- The Finance Gourmet

HSA Contributions

September 27, 2025September 15, 2025 by Finance Gourmet

A quick reminder not to forget to use your HSA account to pay for ALL of your qualified medical expenses. Remember, you get the deduction based upon CONTRIBUTIONS, and your contributions do NOT have to be made before your expenses are incurred. In other words, if you go to the doctor and get a $180 bill, you can (EVEN AFTER) contribute $180 to your HSA account. Pay the $180 doctor bill (maybe using a rewards credit card), and THEN reimburse yourself the $180 expense. This is the best way to deduct medical expenses if you qualify. Otherwise, remember that you can only deduct medical expenses that are 10% above your adjusted gross income. With an HSA account, every contribution is deductible, regardless of when you use the money to pay medical bills. Also, any medical bills you pay with your HSA cannot be deducted as medical expenses. Also, HSA paid expenses do not count toward the 7.5% floor needed to deduct medical expenses. Remember, the contribution is deductible, not the expense. Contribute money for every qualified medical expense you have, and the net effect is the same as deducting all of your medical expenses. Remember, unlike a FSA, you can …

Deduct Small Business Expenses

September 27, 2025January 23, 2025 by Finance Gourmet

Can I deduct my small business? How do I deduct my sole proprietorship business? That’s a question I get a lot from sole proprietors and other small business owners. The trick is that most information about small business taxes reads like it aimed at larger businesses, specifically, those that have employees. However, the same IRS tax rules that apply to those small businesses apply to entrepreneurs running their own single person business or small family business. It’s an important question because small business expense deductions can lower your overall tax rates and move you down a bracket on the tax tables. When Can You Deduct a Business? There is really one simple test that a business must pass to be tax deductible: Is there a profit motive? For the IRS, the sole determination of whether something is a hobby, or a legitimate, tax-deductible business, is whether or not you are doing it for profit, instead of for fun. Of course, it wouldn’t be the IRS without hundreds of pages of rules, regulations, and numerous publications sorting out just what is a deductible profit motive. There is a somewhat legendary tax law case where a man claimed his golf expenses as …

IRS Standard Deduction 2024 and 2025

January 15, 2025October 23, 2024 by Finance Gourmet

What is the standard deduction amount for 2025, and what about 2023 and 2024? (That way I don’t have to go through and delete that data 🙂 The IRS updated the standard deduction number and it’s a little bit higher this year again. When filing income taxes, taxpayers can choose to either itemize tax deductions, or take the standard tax deduction amount. The IRS adjusts how much the standard deduction is each year based upon inflation. The 2025 standard tax deduction amount is a bit higher than the 2024 deduction amount for most taxpayers because of inflation. Capital One Rewards Catalog 2023 Remember, even though you will be filling your taxes in early 2025, those tax returns are for the year 2024, so use the 2024 standard deduction amount on taxes you work on in the first quarter of 2025. When you file your taxes in early 2025, those taxes are for your income and deductions in 2024. Alright, now that we’ve beaten that horse to death, let’s get to some numbers. 2024 Standard Tax Deduction Amount For use when filing your taxes in early 2025. As usual, there are different deduction values depending upon how you file your income …

Basic Taxes Overview 2024

June 12, 2024 by Finance Gourmet

As June 2024 comes to a close Americans everywhere have stopped thinking about taxes, but the real key to paying less in taxes like the rich do is year-round tax planning. So, let’s do a quick overview of tax law in 2024 and how that will affect filing 2024 taxes in 2025. Tax Basics Form 1040 Let’s begin by kicking out anyone who has unusual scenarios of income or assets. This is going to be a basic tax overview for taxpayers that get W-2 forms, or 1099 forms, or own their own small business. If your income comes from something else like royalties, or mining rights, or whatever, this will not apply to you. This is also true if a trust, or other tax situation drives your income or expenses. Frankly, people in this category probably already have accountants, attorneys, or financial managers. Let’s not clog this up with “But what if…” about situations that don’t apply to “average” scenarios. The basic tax form is Form 1040. For the most basic scenarios, that form is the only thing a taxpayer needed to file. For others, a variety of Schedules are required, the results of those schedules are then added in …

Child Tax Credit 2024

June 12, 2024January 27, 2024 by Finance Gourmet

When you file your 2024 taxes in 2025, you may get a tax credit for each child. The Child Tax Credit for 2024 is $2,000 for each qualifying child. However, the Child Tax Credit phases out for higher incomes. You can claim the Child Tax Credit in addition to the Standard Deduction, even if you do not itemize your deductions. You can take the full Child Tax Credit if you are married filing jointly with a modified adjusted gross income under $200,000. For others the threshold is $100,000. Once you make more money than that, the credit starts phasing out. Any biological children aged 16 or younger are eligible if you are married filing jointly. If you are divorced, then who gets to claim the child tax credit was likely part of your final divorce settlement. If your child is 17, be prepared to be screwed over. You get just $500 for your 17-year-olds no matter how childish they act, or the fact that most of them are still in high school. Beyond that, there are a lot of different rules that I’m not going to cover here, but the IRS has a useful tool to determine if your child …

2024 Section 179 Deduction Limits for Small Businesses Taxes

January 24, 2025February 21, 2023 by Finance Gourmet

Small business tax deductions are important in order to offset high business taxes levied against small business owners and entrepreneurs. This is especially true for work from home entrepreneurs who file as sole proprietors, or as a Limited Liability Company aka LLC, with sole proprietor tax status. Small business owners can get hit with high tax bills thanks to Self-Employment Taxes. Self-employment tax, or SE Tax, is so high because it includes taxes that would usually be paid by the employer. In a typical employer-employee scenario, the employee pays 6.2% in Social Security Taxes. The employer withholds this amount from the employee’s paycheck. What many people don’t realize is that the employer also pays 6.2% in social security tax for the employee. A small business owner that files as a sole proprietor is on the hook for the whole amount! The self-employment tax rate – sometimes called the SE tax rate – is 15.3%, which is 12.4% for social security taxes plus another 2.9% for Medicare taxes. That 15.3% is on top of regular Federal Income Taxes. A successful small business owner in the 30% tax bracket, pays a blood curdling 45% tax rate. And that is before adding Medicare …

Tricks to Save Money On Taxes

February 1, 2023January 19, 2023 by Finance Gourmet

If you have fairly simple taxes, that is ones that do not include several complicated schedules or worksheets that have to be filed, then you might not want to pay for TurboTax or TaxCut or other tax preparation software. But you still don’t really want to go it alone without some sort of double-check. Let’s jump right in with some tricks to save money on taxes. TurboTax For Free TurboTax offers a marketing gimmick where they allow you to do your taxes on the online version of TurboTax for free. You only have to pay when you print or e-file your return. But who says you have to print anything? When you have finished inputting all of your information, and TurboTax has finished crunching all of the numbers, switch to the form view where you actually are looking at an electronic version of the tax form. Copy the numbers down onto Form 1040 that you printed off of the IRS website, and voila. Your taxes are done, and all for free! Obviously, if you have to generate a bunch of extra paperwork or IRS Schedules, this isn’t the method for you. But keep in mind that many of the worksheets …

House Child Tax Credit Bill

November 28, 2022August 12, 2022 by Finance Gourmet

Recently, the Democrats passed a bill called the American Rescue Plan Act, that made some changes and updates to the child tax credit. This was quickly spun as either a middle-class tax cut or raising taxes on the poor. It’s weird to see how people can distort what is really happening in order to fit their own agenda. The Child Tax Credit is $3,000 per child between 6 and 17 years old. The Child Tax Credit is $3,600 for each child under 6 years old. Child Tax Credit Basics The child tax credit is a credit. This is different than a tax deduction. A deduction is something that reduces your taxable income. The actual amount you save on your taxes then is a fraction of the amount deducted. For example, if you made $80,000 and you get $20,000 in deductions, then you pay taxes only on $60,000 in income, which means you get only a percentage of that $20,000 in deductions. A credit, on the other hand, is a reduction not in your income, but in your actual tax. So, a $1,000 tax credit means you actually pay $1,000 less in taxes. A credit is much better than a deduction …

401k Contribution Limits 2022 and 2023

October 31, 2022March 22, 2022 by Finance Gourmet

401k contribution limits prevent higher income taxpayers from stuffing too much money tax-free into their 401k plans. Each year, the IRS adjusts tax numbers due to either tax law changes, or statutorily mandated adjustments. However, in some cases, the tax amounts are tied to inflation so that they automatically adjust. In many cases, numbers are only modified for the current tax year when a certain limit or threshold is met. Limits for 401k contributions are indexed to inflation and adjusted every year in this manner, provided there is enough change caused by inflation to modify the numbers. 2022 401k Contribution Limits The current 401k contribution limits for 2022 were set by the IRS in late 2021. These limits are tied to an economic index that measures the overall cost of living. The index is designed to rise with inflation. By tying 401k contributions to the index, Congress doesn’t have to pass a law to change the 401k income limits or maximum annual 401k contribution amounts for 2022. The 2022 maximum 401k contributions limits are higher than they were in 2020 because there was enough inflation during the year to cause an increase. Check out this close look at the details of Acorns …

How To Qualify for the Earned Income Credit – The Easy Version

February 10, 2022 by Finance Gourmet

OK. Let me start by saying that if your adjusted gross income is going to end up in the six figures, you’re out. Go read this article about investing with Acorns, or this one about Credit Karma reviews, or this one about maximizing cash back with Rakuten. Also, there are some “special situations” that we won’t be covering here. This is the easy version. You have kids, you might qualify for the earned income credit. Then, here is how to qualify for the earned income credit, or EIC. Qualifications for EIC So how, do you qualify for the EIC? Basically, have a low enough income, and have some kids, while working. Your Income Has to Be Low Enough You need kids that are your dependents You have to have earned income (most earned income come from a job or home business) You have to have a valid Social Security Number, and so does the child or children you are using to claim the credit Or certain special situations. Since this is short version we are covering it here. Check out the IRS page. Your income needs to be under $57,414. Your investment income has to be below $10,000. Earned income …