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Parents who care for a totally and permanently disabled child in their home often receive compensation through Medicaid waiver or similar state programs. In many cases, that income is reported on a Form W-2, but what many taxpayers (and even preparers) don’t realize is that this income may not be taxable at all . Understanding how “difficulty of care” payments work, and how to report them correctly, can have a major impact on your tax liability and refund . What Are Difficult

Mistakes happen, even on tax returns. Whether you forgot income, missed a deduction, or need to change filing status, the IRS provides a clear path to fix errors through an amended return. Understanding when to amend, how to amend, and how long it takes  is essential for both taxpayers and tax professionals. What Is an Amended Tax Return? An amended return is filed using Form 1040-X (Amended U.S. Individual Income Tax Return)  to correct a previously filed Form 1040. You shou

One of the most common (and costly) mistakes new business owners make is not setting aside enough for taxes . Unlike a traditional job, nothing is automatically withheld from your income. That means it’s up to you to plan ahead—or risk a stressful (and expensive) surprise at tax time. This guide will help you estimate what you should be saving based on your income. The Simple Rule of Thumb A good starting point for most self-employed individuals: Set aside 25% to 35% of your

If you invest in stocks or other securities, you’ve probably heard the term wash sale . It sounds technical, but the concept is actually pretty straightforward—and important when it comes to your taxes. What Is a Wash Sale? A wash sale  happens when you sell an investment at a loss and then buy the same (or a “substantially identical”) investment within 30 days before or after  the sale. The IRS doesn’t allow you to claim that loss on your taxes right away. Example: You buy a

Many taxpayers are surprised to learn that Social Security benefits can be taxable. Whether you pay tax—and how much—depends on your total income, not just your benefits. What Determines Taxability? The IRS determines the taxability of Social Security benefits using a calculation called combined income  (also known as provisional income). This figure is not shown directly on your tax return but is used behind the scenes to determine how much of your benefits are included in t

When preparing a tax return, capital gains often come from two primary sources: brokerage transactions reported on Form 1099-B and investment income reported on Form 1099-DIV. Understanding how these forms work—and how they come together on Schedule D—is key to accurate reporting. Capital Gains from Form 1099-B Form 1099-B reports proceeds from the sale of securities such as stocks, bonds, mutual funds, and ETFs. Each transaction typically includes: Date acquired and date sol

For many self-employed individuals and small business owners, a vehicle is an essential part of operating the business. The IRS allows taxpayers who file Schedule C (Profit or Loss From Business)  to deduct the business use of a car or truck. However, there are two different ways to calculate the deduction, and the choice made in the first year the vehicle is used in the business  can have lasting consequences. Understanding these rules is critical to maximizing deductions wh

If your business is profitable and growing, staying a sole proprietor may be costing you more in taxes than necessary. One of the most effective strategies for established self‑employed professionals is transitioning from a sole proprietorship  to an S‑Corporation —and pairing it with a Solo 401(k) . This structure can significantly reduce self‑employment taxes, increase retirement savings, and create a more scalable long‑term tax strategy. Below is a clear, step‑by‑step over

In most cases, no . Under Internal Revenue Code §274, dues paid to clubs organized for business, pleasure, recreation, or social purposes are not deductible . This includes country clubs, golf clubs, athletic clubs, airline clubs, and similar organizations. This rule applies to self-employed individuals, S corporations, partnerships, and C corporations. There is no entity workaround. What Is Not Deductible? Membership dues Initiation fees Capital assessments Entertainment at

If you’re self-employed and thinking about buying a heavy SUV—like a Mercedes-Benz G-Class (commonly called a G-Wagon)—you’ve probably heard that you can “write off the whole thing.” The short answer: maybe a large portion of it, but not automatically 100%. Let’s walk through how it actually works. Why the 6,000+ Pound Rule Matters Vehicles with a Gross Vehicle Weight Rating (GVWR) over 6,000 pounds  are treated more favorably under the tax law than lighter passenger vehicles

Paying for higher education can be a significant financial commitment, but the tax code offers two important credits that may help reduce the cost: the American Opportunity Tax Credit (AOTC)  and the Lifetime Learning Credit (LLC) . Understanding how these credits work—and which one applies to your situation—can make a meaningful difference on your tax return. American Opportunity Tax Credit (AOTC) The American Opportunity Tax Credit is generally available for undergraduate s

Clear. Fair. Based on Complexity. At Two Teachers’ Tax Service, tax preparation fees are based on the level of work required , not a one-size-fits-all flat fee. Each return is reviewed individually to ensure accuracy, IRS compliance, and that all applicable credits and deductions are properly applied. All prices listed are starting prices . Final fees depend on the forms, schedules, and calculations needed to complete the return. Simple Tax Return Starting below $200 – $250 G

Many taxpayers assume that once a tax return is filed, the opportunity to make improvements has passed. In reality, a professional tax review of a prior-year return can uncover missed credits, deductions, and carryforwards that may result in significant refunds or future tax savings. This type of review is especially important when life circumstances change, tax laws evolve, or returns were prepared without a deeper analysis. A Real Example of the Value of a Tax Review Recent

For self-employed individuals who work from home, the home office deduction can be a valuable way to reduce taxable income. The IRS allows eligible taxpayers to deduct a portion of certain home expenses when part of the home is used for business purposes. However, the deduction comes with strict rules, specific qualification requirements, and two different calculation methods. Understanding how the home office deduction works is essential to claiming it correctly and avoiding

When you’re looking for professional tax help, one credential worth knowing is the Enrolled Agent (EA) . An Enrolled Agent is a federally licensed tax professional authorized by the IRS , and at Two Teachers' Tax Service , Enrolled Agents help individuals, families, and small business owners with tax preparation, tax planning, and IRS resolution. Enrolled Agents earn their credentials by passing a comprehensive IRS exam or through years of IRS experience, and they are require

If you’re self-employed, taxes work a little differently than they do for traditional employees. One of the biggest differences is something called self-employment tax , often referred to as SE tax. Understanding how this tax works can help you avoid surprises and plan more effectively throughout the year. Self-employment tax exists to cover Social Security and Medicare  for individuals who work for themselves. When you’re an employee, these taxes are withheld from your paych

Many taxpayers hold on to stacks of receipts, statements, and paperwork year after year out of fear that the IRS might one day ask for them. While good recordkeeping is important, the reality is that most people don’t need to keep nearly as many tax records as they think. Understanding how today’s tax rules work can help simplify your system and reduce unnecessary clutter. One of the biggest reasons recordkeeping has become simpler is the standard deduction . The standard ded

Paying for childcare or dependent care can be one of the biggest expenses working families face. Fortunately, the federal tax code offers some relief through the Child and Dependent Care Credit (CDCTC) . As we head into 2026, it’s important to understand how this credit works, who qualifies, and why planning ahead matters. The Child and Dependent Care Credit is designed to help working individuals and families offset the cost of care that allows them to work or actively look

A new type of savings account for children—often referred to as “Trump Accounts”—was created under the One Big Beautiful Bill Act of 2025. Officially known as Invest America Accounts , these accounts are designed to help children begin building long-term savings from an early age. While the concept is new, the goal is familiar: encourage investing and financial security for the next generation. These accounts function somewhat like an IRA for minors. Contributions grow tax-de

If you live in a state with higher income or property taxes, you’ve probably heard of the SALT deduction—and you may have felt its limitations over the past several years. SALT stands for State and Local Tax deduction , and it allows taxpayers who itemize to deduct certain state and local taxes they pay, including state income taxes, sales taxes, and property taxes. Under the 2017 Tax Cuts and Jobs Act (TCJA), the SALT deduction was capped at $10,000. While the TCJA significa