11 Smart Ways to Use Your Tax Refund

You discover that you are getting a refund. CONGRATULTIONS! What are you going to do with it? A refund is a prime opportunity to set yourself in a better position for the future. Here are a dozen ways to make sure your money continues to work hard for you:

  1. Create an emergency fund: In the event of a sudden financial need, it is important to have some money stashed away. Not having savings leaves you in a bad spot in the event of a job loss, a medical emergency, major house or car repair. If you don’t have savings for any one of these life events, it could force you to resort to loans with high interest rates or credit cards for an extended period of time.
  2. Put it into savings: The IRs allows you to split your refund in up to three accounts through direct deposit. Placing some of the refund in an account that is out of mind and out of sight until you really need it can really come in handy. Make sure to resist using this money for impulse buys.
  3. Pay off debt: Paying off any credit card balances will help to keep more money in the bank every month. Continued credit card debit yields interest rates that add up.
  4. Fund your retirement: Putting money away for retirement that really are not a part of your paycheck is a smart move. You can use the refund to start or add to a Roth or traditional IRA.
  5. Look to the future: Have any children? You can help fund their IRA and encourage them to contribute any earned income into an IRA.
  6. College Fund: You will be doing your kids or grandkids a big favor by placing your savings into a college fund for their education. Setting up a 529 plan can help them afford a higher education in a time when rising costs are leaving people with massive debts.
  7. Invest in the stock market: while fluctuations make this option risky, the long-term gain could be the best option if you don’t have any immediate financial needs. Pick individual stocks or select an index fund that moves up and down along with the market.
  8. Kickstart your career: Take your career to the next level and invest in your professional development. Put some of your refund into courses and classes that give you a competitive edge at your place of work. By taking advantage of the Lifetime Learning credit, you may be able to use the costs of the course to take money off your taxes again next year.
  9. Prepay your mortgage: making extra payments on your mortgage can be a great way to save money in the long run. By reducing the principle, it can have an exponential effect over the life of the loan since so much of your payment on a long-term note foes to pay off the interest.
  10. Start a business: You don’t have to quit your current job to start a business. Your tax refund can seed the investment to building up inventory, designing a website or online store and turn your hobby into a money-making enterprise.
  11. Make home improvements: If you own an older house, putting your refund towards updates can help lower your energy bills. Replacing old windows or old appliances can reduce electric bills and use less energy. Updating a kitchen or bathroom can also make a house more attractive for when you decide to sell.

Jack McCarty is available to help with your tax problems, but can also help provide financial guidance. Let your tax refund work to benefit you. For any tax questions or tax needs, just call Jack today at 502-327-8009. Tax problems don’t just go away!

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Mistakes to Avoid when Filing your Taxes

We all make mistakes, but here are a few to make sure you avoid when filling out your taxes:

Forgetting to file: Do it by April 17th. If you file late and owe the government money, you will pay the price. The penalty is usually 5% of the unpaid taxes for each month that a return is late. It starts the day after the tax filing due date and won’t go over 25%. You’ll get a separate bill for that.

Spelling of names: Sounds like an obvious one but it happens to a lot of people. You need to make sure the name you’ve written down matches the one on your Social Security card exactly. If you recently got hitched and changed your name, make sure it matches social security administration records.

Social Security Number: This nine-digital number is very important. One wrong number could have the IRS on your case.

Filing status: Your filing status is used to determine your filing requirements and is based on your marital status and family situation. There are five to choose from: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) With Dependent Child. This helps determine your tax rates and potential refund so make sure you get it right.

Math mistakes: For those going the paper tax return route, take your time and be careful with your math. If you’re filing online or getting help from a professional, you get to skip doing the math yourself. But still look over everything to make sure it adds up.

Tax credits and deductions: It can be overwhelming so read the instructions carefully to make sure you are selecting what’s appropriate for you. There are two types of deductions: Standard and Items. You can only choose one, so make sure you see which one cuts you the biggest break.

Bank account numbers: If you want to use direct deposit to get your refund, this is probably a good thing to get right.

Signatures: Don’t forget to add your John Hancock to those paper forms before sending it to the government. If you’re doing everything online, you’ll be asked for a Personal Identification Number.

Beware of scam calls: They happen more often than you think and seem legit. The callers may know a lot of your info and usually make it so that “IRS” pops up on caller ID. Here’s the thing: the IRS will never call you asking for an immediate payment or threatening to have you arrested. Just hang up and call the IRS directly.

For Tax help, Just Call Jack at 502-327-8009!

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Tax codes you may not be aware of

IRC 127: Educational Assistance

Up to $5,250 of Employer paid educational assistance provide to employees in excluded from taxable wages. Graduate level courses are included in this exclusion. Expenses include the cost of books, equipment, fees, supplies and tuition. The exclusion doesn’t apply to the cost of education involving sports, game, hobbies UNLESS the education has a reasonable relationship to the employers’ business or is required as part of the degree program. Excludable expenses do not include tools or supplies that the student/employee is allowed to keep at the end of the course (other than textbooks), nor does it include the cost of lodging, meals or transportation.

IRC 132(b): No-Additional-Cost Services

A service provided to an employee may be excluded from taxable wages if it does not cause the employer to incur any substantial additional costs. The service must be offered to the customers in the ordinary course of the line of business in which the employee performs substantial services.

These types of services are generally excess capacity services, such as airline, bus, or train tickets, hotel rooms, or telephone services provided free or at a reduced price to employees working in those lines of business.

IRC 132 (d): Working Conditions Benefits

The value of property of services provided to employees so that the employee can perform his or her job is excluded from taxable wages. The rule applies to the extent that the employee could have deducted the cost of property or service as a business expense if he or she has paid for it. An example of a working condition fringe benefit is a company car used by the employee for business.

If you have questions on the above tax codes or any other tax questions, please Just Call Jack, today at 502-327-8009.

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Seven steps that couples in their 50s should take

Here are seven smart moves that couples in their 50s can take to prepare for retirement:


  1. Asses what retirement will cost: Mapping out a rough budget and plugging those numbers into a retirement calculator can help determine if you will have enough in savings to support your intended lifestyle.

Click Here for Calculator


  1. Boost savings at age 50: The tax code will allow individuals of 50 years of age and older to contribute an extra $6000 per year to a workplace retirement plan (such as a 401(k) plan). The rules also allow an extra $1000 per year to contribute to a traditional IRA.


  1. Consolidate accounts: Over time, the number of financial accounts a couple has opened may have increased. Combining them to fewer accounts eases the task of financial management and enhances the clarity of how investment dollars are allocated across both spouses’ accounts.


  1. Make your kids financially independent: A recent study in Money Magazine shows a research survey that slightly more 18-34-year-olds are living with their parents. Financially supporting adult children can hinder plans to save for retirement, leading to future financial problems for the parents.


  1. Use vacations to check out retirement locales: Those seeking to move to a different location in retirement should consider using vacations to try out that area first. When doing so, think about what life will be like regarding activates, socializing, and even climate. Plus, realize that spending a week or two in a place is a far different experience than actually living there.


  1. Make significant changes if behind on savings: Those who have not saved enough for retirement can boost savings by downsizing their home. The proceeds from selling the bigger house plus, the lower costs of, the smaller house can be used to increase retirement savings.


  1. Adopt a healthy lifestyle: Exercise and a proper diet can reduce the risk of illness and even reduce high medical bills as you age.


It is never too early or too late to start saving for retirement. Choosing to not plan, is planning to fail. Not sure how to start planning or want to get your taxes in a good place so that you can focus on your retirement plan? Just call Jack for tax help.

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Where is My Money? Tracking your refund 24/7

If you are expecting a refund on your 2017 income tax, and still haven’t received it, you can check on its status if it has been at least four weeks since the date you filed your return by mail, or 24 hours if you filed electronically. You will need to supply the following information:

  • Your social security number or IRS Individual Taxpayer Identification number
  • Your filing status
  • The exact whole- dollar refund amount as it is shown on your return

You can check the status of your refund in two ways:

  1. On the internet: Go to irs.gov and click on “Refunds” and then “Where’s My Refund”.
  2. By Telephone (for automated info), Call 800-829-4477.

If you are unable to get information on your refund through either of these two automated services, you can call the IRS for assistance at 800-829-1040.

The IRS website also allows you to start a trace for lost or missing refund checks, or to notify the IRS of an address change when refund checks go undelivered. Taxpayers can avoid undelivered refund checks by having refunds deposited directly into a personal checking or savings account. This option is available for both paper and electronically filed returns.


For help in tracing or tracking your tax refunds, Just Call Jack, today at 502-327-8009.

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5 Retirement Challenges that Women Face

We all are aware of the gender wage gap, but have you heard of the gender retirement gap?

TIAA states that there are 5 big challenges that stand in the way of securing a safe retirement.

  1. Fewer Working years: Women average about 29 years in the workforce compared to 38 years for men. The difference is due to time taken off for Children and in some cases, care for elderly parents. Thus, a greater percentage of salary must be saved by women during their working years to account for the years when no saving contributions are made.
  2. Lower pay: In 2015, Professional women earned 28% less than professional men. The lower pay restricts the ability to save more. If you find yourself in situations where you can squirrel more away- you should. Saving up to the annual maximum limits of retirement accounts and contributing more money to supplemental vehicles will help offset non-working years when no new contributions to savings are made.
  3. Greater Risk Aversion: Women tend to maintain higher cash allocations and lower stock and mutual fund allocations than men do. These more conservative allocations compound the problems caused by fewer years by reducing the rate at which savings grow.
  4. Longer Lifespans: Women age 65 outlive men of a similar age by 2.5 years. This difference overshadows the fact that on average, husbands are 2.1 years older than their wives. In situations where the wife outlives her husband, social security administration data shows women living an additional 11.5 years following the death of their spouses. During this period, housing costs are not shared and the extra income from a spouse is lost.
  5. Health Care costs are higher: The department of Health and Human Services projects that women will spend $19,558 on health care once the turn 65 v $18,251 for men. If an employer offers a lifetime plan such as an annuity, women should consider it. The unisex life expectancy tables employers are required to use result in women receiving more income per dollar than they would find by purchasing a contract on the open market.


Hope these tips help! As always, Just Call Jack for any questions and tax help you may need.

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Protecting Yourself Against Tax Scams

Don’t be fooled by con artists posing as IRS Agents. They will often initiate contact through a telephone call, claiming that you owe tax penalties or claim back taxes. They will instill fear by demanding immediate payment or threaten with arrest, suspension of driver’s license or (if an immigrant) deportation. Sound Familiar? Has this happened to you or someone you know?

Though sounding very convincing, these calls are scams!

Another scam involves Identity Theft. Once they obtain your social security number, they file false returns (under their victims’ names) to receive refunds. When the victim then tries to file a legitimate return, it can be rejected by the IRS.

Other current tax scams are commonly pitched as opportunities to get a larger refund. They can involve encouraging an individual to falsify income, falsely claim fuel tax credits, use tax shelters that sound too good to be true and hiding income offshore. Some criminals will also pose as a tax preparer just to get your information and engage in Identity theft. It is so important to validate and check into who is helping with your taxes.

Here are some steps you can take to help protect yourself:
• File as quickly as is reasonably possible
• Guard your Identity- Do not carry your Social Security card in your wallet or purse, install antivirus and firewall software on your computer(s). Varying your passwords is smart. If you need password management help, try Lastpass or Dashlane.
• Never click on a link in an email to visit the IRS or bank. Instead, go directly to the secured and known URL
• Regularly check your credit reports to see that the information is accurate. Try Annualcreditreport.com
• If a tax proposal sounds too good to be true, it probably is.
• Do not trust a tax preparer that does not give you your returns to review. You should file your own returns, if possible.
• The IRS will NEVER call to demand immediate payment or about taxes being owed without previously having mailed a bill. The agency will also give you the opportunity to question or appeal any outstanding balance or penalty.

If you suspect you are a victim of identity theft or fraud, act immediately!
• Call your banks, brokerage firms, credit card companies, major credit bureaus and in the specific case of tax fraud- call the IRS.
• If your social security number is compromised, fill out IRS form 14039 and continue to file your taxes as you normally would.

Just Call Jack for any taxes questions, help or advice as you get ready to file taxes for the 2016 year. No situation is too big or too small for us to handle! Call today at 502-327-8009 for your tax needs.

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Jack’s 8 Tax Tips

During this time of the year.. we often experience more jingle going out of our pockets than going in. Below are some tax tips you can use to help replenish some of that jingle back into your pocket in 2017!


You can also listen to these tax tips over the next few weeks on Wacky between 3-6PM.


Just Call Jack Tip #1:


-Get yourself a supercharge tax benefit by donating appreciated stock or property held over one year. You can deduct FMV of the donation and pay no capital gain on its appreciation.


Just Call Jack Tip #2:


-For seasoned individuals over the age of 70 1/2 , who have traditional IRA’s and SEP’s, make sure you take out the required minimum distribution amounts or face a punitive 50% penalty on amount not taken. Check with your trustee for more details


Just Call Jack Tip #3:


-For non-business owners, try to accelerate your deductions from 2017 into 2016 by donating appreciated stock or property to charities, prepaying real estate taxes and paying of state and local taxes before December 31.


Just Call Jack Tip #4:


-If you have a ROTH, IRA, there are no required minimum distribution rules for you to worry about. However, if you inherited a ROTH IRA you are subject to the required minimum distribution rules at age 70 ½.


Just Call Jack Tip #5:


-If you are self-employed, the retirement plan of choice is the Keogh plan. These plans must be established by Dec 31 of each year, but contributions to the plan may still be made until the tax filing deadline. For non-business owners, the traditional IRA may be set up and funded until the tax filing deadline.


Just Call Jack Tip #6:


-Check on your cafeteria or “flex plan” benefit balance at work. Those plans usually have a “use it or lose it” rule. Recently, the IRS has initiated a grace period for some employers to allow their employees to spend 2016 set aside money as late as March 15, 2017. But check this out carefully with your company’s benefit department. Don’t rely on small talk around the water cooler!


Just Call Jack Tip #7:


-If the company you work for has a 401(k) plan, I strongly suggest that you start making a minimal contribution to it at least the amount that will be matched by the employer. This match is a 100% return on the money you contributed and I am aware of no other investment vehicle, a similar risk level, that can yield you such a wonderful Return.


Just Call Jack Tip #8:


-Legal methods deferring income to 2017, such as delaying bonuses, or waiting to send out your invoices until late December are accepted tax strategies. Also, accelerating expenses such as: paying real estate taxes and various business expenses. Expenses can be charged on a credit card and deducted in the year charged, even if the credit card bill is not paid until 2017.


Questions?…. Just Call Jack


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Tips About Debt Cancellation

If your lender cancels part or all of your debt, it is usually considered income and you normally must pay tax on that amount. However, the law allows an exclusion that may apply to homeowners who had their mortgage debt cancelled in 2015. Here are 10 tips about debt cancellation:

  1. Main home. If the cancelled debt was a loan on your main home, you may be able to exclude the cancelled amount from your income. You must have used the loan to buy, build or substantially improve your main home to qualify. Your main home must also secure the mortgage.
  2. Loan Modification. If your lender cancelled part of your mortgage through a loan modification or “workout”, you may be able to exclude that amount from your income. You may also be able to exclude debt discharged as part of the Home Affordable Modification Program, or HAMP. The exclusion may also apply to the amount of debt cancelled in a foreclosure.
  3. Refinanced Mortgage. The exclusion may apply to the amounts cancelled on a refinance mortgage. This applies only if you used proceeds from the refinancing to buy, build, or substantially improve your main home and only up to the amount of the old mortgage principal just before refinancing. Amounts used for other purposes do not qualify.
    Other cancelled Debt. Other types of cancelled debt such as second homes, rental and business property, credit card debt or car loans do not qualify for this special exclusion. On the other hand, there are rules that may allow those types of cancelled debts to be nontaxable.
  4. Form 1099-C. If your lender reduced or cancelled at least $600 of your debt, you should receive Form 1099-C, Cancellation of Debt, by Feb. 1. This form shows the amount of cancelled debt and other information.
    Form 982. If you qualify, report the excluded debt on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. File the form with your federal income tax return.
  5. IRS.gov tool. Use the interactive Tax Assistance tool on IRS.gov to find out if your cancelled mortgage debt is taxable.
    Exclusion Extended. The law that authorized the exclusion of cancelled debt from income was extended through Dec. 31, 2016.
  6. IRS Free File. IRS e-file is the fastest, safest and easiest way to file. You can use IRS Free File to e-file your tax return for free. If you earned $62,000 or less, you can use brand name tax software. The software does the math and completes the right forms for you. If you earned more than $62,000, use Free File Fillable Forms. This option uses electronic versions of IRS paper forms. It is best for people who are doing their own taxes. Free File is available only on IRS.gov/freefile.
  7. More Information. For more on this topic see Publication 4681, Canceled Debts, Foreclosures, Repossessions and abandonments.

For professional tax services, please contact Jack McCarty at www.justcalljack.com or 502-327-8009. This is not a free service. Tax work is tough and should be done by a professional. Don’t risk submitting your taxes incorrectly.

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Name Changes and your Taxes

A name change can have an impact on your taxes. All the names on your tax return must match Social Security Administration records. A name mismatch can delay your refund. Here is what you show know if you changed your name:

Report name changes. Did you get married and are now using your new spouse’s last name or hyphenated your last name? Did you divorce and go back to using your former last name? In either case, you should notify the SSA of your name change. That way, your new name on your IRS records will match up with your SSA records.

Make Dependent’s Name Change. Notify the SSA if your dependent had a name change. For example, this could apply if you adopted a child and the child’s last name changed.

If you adopted a child who does not have a Social Security number, you may use an Adoption Taxpayer Identification Number on your tax return. An ATIN is a temporary number. You can apply for an ATIN by filing FOR W-7A, Application for Taxpayer Identification Number for pending U.S. Adoptions, with the IRS. You can visit IRS.gov to view, download, print or order the form at any time.

Get a new card. File Form SS-5, Application for a Social Security Card, to notify SSA of your name change. You can get the form on SSA.gov or call 800-772-1213 to order it. Your new card will show your new name with the same SSN you had before.

Report Changes in Circumstances when they happen. If you enrolled in health insurance coverage through the Health Insurance Marketplace you may receive the benefit of advance payments of the premium tax credit. These are paid directly to your insurance company to lower your monthly premium. Report changes in circumstances, such as a name change, a new address and a chance in your income or family size to your Marketplace when they happen throughout the year. Reporting the changes will help you avoid getting too much or too little advance payment of the premium tax credit.

Just call Jack at 502-327-8009

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