PMTG-Finance

World Finance

Author: Tiffany Clarkson

The Most Underutilized Tax Deductions

When you think about April, you undoubtedly think about tax season. The cringing of whether you get a refund or have to pay out your hard-earned money can wreak havoc on your well-being. To ensure you always get the most back, you should verify that you’re personally taking advantage of these underutilized tax deductions.

One of the most underutilized tax deductions is charitable contributions. Many individuals who donate regularly remember to do this deduction for larger sums. However, those who donate sporadically tend to forget to sum up their tax-deductible amount. Things like stamps, food ingredients, and transportation gas are all deductible. Think about all the things you’ve done for nonprofit organizations, such as school fundraisers. All of the little things you do throughout the year should be tracked so that you can sum up your total charitable contribution come tax time.

Student loans seem to get more and more expensive. Getting back some of that money is a definite benefit. However, in the past, getting back the interest paid on student loans was more difficult to do. Originally, the student had to be the one paying back the loan in order to get the deduction. Now, students who are liable for the loan can deduct the interest their parent’s pay on their student loans as long as they’re filing as an independent on their own tax returns. You can thank mom and dad for this tax deduction.

Child care is something that is becoming more widely used as both parents tend to work during the day. While many businesses will offer a reimbursement credit for their employees for the costs they incur for child care, it doesn’t always cover the actual costs of having it. Many businesses will run up to a $5,000 tax-favored reimbursement account for their employees. Anything over that limit was not able to be deducted from a person’s taxes in the past because there was a $4,800 limit set by the Government. Now, that limit has risen to $6,000. This means that any child care expenses you incur over the $5,000 reimbursement from work, you can deduct up to another $1,000 on your taxes.

The last type of underutilized tax deduction is refinancing mortgage points. While this one won’t bring hundreds of dollars to your tax refund check, it only takes a few minutes to get some extra dough. When you refinance the mortgage for your home, you can deduct the points on your tax returns. This is done by calculating your points over the term of the loan, say 30 years. For every $1,000 you paid in points to refinance you can claim up to $33 on your tax returns for a 30-year mortgage. In order to ensure you get this tax formula right, we encourage you to utilize a software, such as the one found at https://www.groupon.com/coupons/stores/turbotax.intuit.com to complete your tax returns.

As you can see, there are some tax deductions out there which may be eligible for you to receive more … READ MORE ...

Indications It’s Time to Hire a Compensation Consultant

If you are struggling with compensation issues with your business, it’s likely you’re thinking about bringing in an outside firm. This can be extremely helpful for businesses who are ready to undergo this type of restructure. There are some key indications that you should look for to verify that your business is ready to make that call to an outside compensation consultant.

If you’re dealing with a lot of overwhelm due to a lack of real structure in your business, it’s time to think about a compensation consultant. These experts can come in and assist in formulating an organized structure that combines all of your compensation plans together. Specific pay plans can be confusing when you don’t understand how they interact with other compensation factors you have set up in your business. With one overarching compensation structure, you can see the big picture of how your plans and compensation factors combine together. This will allow you to better understand what your financial commitment is and how it gets dispersed throughout various departments.

Understanding the right salary grades to offer your employees that is competitive with other businesses in your industry is a must. Unfortunately, most firms don’t go beyond simply seeking out what specific pay amounts are being offered by their competitors. This is only one step of the process of determining your own salary pay grades. Other considerations include comparing data with internal equity, analyzing compatible compensation with your business philosophy, and many more. A compensation consulting firm will be able to take the necessary time to collect relevant industry data and do an in-company analysis to ensure your salary pay grades are right for your business.

In order to offer incentives to your employees, whether on a quarterly or annual basis, you need to have metrics. These metrics are minimum standards your employees must meet in order to achieve these incentives. In most businesses, these metrics are either too discretionary or include too many factors that cause confusion among employees. In both of these scenarios, employees become confused at what they need to do and management personnel doing the evaluations do so based on their own agenda. A compensation consultant can help to even the playing field and make metrics that are clear to your employees and management.

Having a good plan to attach your compensation structure is only one part of a successful equation. The second part is implementation and many businesses tend to let this part lag, leading to disgruntled employees and confused managers. Consultants can help to ensure that the ongoing statutory, communication, administrative, and financial sectors all get taken care of on a regular basis. These areas of your compensation plan ensure that it stays working well into the future when they are executed correctly. Your consultants will periodically ensure the program is running effectively and help to showcase where issues are arriving so you can deal with them before they ruin the compensation plan.

As you can see, there are many indicators that … READ MORE ...

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