical provider proving that you were not the person who was actually being treated for that condition.
5. Collection for debt you don’t owe. If you start getting calls from a debt collector for a debt that you had no idea about. You should request documentation. If the debt is not yours, you will need to send them documentation supporting your claim as well as proof of identity theft.
6. You get a notice that your information was compromised by a data breach. Most large companies are required to notify its customers if a data breach has occured. Follow their instructions and change your passwords if needed. If they offer free credit monitoring services, you may choose to take advantage of the offer.
7. Your e-filed tax return is rejected. If you get a letter from the IRS saying the wage amount associated with your employment information doesn’t match the amount you filed on your tax return, it could be something minor such as entering a number wrong. You should double check and make sure that everything is correct and to be aware if someone else is trying to file as you. You are still able to file your taxes if you believe you are a victim of identity theft, you will just need to do it by mail instead.