Author: 16783607

Tax Tip: A Checklist of Common Errors When Preparing Your Tax Return

Properly preparing your tax return can be tricky, but here are some tips to help you avoid common errors:

  • Submitting your tax return online ensures greater accuracy than mailing it in. The e-file system can detect common errors and send your filing back to you for you to correct, saving you a ton of time in processing and delays.
  • Make sure to clearly print or type your full name, taxpayer identification number or SSN, and current address (including zip code).
  • Choose only one correct filing status.
  • Enter your income on the correct lines and include a Form 1040 to declare additional income and adjustments as needed.
  • Put brackets around negative amounts.
  • Keep a copy of the signed return and schedules for your records.

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov6

Footnotes and Sources

  1. IRS.gov, January 3, 2021

Weekly Market Insights: Stocks Dip on Inflation Report

A higher-than-expected inflation report triggered a sell-off on Friday, leaving stocks in the red for the week.

The Dow Jones Industrial Average lost 4.58%, while the Standard & Poor’s 500 dropped 5.05%. The Nasdaq Composite index slid 5.60% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, declined 1.81%.1,2,3

Inflation Upends Stocks

Stocks gyrated between gains and losses last week until sliding lower on Friday’s hot inflation report, which heightened worries over a more aggressive Fed and a further economic slowdown. Stocks moved higher to begin the week, despite rising bond yields, a profit warning from a major retailer, and Senate testimony by Secretary of Treasury Janet Yellen, who said that inflation was likely to remain elevated.

Stocks turned lower later in the week on renewed concerns of an economic slowdown, sparked by a downward revision in The Federal Reserve-Atlanta’s real-time estimate of second-quarter GDP growth and a drop in new mortgage applications. Investors lightening up on stocks ahead of Friday’s inflation report may have also contributed to Thursday’s selling.

Inside Inflation 

Consumer prices rose 8.6% year-over-year in May, marking the highest rate since December 1981. Price increases over the last 12 months were driven by a 34.6% jump in energy prices and by food costs, which climbed 10.1%. Used car and truck prices, which had seen three straight months of declines, rose 1.8% from April, while airfares soared 12.6% in May.4

May’s inflation exceeded economists’ forecasts and dashed the hopes that inflation had plateaued. In a separate economic report on Friday, real wages (net of inflation) fell 0.6% in April and were lower by 3% from 12 months ago.5

Footnotes and Sources

  1. The Wall Street Journal, June 10, 2022
  2. The Wall Street Journal, June 10, 2022
  3. The Wall Street Journal, June 10, 2022
  4. CNBC, June 10, 2022
  5. CNBC, June 10, 2022

Tax Tip: What To Do if You Didn’t Receive Your W-2

If you don’t receive your W-2 or 1099 by January 31 of the year, you are filing taxes, or if the information on these forms is incorrect, contact your employer/payer. If you still haven’t received the forms you need by the end of February, you can contact the IRS at 800-829-1040, and they may be able to help.

When you contact the IRS, they will also reach out to the employer/payer for the information you need, and they will also send you Form 4852, which is a substitute for a W-2 or 1099. To do this, they will ask for your employer/payer’s name, address, and phone number (as well as your information).

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov6

Footnotes and Sources


6. IRS.gov, January 13, 2021

Weekly Market Insights: Stocks Slip on Mixed Economic News

In a holiday-shortened week of volatile trading, stocks surrendered some of the previous week’s strong gains.

The Dow Jones Industrial Average fell 0.94%, while the Standard & Poor’s 500 declined 1.20%. The Nasdaq Composite index lost 0.98% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.17%.1,2,3

An Uncertain Market

Stocks experienced wild swings last week, in part, due to ongoing uncertainty over economic health and the path of inflation. Investors seemed conflicted when interpreting the data, in some instances viewing economic strength as a negative since it may mean more aggressive rate hikes from the Fed.

Illustrative of how this uncertainty has played out, stocks surged higher on Thursday despite comments from Fed Vice Chair Lael Brainard indicating it’s unlikely that the Fed will pause on rate hikes. Then on Friday, stocks dropped as a better-than-expected jobs report raised concerns about monetary policy.

Strong Job Growth

The U.S. economy added 390,000 jobs in May, a slowdown from recent months but higher than consensus estimates. Job gains registered in several categories, led by leisure and hospitality, professional and business services, and warehousing and transportation. The retail sector lost jobs.4

The unemployment rate remained unchanged at 3.6%. Wage growth cooled off, with a 12-month increase of 5.2%, down from April’s year-over-year jump of 5.5%. Finally, the labor participation rate ticked higher again, reflecting how job availability is helping to pull Americans off the labor-market sidelines.5

Footnotes and Sources

  1. The Wall Street Journal, June 3, 2022
  2. The Wall Street Journal, June 3, 2022
  3. The Wall Street Journal, June 3, 2022
  4. CNBC, June 3, 2022
  5. CNBC, June 3, 2022

Tax Tip: Are Medical and Dental Expenses Tax-Deductible?

If you file your taxes using itemized deductions, you may be able to deduct medical and dental expenses for yourself, your spouse, and your dependents. According to the IRS, you may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income.

Some types of medical care expenses that may be deductible include:

  • Payments for the diagnosis, cure, treatment, and prevention of a disease.
  • Payments to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners.
  • Paying for inpatient hospital care or nursing home care.
  • Fees associated with inpatient treatment for alcohol or drug addiction.
  • Payments to participate in a weight-loss program for a specific disease diagnosed by a doctor (such as obesity).

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov7

Footnotes and Sources

  1. IRS.gov, February 17, 2021 

Weekly Market Insights: Confidence in Fed Helps Spark Market Rally

Stocks posted solid gains for the week, buoyed by the release of Fed meeting minutes and upbeat earnings from mid-size and discount retailers.

The Dow Jones Industrial Average jumped 6.24%, while the Standard & Poor’s 500 advanced 6.58%. The Nasdaq Composite index gained 6.84% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 2.09%.1,2,3

A Good Week

The stock market staged a broad rally last week, ignited by the release of minutes from the May’s Federal Open Market Committee (FOMC) meeting. The meeting notes eased concerns that the Fed might pursue a more aggressive monetary tightening stance than the Street had anticipated.

Investor sentiment rose owing to solid earnings and encouraging guidance from several mid-size and discount retailers, which eased concerns about the health of the American consumer. A smaller rise in the personal consumption expenditures price index, the Fed’s preferred measure of inflation, triggered a strong rally on Friday. The powerful move ended seven straight weeks of stock losses.4

Fed Minutes

The minutes from May’s FOMC meeting were released last week. They confirmed the likelihood of at least two successive 50 basis point interest rate hikes. The minutes also indicated they might need to raise rates to a level that acts to restrict economic growth, something that Fed Chair Jerome Powell acknowledged might be a painful process.5

Not all Fed members are fully committed to the more aggressive rate hikes. Last week, Atlanta Fed president Raphael Bostic wrote that a pause in rate increases in September might be appropriate. He joined other members in suggesting that economic conditions may warrant reconsideration of additional rate hikes beyond those already signaled by Powell.6

Footnotes and Sources

  1. The Wall Street Journal, May 27, 2022
  2. The Wall Street Journal, May 27, 2022
  3. The Wall Street Journal, May 27, 2022
  4. CNBC, May 27, 2022
  5. The Wall Street Journal, May 25, 2022
  6. The Wall Street Journal, May 25, 2022

Tax Tip: Don’t Forget to Check Your Withholding

When was the last time you checked your tax withholding? Having the correct amount of tax withheld from your wages is an essential part of properly managing your taxes. The amount you withhold depends on your income, the number of children you claim on your return, and more.

The IRS has a helpful tool on their site called their Tax Withholding Estimator that can help you know if you have too much or too little tax withheld from your wages. Before using the tool, make sure you have all your paperwork handy, including your W2, 1099, 1095-A, and 1099-NEC, and any other forms you need to determine how much of your income is taxable.

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov5

Footnotes and Sources

  1. IRS.gov, January 20, 2021  

Weekly Market Insights: Recession Concerns Rising

Recession fears grew last week following weak earnings reports from major retailers, sending stocks lower.

The Dow Jones Industrial Average fell 2.90%, while the Standard & Poor’s 500 lost 3.05%. The Nasdaq Composite index dropped 3.82% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.84%.1,2,3

Trending Lower

Stock prices remained in a downtrend, capped by a sell-off on Wednesday following a succession of disappointing earnings reports from several major retailers. Despite solid April retail sales and industrial production data, weak economic numbers from China and shrinking profit margins at U.S. retailers fanned recession fears throughout the week.

Rising yields, which have been an overhang to the markets in recent weeks, turned lower as investors appeared to move cash to bonds from stocks. But lower yields did not help stock prices, which closed out the week with a volatile trading session.

Cloudy Picture with Retailers

Investors received a mixed message from the retail sector. April’s retail sales increased 0.9% from March, signifying that consumer spending remained strong. But it was difficult to determine from the retail sales report whether the increase was a function of higher retail prices or a resilient consumer.4

It was also a big week for earnings reports from some of the nation’s largest retailers. Results were disappointing as retailers struggled with supply chain issues, higher costs, and misaligned product mix. Some retailers indicated a drop in the number of transactions, suggesting that shoppers reduce purchases due to higher prices on essential items.

Footnotes and Sources

  1. The Wall Street Journal, May 20, 2022
  2. The Wall Street Journal, May 20, 2022
  3. The Wall Street Journal, May 20, 2022
  4. The Wall Street Journal, May 17, 2022

Tax Tip: Receive Your Tax Return Quicker With Direct Deposit

Want to receive your tax return quicker? The IRS shares that the best way to get your refund is to file your return online and provide your direct deposit info. In addition to receiving your refund quicker, there are a few other benefits of using direct deposit.

One benefit is splitting your refund into several financial accounts through direct deposit, including checking, savings, health and education, and certain retirement accounts. Using direct deposit is also fast, secure, and accessible. To sign up for a direct deposit, you need to provide your bank account number and routing number. Taxpayers should have this information available when ready to file because the IRS can’t accept this information after filing a return.

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov5

Footnotes and Sources

  1. IRS.gov, February 16, 2021

Weekly Market Insights: Inflation Takes Center Stage

In a volatile trading week, stocks extended their losses as economic growth and inflation concerns soured investor sentiment.

The Dow Jones Industrial Average dropped 2.14%, while the Standard & Poor’s 500 lost 2.41%. The Nasdaq Composite index fell 2.80% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 3.21%.1,2,3

A Turbulent Week

Inflation moved to center stage last week with the release of April’s Consumer Price Index (CPI) and the Producer Price Index. Both numbers came near their 40-year highs but were lower than March’s year-over-year numbers. The results heightened investor anxiety about future Fed monetary tightening and its impact on economic growth.

In recent weeks, technology stocks have borne the brunt of the downdraft as investors lightened up on risk exposures, with some of the mega-cap tech names getting swept up in the selling pressure. Cooling import price increases buoyed spirits on Friday, helping spark a rally that reduced the week’s losses.

Inflation Stays Hot

Investors were greeted with a mixed CPI report, looking for signs that inflation may be cooling. Year-over-year costs rose 8.3%, slower than the previous month but faster than consensus estimates. Excluding food and energy, core inflation climbed 6.2%. Buried beneath the headline number was a 5.1% yearly increase in shelter costs, the most significant increase since 1991. Shelter costs account for one-third of the CPI.4

Inflation has been a weight on markets all year. Investors are concerned that the persistence of higher prices may tip the economy into recession as increased spending on essential needs crimps consumers’ spending power.

Footnotes and Sources

  1. The Wall Street Journal, May 13, 2022
  2. The Wall Street Journal, May 13, 2022
  3. The Wall Street Journal, May 13, 2022
  4. CNBC, May 11, 2022