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Tax filers should collect the following documents for a tax preparation appointment: Social Security cards for all family membersDriver license or non-drivers ID (spouses filing jointly must both be present)Last year’s federal and state tax returnsW-2 forms1099s for interest, dividends, retirement, Social Security, unemployment or self-employment1095 for health insurance coverageLetters or documents from the IRSChildcare receipts – name, address, tax ID# and amount paidTuition expens

In today's complex tax environment, proactive tax planning should be part of your company's overall business and financial strategy. As tax reform continues to create sweeping tax changes, let Clarity Capital's business tax consultants advise you on how to reduce and manage your tax obligations. We work closely with you to create a strategic tax plan that can support your business goals and create opportunities for reinvestment that can be used to drive growth, increase profitability

Trust funds were once associated with high net worth individuals as a way to pass money to their heirs or charitable organizations. But trusts are fast becoming a popular tool for everyone, wealthy or not, as a solution in their estate planning. What is a trust fund? Trust funds are legal arrangements that allow individuals to place assets in a special account to benefit another person or entity. Trust funds can be complex and often require the assistance of an attorney to set up, though there

The core Consumer Price Index (CPI), which excludes food and energy, rose to a multi-decade high in September, disappointing both investors and policy makers. The CPI is one, but not the only metric for inflation.September headline inflation eased slightly to 8.2% year-over year from 8.3% in August. Energy commodity prices outright declined for the last three months, offsetting the accelerating price increases in other areas such as food and rent. Core inflation, which excludes food and energy,

The Federal Reserve has signaled that lower interest rates could be coming in the future, this has some Americans wondering if they should make changes to where their savings accounts are stored.

Tuesday (September 13th) turned out to be a very bad day for global stocks, as a hotter than expected US inflation report spooked market participants. The CPI report pushed back on some of the peak inflation narratives and all but confirmed that the Federal Reserve (Fed) will hike rates at least 75 basis points at their September Federal Open Market Committee (FOMC) meeting next week (September 20-21).“To say the market reacted badly to the inflation report would be an understatement&rdquo

It’s hard not to call what we’re experiencing stagflation at this point, if there are any holdouts left. With growth flat for the first half of the year, growth expectations for the rest of the year muted, inflation continuing to run very hot, and the Federal Reserve (Fed) aggressively raising rates, we clearly have the combination of economic weakness with high inflation that gave “stagflation” its name.But this is not your 1970s style stagflation and the ultimate conseq

A Bit More Pessimistic, A Lot More RealisticThe Federal Open Market Committee (FOMC) increased the target rate by 75 basis points (bp) to a 3.25% upper bound and delivered a more pessimistic outlook in their published Summary of Economic Projections.The Committee hiked rates at this magnitude for the third consecutive time and Federal Reserve (Fed) Chairman Powell signaled “ongoing increases…will be appropriate.” So at this point, we expect a 50 bp hike at the next meetin

U.S. and International EquitiesMarkets Finish LowerMarkets worldwide were down sharply this week with the S&P 500 Index finishing over 3% lower for the fourth week in the past five. Investors are worried that given Q3 earnings warnings and other signs of a slowing economy, the Federal Reserve (Fed) will steer the economy into a hard landing as they attempt to curb present price pressures.Moreover, many market participants believe that Q3 estimates, which have been slashed over 6% from the en

Retirement can be difficult to navigate—planning when to retire and making sure you’ll have enough money are just the tip of the iceberg. Meet key deadlines and avoid penalties to maximize your retirement benefits. Here are important milestones to add to your plan: Age 50—Employees, age 50 and older, can defer paying income taxes with catch-up contributions to their 401(k), up to $27,000. That’s $6,500 more than younger employees. IRA-holders can defer taxes on

Contributing to a Roth IRA is a great way to receive tax benefits for retirement savers. If you already do or are planning to take advantage of this tax savings vehicle, it is important to familiarize yourself with the rules that govern these accounts. The IRS has put in place strict limits regarding the amount that individuals can contribute to their Roth IRAs, as well as income limits for determining who qualifies. If you are a single tax filer, you must have Modified Adjusted Growth Inco

Many investors are looking toMany investors are looking to build a portfolio that reflects their socially responsible values while giving them the potential for solid returns. That’s where SRI Investing, Impact Investing, and ESG Investing may play a role.In the past, some investors regarded these investment strategies as too restrictive. But over time, improved evaluative data and competitive returns made these strategies more mainstream. Even though SRI, ESG investing, and Impact Investi

Why sell shares when you can gift them? If you have appreciated stocks in your portfolio, you might want to consider donating those shares to charity rather than selling them.Donating appreciated securities to a tax-qualified charity may allow you to manage your taxes and benefit the charity. If you have held the stock for more than a year, you may be able to deduct from your taxes the fair market value of the stock in the year that you donate. If the charity is tax-exempt, it may not face capit

As the summer break from school approaches, many students are looking for part-time summer employment. Both parents and students should be aware of the tax issues that need to be considered when working a summer job. Here is a rundown of some of the more common issues.

Article Highlights:  Americans Living and Working AbroadExtension RequestsReport of Foreign Bank and Financial Accounts (FBAR)Statement of Foreign Financial AssetsEstimated Tax PaymentsEstimated Safe Harbors June 15 is the due date both for Americans living and working outside the U.S. to file their 2021 federal income tax returns and for the second estimated tax payment for 2022. Here are some important details for both.  Americans Living and Working Abroad - U.S. citizens and res

More and more employers are offering 401(k) plans as an employee benefit, and if you have the option and are not currently taking advantage of it, it may be time to rethink your savings strategy.

With certain exceptions, the statute for assessing additional tax is 3 years from the return due date or the date the return was filed, whichever is later.

Where are plenty of advantages to being your own boss, but that doesn’t mean that every decision is easy or straightforward. One of the first things you’ll have to decide is the type of business structure that is best for your situation. While selecting “sole proprietor” may seem like the path of least resistance, if you have personal assets at risk for your business’ debts and liabilities, it may make more sense to go with the more complicated route of electing to

Article Highlights:  When to seek professional assistanceExamples of times where tax saving moves can be made Waiting for your regular appointment to discuss current tax-related issues can create problems or cause you to miss out on beneficial options that need to be timely exercised before year-end. Generally, you should call this office any time you have a substantial change in taxable income or deductions. By doing so, we can advise you about how to optimize your tax liability, avoid o

If you’re a business owner who has been through a recession before, you know that smart cash flow management is absolutely crucial. If you’re a new entrepreneur who hasn’t been through an economic downturn, you may be less familiar with how quickly your finances can be affected.  To protect yourself and keep your business operating, here are the things you need to know about adjusting your cash flow process to match the economic environment. Evaluate Your Expenses &nb

Avoid mixing business expenses with personal expenses. Log expenses and payments every single day. If you can’t handle your accounting tasks, get help.

Should we be surprised at inflation surprises at this point? The Consumer Price Index (CPI), the most well known measure of inflation, climbed 7.5% over the last year through January, its highest reading since 1982, according to data released this morning by the Labor Department.

As COVID-19 cases in the United States linked to the Omicron variant have fallen dramatically during the past month we look once more to high-frequency data for signals on how quickly the economy is reopening and what this could mean for the inflation outlook.

One of the most popular questions we've received lately is what could happen in the upcoming midterm election? Although we are a long way away from Election Day, it is important to note that a new president has historically lost about 30 House seats in the midterm election.

Both stocks and bonds have faltered to start the year, with the S&P 500 down approximately 8% year to date and the Bloomberg Aggregate Bond Index down about 4%. However, this tough environment for traditional asset classes has given gold, an asset many investors have forgotten about over the past decade, some time to shine.

The municipal market was a relative bright spot within the fixed income markets last year despite higher U.S. Treasury yields. Strong investor demand and fewer investment opportunities (due to less debt issuance) provided a tailwind to muni returns.

A common question among parents is, “How might I save for a child’s post-secondary education in a tax beneficial way?” The answer depends on how much the education is expected to cost and how much time is left until the child heads off to college or a university or enters an apprenticeship program.

Congress considers our tax system a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement.

“Bulls make money, bears make money, and pigs get slaughtered.” Old Wall Street saying. The Chinese New Year (often called the Lunar New Year) kicked off on Tuesday, February 1, and with it will begin the Year of the Tiger. Although we would never suggest investing based on the zodiac signs (and there is no talk of Tigers in the quote above) —it is important to note that the Year of the Tiger has historically been quite strong for equities. Again, we’d never suggest to invest on zodiac signs, b

The Federal Reserve (Fed) has made a decidedly hawkish pivot, with fed funds futures now expecting five rate hikes in 2022. For our full breakdown of the latest Fed meeting, please read our January 27 blog, Federal Reserve Meeting Recap: March is Officially Live. However, today we want to take a look at other years that had a lot of rate hikes. “Five rates hikes in 2022 sounds pretty scary to a lot of investors who haven’t lived through a period of hiking,” explained LPL Financial Chief Market

Equities lost ground in January after a strong 2021. Increased COVID-19 cases, inflation concerns, and the Federal Reserve’s (Fed) recent hawkish sentiment were major themes in investor’s minds. Moreover, disappointing outlooks from some widely followed tech companies amid relatively high growth equity valuations put downward pressure on stock prices. Developed international market (MSCI EAFE) and emerging market (MSCI EM) stocks also pulled back in January. High COVID-19 variant cases worldwid

With the recent hawkish pivot by the Federal Reserve (Fed) indicating a now quicker removal of monetary accommodation, U.S. Treasury yields have moved higher to start the year. Over the past few months, the Fed has indicated it will end its bond buying program in March, start its interest rate hiking campaign (likely starting in March with five hikes expected currently), and potentially reduce its nearly $9 trillion balance sheet (likely starting in July). The sudden shift in expectations has ca

On Friday, January 21, the S&P 500 Index closed below its 200-day moving average for the first time since June 2020 and by mid-day on Monday was 10% below its all-time highs, one of the fastest 10% declines from the start of a year on record. “Big market swings tend to signal more market volatility ahead,” explained LPL Financial Asset Allocation Strategist Barry Gilbert. “But after these kinds of pullbacks there’s an increased likelihood of above-average returns over the next three and six mont

Like other core fixed income sectors, investment grade corporate credit has had a tough start to the year. After losing 1.0% last year, investment grade corporate debt is off another 2.4% (through January 14) in 2022. However, the paper losses this year (and last year frankly) are not due to declining credit fundamentals or deteriorating credit conditions. To take advantage of low interest rates, shore up balance sheets and extend maturities, corporate CFOs have issued record amounts of debt ove

The S&P 500 closed at a record high in December, technology, which as we noted last month, has been showing consistent relative strength since May and was boosted by a more than 10% gain from Apple for the week. However, the other sector to do so may surprise people: consumer staples.

As we head into the end of 2021, here are five charts that caught our attention. First up, last week was one of the best weeks of the year for stocks, and that could be a good sign. “It turns out that big weeks like last week usually have the bulls smiling,” explained LPL Financial Chief Market Strategist Ryan Detrick. “23 out of the past 25 times the S&P 500 Index gained at least 3.8% in a week, it was higher three months later.”

The changes in the 2017 Tax Cuts and Jobs Act (TCJA) included nearly doubling the standard deduction and placing limitations on or suspending certain itemized deductions, effective for tax years 2018 through 2025.

Most taxpayers don’t intentionally incur tax penalties, but many who are penalized are simply unaware of the penalties or the possible damage they can do to their wallets. As tax season approaches, let’s look at some of the more commonly encountered penalties and how they may be avoided.

Federal Reserve Officials are planning to keep loan interest rates historically low and near zero through at least 2023. This is a tactic to hopefully help the rest of the economy back to full strength after the recession caused by the pandemic brought things to slump. All of this was communicated in their September policy statement and economic projections released in the first week of September.

Now that we are over twenty years past when the Four Percent Rule was written, financial experts have recognized that this simple go-to rule needs some tweaking to continue to help retirees live comfortably in the new decade and decades to come.

When you get down to the logistics of actually passing on the property to your children, it needs to be looked at as a business transaction, putting warm feelings aside. There are several legal factors that go into passing your home on to your children, including tax requirements.

It is not only the medical world that sees the ties between health and wealth. Many financial planners see the relations as well. A better quality of health in later years can drastically reduce the financial impact of health care bills.

Most Americans between the ages of 40 and 60 have less than $100,000 set aside for their golden years. With the right knowledge and planning, you can set yourself up for a comfortable retirement. Here are some good things to know when it comes to retirement planning.

We are pleased to announce that we have completed a merger with Multop Financial and Clarity Tax Management PS. We are excited about the opportunity to work with their team of professional Tax Specialists, Certified Public Accountants, Business Advisors, and Financial Planners.

Most adult Americans know or refer to April 15 th as tax day. We can help you to file your 2021 taxes in Kent , Vancouver, and Bellingham Washington. If you have any questions about our services or need some tax advice and/or help please contact us any time.

A pension plan is a form of retirement plan offered to employees by an employer. This type of plan pays the employee a previously set income at the time the employee retires. Pension plans are less and less common as more employers have switched to offering 401(k) plans.

President Biden presented his proposed American Families Plan (AFP) during his Joint Session of Congress address on April 29, 2021. There are also proposed tax increases to pay for the benefits.

Providing your employees with paid time off to get their vaccine will now be covered by the government, so you can encourage vaccinations if you choose without taking on the cost of offering additional PTO. If your small business is still struggling financially and you need additional funding, the EIDL expansion could help.

There are two basic types of employee stock options for tax purposes, a non-statutory option and a statutory option (also referred to as the incentive stock option), and their tax treatment is significantly different.

The saver’s credit, also called the retirement savings credit, helps offset part of the first $2,000 workers voluntarily contribute to traditional or Roth individual retirement arrangements (IRAs), SIMPLE IRAs, SEPs, 401(k) plans, 403(b) plans for employees of public schools and certain tax-exempt organizations, 457 plans for state or local government employees, and the Thrift Savings Plan for federal employees. The saver’s credit is available in addition to any other tax savings that apply as a

There are several different types of income streams, all of which fall into the category of either active or passive. If you are making something, selling something, or providing a service of some kind in exchange for direct payment, that is active income. While passive income also generates revenue, the payment is not as connected to the original work.

Like everything else in life, relocating to another state and making it your primary residence is not as easy as just deciding to do it. It is important that you do your due diligence to make sure that you have complied with everything required of your new home.

IRS notices often include errors. However, you do need to respond before the deadline specified on the notice (usually 30 days) or else face significant repercussions. The notice may even be related to suspected ID theft. The first step is to determine which type of notice you have received.

The U.S. Treasury has released the Biden administration’s 2022 Fiscal Year Budget, which includes a general explanation of the administration’s 2022 revenue proposals. The publication is commonly referred to as the Green Book and outlines the Biden administration’s tax proposals.

Creating a successful business requires a good idea combined with skill, talent, and ambition. But even if you have all of those elements, you may end up falling short if you can’t raise the capital that you need to move forward.

As part of its COVID relief efforts Congress is allowing businesses to deduct 100% of business meals during 2021 and 2022, provided the meals are provided by a restaurant. Business meals are deductible up to an amount not considered “lavish”.

The general tax rule for debt forgiveness states that the amount of debt forgiven is subject to federal income tax. PPP loan forgiveness is an exception, although from an overall tax perspective it didn’t start out exactly that way.

The rules for getting a loan forgiven are complex and continue to evolve, even though the extended deadline for applying for a PPP loan has passed. In fact, the Small Business Administration issued a new Interim Final Rule on July 28, 2021 that streamlines the forgiveness process for loans of $150 ,000 or less. And the application form for first-draw loans was updated nine times.

Some people are noticing a little more money in their bank account than normal this July. With some recent changes to the law governing the child tax credit, taxpayers may find themselves thinking more about taxes than just the one time a year. If you typically receive the child tax credit once a year when your return is filed, that may just be why you suddenly have more cash.

The accounting cycle is a widely used 8-step process for completing bookkeeping tasks on a business level. It is a clear launching point for recording, analyzing, and final reporting of financial activities for a business.

In the new year tax-savvy individuals need to take some time from their busy schedules to review the tax benefit steps they’ve already taken and see what else they need to do. Now is the time to ensure that you’ve taken advantage of all of the tax-saving strategies available to you.

On October 19, 2021, in the face of widespread opposition, the Biden administration has backed down and is now proposing raising the reporting threshold to $10,000 in annual transactions while exempting income from which federal taxes are automatically deducted, as well as federal benefits like unemployment and Social Security.

There’s an old saying that there is no exception to the rule that every rule has an exception. Think about it. The general tax rule for debt forgiveness states that the amount of debt forgiven is subject to federal income tax. PPP loan forgiveness is an exception, although from an overall tax perspective it didn’t start out exactly that way.