Arizona's 2020 Unemployment Taxable Wage Base Increases

11-07-2022Tax Information

In 2021, Governor Doug Ducey signed Senate Bill 1828, which increased the maximum taxable wages from $7,000 to $8,000 for Unemployment Insurance (UI) compensation purposes, effective calendar year 2023. This legislation also made other changes to the UI program, including additional program integrity requirements. 

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New Arizona Withholding Form

11-01-2022Tax Information

The Arizona Legislature substantially reduced Arizona's individual income tax rates for the 2022 tax year. The previous Form A-4 withholding rates are no longer representative of the new lower income tax rates. Employers should select the 2.0% default on behalf of the employee.

Employees will still have the option of selecting a higher Arizona withholding rate than their wages might dictate and there is still a line to add an additional amount of Arizona withholding.

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Student Loan Forgiveness Website Opens

10-18-2022Student Loans

The U.S. Department of Education has officially launched a website accepting applications for student loan forgiveness.

Under the program, those with federally guaranteed student loans can have up to $20,000 of their eligible student loan debts forgiven, depending upon certain qualifying factors. Those who had also received Pell Grants, which are for lower-income students, can have up to $20,000 forgiven, while non-Pell Grant recipients can have up to $10,000 in debts forgiven.

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The Independent Contractor Dilemma

09-23-2022Legislation

Gig economy companies classifying their workers as independent contractors continue to face lawsuits, state action, and federal agency enforcement.

For much of the last decade, a legal and regulatory storm at the state and federal level has surrounded classification of workers as “independent contractors” or “employees.” The dramatic growth of the gig economy, especially app-based service such as Uber, Lyft, Door Dash, Instacart, etc. has contributed to the upheaval. Uber and Lyft have faced lawsuits across the country contending they misclassified their drivers as independent contractors rather than employees in violation of the Fair Labor Standards Act (FLSA) and similar, state wage and hour laws.

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Required Minimum Distribution Formula Change for 2022

08-29-2022Tax Information

The Internal Revenue Service (IRS) updated its actuarial tables that dictate how much a person is required to withdraw from his or her retirement accounts starting at age 72.  This is the first time since 2002. The new tables project longer lifespans. This could be good news for individuals that want to stretch their retirement earnings into the future.

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Court case clarifies deductions for vehicle expenses

08-11-2022Tax Information

You can use a recent Tax Court case ruling to help protect you against the Internal Revenue Service questioning your vehicle expenses.  Gonzalez, TC Summary Opinion 2022-13, 7/18/22 ruled that you can deduct vehicle expenses related to a side-gig, as long as you follow strict rules. 

What you need to know and do:

Generally, expenses relating to use of a car, van, pickup, etc. used for business are deductible. If you drive your own passenger car to visit clients or customers, you may write off the portion of your vehicle’s costs that is attributable to business use, subject to some special limits. If you use your car 80% for business, you can deduct 80% of the costs. 

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Should You Consider a Roth Conversion While the Market is Down?

07-13-2022Retirement

While few people like the stock market declines we are experiencing.  There are some bright spots and opportunities.  Should you consider converting a traditional IRA to a Roth during a down market?

Traditional IRAs are pre-tax dollars.  While the money grows in the Traditional IRA tax-free; at distribution, you are taxed at your ordinary income tax rates.  A Roth IRA invests post-tax dollars.  Assuming you meet certain criteria, all Roth IRA distributions are income tax free.

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IRS changes 2022 mileage rates effective July 1,2022

06-21-2022Tax Information

The Internal Revenue Service announced on June 9, 2022 an increase to mileage rates for 2022 taxes. The changes are just for the final six months of 2022 only. Individuals taking advantage of this deduction will need to break out their mileage into the proper time category. 

  Jan-Jun 2022 Jul-Dec 2022
Business 58.5¢ 62.5¢
Medical 18¢ 22¢
Charity 14¢ 14¢
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Seven steps to retirement planning

06-06-2022Retirement

A recent TIAA Institute survey reported that 50% of Americans were unable to answer financial literacy questions properly.  While I presume you are not in that group if you are reading this article, here are some highlights to share with your friends.

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Tax Considerations for selling your home

06-01-2022Tax Information

You may qualify to exclude from capital gains from the sale of your primary residence if you meet these criteria:

  1. Ownership test. The homeowner must have owned the home for at least two years of the five-year period ending on the date of the sale.
  2. Use test. The homeowner must have used the home as their main residence for at least two years of the five-year period ending on the date of the sale.
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