I've been meaning to write this since I saw many returns that shared these common themes, and I continue to see them when I review my coaching clients' returns.

The below is more or less a summary of common themes that popped up with the tax returns I have prepared or reviewed for my clients. 

• You will almost always owe taxes if you have RSU vested. 22% is the regular Federal withholding for any RSU vesting. If you have RSUs, you are most likely already at the 32%, 35%, or 37% Federal tax bracket. That alone is already an under-withholding of 10% to 15%. For a $100K of RSU, that's already an additional tax liability of $10K. With a tax liability in the five digits, working with a tax professional is worth investing money in.
• You have to pay ordinary income tax on the discount you get from ESPP. Usually, it's a 15% discount. Nothing is free. You pay this when you sell. No taxable event when you buy ESPP. Most people fail to report this part in the year they sell.
• If you have any stock options, this is the part when I actually will tell you that unless you are adept with the intricacies of how these work, you are better off hiring a tax professional. Don't play smart with this. It can become a VERY costly mistake. I've had a few clients owe taxes the size of a mortgage. Have you noticed the market recently? You risk selling investments low due to your optimism in exercising all those stock options the previous year with no proper tax planning. Now talk about tax liabilities you will have to deal with next year when you do your 2022 tax return.
• Sometimes self-preparation is not worth it. I reviewed a couple of my coaching clients' tax returns. Some have made costly mistakes where we have to amend their return. Amending takes longer to process so you will get your money back much later. Most don't understand how to report the supplemental that goes with their 1099B, so they pay more taxes than they should be.
• Depreciation on a rental is not a "free expense." You'll end up paying that back when you sell.
• You need to have a tracking system like cointracker.io if you'll continue doing crypto. I don't prepare my clients' tax returns if they don't have a tracking system since it's a pain in the butt trying to figure out the gains and losses and just trying to identify from the time you buy to sell. Have you looked at the transaction history and tried dissecting it? Do yourself a favor and sign up for the app. I am not a crypto fan, so I don't invest in it.
• Stay on top of anything you do throughout the year that'll trigger a taxable event, as you will be surprised by your tax bill when tax time comes. Some of the everyday taxable events are RSU vesting, ISO exercise (vest doesn't count), selling stocks/index funds/ETFs (buying doesn't count), selling ESPP (buying doesn't count), 

I will include a section in the Financial Literacy Course (now available for pre-order) deep-diving into some of the above. Understanding your taxes is essential. You can now pre-order and take advantage of the 15% discount (code MomsAreAwesome) till Sunday, May 15th.

The course, however, won't help you figure out proper tax planning. I emphasize tax planning is MORE critical than tax preparation. By the time you file your taxes, it's too late to do anything. So invest in tax planning, especially if you have company equities. Please don't make the costly mistakes of some of my clients trying to save money by not hiring a tax professional. I offer tax planning sessions throughout the year as part of my financial coaching sessions. Schedule a complimentary chat now.

Coronavirus Aid, Relief and Economic Security (CARES) Act
CARES was signed by the President on March 27, 2020.

The stimulus package was signed to provide financial relief to individuals, families, and businesses.

Helpful calculator for you to calculate your stimulus check.

The rebate is a one-time payment from the Federal Government and is mainly referred to as the stimulus checks.

The amount is subject to income limitations – phase-out begins at $75K of AGI (Adjusted Gross Income).

See the screenshot below.

How is income determined for the payment?​

• Based on AGI on 2019 tax return if filed
• Else, based on AGI of 2018 if filed
• Else, based on 2019 Social Security or Railroad Retirement Benefits statement on file with the SSA

If you meet one of the criteria below should still file for 2019 tax return even if you are not required to do so

• Filed a 2018 return but have a new qualifying child or children since 2018
• Have a taxable income in 2019, even if under the filing threshold

You should not file a “zero” return to receive the rebate.

The following individuals are NOT eligible for a recovery

• Nonresident aliens
• Any individual who was claimed or could be claimed as a dependent on another individual’s 2019 income tax return
• Any individual who does not have a social security number
• Any qualifying child who has not been reported on a 2018 or 2019 tax return with a valid SSN

Will the recovery check need to be paid back?

• According to Congressional Research Service (CRS), no “when taxpayers file their 2020 income tax returns in 2021, they find that the advanced credit is greater than the actual credit, then they would not be required to repay the excess credit. In contrast, if the advanced credit is less than the actual credit, then taxpayers would be able to claim the difference in their 2020 income tax returns.

How will individuals receive their rebates?

• It will be issued via direct deposit to individuals who have their banking data from a prior tax refund on file with the IRS.
  • Individuals who filed a tax return in 2018 or later and requested their refund be issued via direct deposit for that year will be considered to have their banking information on file with the IRS.
  • For those who do not have bank information on file, the Treasury Department is working on creating a web-based system to gather it.
  • IF no bank information is provided via the above methods, a paper check will be issued.

Need help or more questions? Send me an email ([email protected]) or set up a tax consultation chat with me using this link.

I hang out a lot on LinkedIn. Feel free to connect or follow me on LinkedIn!

Need to talk to someone about your finances? Go ahead and set up a complimentary chat using this link. 

I personally don't think there's anything wrong in owing the IRS some money. I prefer this over a refund. Why? Because owing money means you got a ZERO percent interest loan from the IRS versus them getting the interest free loan from you through a refund. The only thing I would want to avoid is the underpayment tax penalty. There are 3 ways to avoid that and I talk about that in the video below.

I did a Facebook live of the 5 different filing status of your tax return.

In this video, I talk about the most important component to pay attention to when you're on subsidized health insurance here in the US. If you don't estimate this correctly, you might owe thousands of dollars when tax time comes!