Tax-Free Rental Income
Freelance Finance Fix
Are you aware you can rent out your home for tax-free income? That’s right—for freelancers, solopreneurs, and small business owners who love to travel, renting your property might be an excellent way to earn tax-free income. In this episode, Alex covers what the Augusta Rule is and how to take full advantage of renting your home for tax-free income, along with details about Section 280A. In this episode, you’ll also hear: How the Master’s Golf Tournament changed short term rental rules Tips for taking advantage of the Augusta Rule Potential benefits of...
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Tempted by High Interest CDs? Here's How to Protect Your Financial Future
Freelance Finance Fix
Have you noticed more banks enticing you with higher rates? Higher rates generally mean higher savings but there’s no guarantee to how long this seemingly win/win situation will actually last. In this episode, Alex shares why banks are offering high rates and why you should review your long term financial goals before making any changes to your current investments. In this episode, you’ll also hear: Why banks are pushing longer term investment offers Inflation as a benchmark for financial planning Long-term power of compounding and equity market’s growth ...
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Common Questions about Home Office Deductions
Freelance Finance Fix
Our last episode, “Are You Maximizing Your Home Office Deductions?”, focused on home office deductions and details about Form 8829 Expenses for Business Use of Your Home. Be sure to review IRS Publication 587 and make sure you're using the most advantageous calculation when determining the business use percentage of your home. In this episode, Alex answers the most common questions about home office deductions to ensure your claim is as legitimate as possible. In this episode, you’ll also hear: Which spaces in your home qualify for deductions ...
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Are You Maximizing Your Home Office Deductions?
Freelance Finance Fix
Although the April tax deadline has passed, now is a great time to review your return to ensure you’re maximizing your home office deductions. In this episode, Alex dives into home office deductions, different ways to compute your home office use, and what to know about Form 8829 Expenses for Business Use of Your Home. In this episode, you’ll also hear: What constitutes a business use area in the home Gross square footage and usable square footage calculations Getting the most out of your home office deduction Must-listen moments: [00:01:46] Based on a...
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Quarterly Tax Payments Simplified
Freelance Finance Fix
Our previous episode, “A Freelancer’s Guide to Quarterly Tax Payments,” covered the basics of estimated tax payments and avoiding underpayment penalties. In this episode, Alex discusses safe harbor provisions and determining your estimated tax payment. Be sure to check out Publication 505 by the IRS to learn more about estimated tax withholdings and safe harbor provisions. In this episode, you’ll also hear: Benefits of safe harbor provisions for non-W2 income earners 90% accuracy for estimated payments and paying 110% of prior year taxes Pro-tips for...
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A Freelancer’s Guide to Quarterly Tax Payments
Freelance Finance Fix
You might be mistaken if you’re a small business owner or freelancer and think you only have to pay the IRS once a year. Estimated tax payments only apply in certain states, so review your local tax laws to avoid any penalty. In this episode, Alex breaks down what estimated tax payments are, who has to pay them, and how to pay them on time, and shares some insight to keep clear of paying the IRS more than is absolutely necessary. In this episode, you’ll also hear: Avoiding underpayment penalties Pay-as-you-go tax and how taxes are remitted to the IRS Who...
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Most Common 529 Questions
Freelance Finance Fix
Our prior episode, “529 Plans are for More than Education” highlighted that the traditional 529 College Savings plans are set for big changes. While 529 accounts used to be where parents and grandparents invested money to fund the next generation's higher-level education costs like tuition, the Secure Act 2.0 includes provisions that if unused, this money can be rolled into a beneficiary’s Roth IRA. There are restrictions and rules that must be followed, but listen to the Freelance Finance Fix Episode 13 for all of the details. In this episode, Alex addresses 8 of the most common...
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How to Use a 529 College Savings Plan for More than Education
Freelance Finance Fix
Traditionally, 529 accounts have been an option in which savings could be accumulated and invested toward the purpose of funding a loved one’s education expenses. Money can be set aside in the 529 plan as a lump sum or over time, invested in the markets, and grow tax free. The real beauty and benefit of a 529 education savings plan is typically realized when the beneficiary uses the money and all its tax-free growth on qualified education expenses. But now, thanks to new legislation, the savings and growth from this investment can potentially be rolled into a Roth account. In...
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How Much Tax Would I Owe if I Sell My Home?
Freelance Finance Fix
If you’re planning to sell your primary residence or an investment property, you might qualify for certain options to get the most out of the transaction while saving money on your tax bill. In this episode, Alex details 5 important things to know about how selling your home impacts your taxes. In this episode, you’ll also hear: Understanding capital gains tax vs. ordinary income tax Benefits of Section 121 or a 1031 exchange Why it’s important to review your home’s title Must-listen moments: [00:02:30] If you have received any tax...
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10 Situations Where a Roth Conversion Doesn’t Make Sense
Freelance Finance Fix
Although Roth IRA conversions offer many financial benefits, they can also create financial woes if converted too soon or if tax filings aren’t managed properly. In this episode, Alex shares 10 scenarios where it’ll pay to think twice before executing a Roth conversion. In this episode, you’ll also hear: How Roth conversions impact income benefits and taxes Recognizing Roth conversions do not have a limited time window Why age doesn’t matter for Roth conversions Must-listen moments: [00:03:28] Often, a mistake with Roth conversions or...
info_outlineDo you think you make too much money to contribute to a Roth IRA or that you’ve out-earned your eligibility for a tax-free growth? You might be surprised to learn you can still take advantage of a Roth account regardless of your income.
In this episode, Alex outlines who is eligible for Roth conversions and makes suggestions for when and how to do Roth IRA conversions.
In this episode, you’ll also hear:
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Roth contribution vs. Roth conversion
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Tax implications of Roth conversions
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Multi-year strategy and goals for Roth conversion
Must-listen moments:
[00:01:33] The first thing you need to know about Roth conversions is that anyone and everyone who has a traditional IRA or traditional qualified retirement plan, like a 401k, 403B, or 457 plan, is eligible.
[00:06:26] It can be really helpful to look at past tax years and see what tax brackets you were in and see if you can notice any patterns or trends. Do note that even if you don't expect to be in a higher tax bracket in the future, a Roth conversion can still make a ton of sense for you.
[00:08:18] There are a ton of reasons for Roth conversions…but you need to be crystal clear on your reasons for doing one in any calendar year as there can be some goals which a Roth conversion does not help.
For more detail on financial topics curated just for freelancers, visit www.freelancefinancefix.com
You’re also invited to connect with me on LinkedIn at https://www.linkedin.com/in/alexmlynch/