Heman Lawson Hawks LLP

03/17/2023

We had a few friends stop by the office to wish us a !!

11/25/2022

Two tax benefits are available to offset the expenses of adopting a child. In 2022, adoptive parents can claim a credit against their federal tax for up to $14,890 of “qualified adoption expenses” for each eligible child. This will increase to $15,950 in 2023. That’s a dollar-for-dollar reduction of tax. Also, parents may be able to exclude from gross income up to $14,890 in 2022 ($15,950 in 2023) of qualified expenses paid by an employer under an adoption assistance program. Both the credit and the exclusion are phased out if the parents’ income exceeds certain limits. Parents can claim both a credit and an exclusion for expenses of adopting a child but not for the same expenses.

11/24/2022

11/23/2022

The IRS recently announced next year’s inflation-adjusted tax amounts. For 2023, the standard deduction will increase to $13,850 for single taxpayers, $27,700 for married couples filing jointly and $20,800 for heads of household. This is up from the 2022 amounts of $12,950 for singles, $25,900 for married couples filing jointly and $19,400 for heads of household. For 2023, the highest tax rate of 37% will affect singles and heads of households with income exceeding $578,125 ($693,750 for married taxpayers filing jointly). This is up from 2022 when the 37% rate affects single taxpayers and heads of households with income exceeding $539,900 ($647,850 for married couples filing jointly).

11/21/2022

Are you feeling generous this year? Taxpayers can transfer large amounts free of gift taxes to loved ones each year with the proper use of the annual exclusion. For 2022, the exclusion amount is $16,000. The exclusion covers gifts that an individual makes to each recipient each year. So a taxpayer with three children can transfer $48,000 to the children this year free of federal gift taxes. Married couples can consent to give up to $32,000 a year to each recipient because two exclusions are available. Other rules may apply, and you may need to file a gift tax return if you give more than $16,000 or you consent to give gifts with your spouse. We can prepare a gift tax return for you.

11/18/2022

If you have a child or grandchild who’s heading to college in the future, you may wonder about investing in a qualified tuition program or 529 plan. You don’t get a federal tax deduction for a contribution, but the earnings aren’t taxed while the funds are in the program. (There may be a state deduction in your state.) You can change the beneficiary without income tax consequences. Distributions are tax-free up to the amount of the qualified higher education expenses. These include tuition (including up to $10,000 in tuition for an elementary or secondary public school), fees, books, supplies and required equipment. Room and board is also a qualified expense if enrolled at least half time.

11/01/2022

It’s time to think about steps to lower your tax bill for this year and next. If you itemize deductions, you may be able to deduct medical expenses, state and local taxes up to $10,000, charitable donations and eligible mortgage interest. But these deductions won’t save taxes unless they’re more than your standard deduction ($25,900 for joint filers, $12,950 for singles and $19,400 for heads of household). You may be able to work around the deduction limits by bunching discretionary medical expenses and charitable donations into the year where they’ll do some tax good. For example, if you itemize for 2022 but not 2023, you may want to make two years of charitable contributions this year.

11/01/2022

In today’s tough job market and economy, the Work Opportunity Tax Credit (WOTC) may help business owners. The WOTC is available to employers that hire workers from targeted groups who face significant barriers to employment. The credit is worth as much as $2,400 for each eligible employee. The maximum credit amounts are different for some employees ($4,800, $5,600 and $9,600 for certain veterans; $9,000 for long-term family assistance recipients; and $1,200 for summer youth employees). The IRS recently issued information on the pre-screening and certification processes. A pre-screening notice must be completed by the job applicant and the employer on or before the day a job offer is made.