Convergence Companies

The Federal Reserve met on 3/19 to discuss interest rates. The current interest rate target remained unchanged at 4.25% - 4.5%. Officials still said they anticipate another half percentage point of rate cuts through 2025. Since the Fed prefers to move in quarter percentage point increments, two cuts this year are anticipated. We will continue to watch as expectations may change!

With quid pro quo contributions, a donor receives something in return. Their deduction is then limited to the amount that exceeds the fair market value of the good or service. If someone donates $30, and they receive a t-shirt worth $20, then the fair market value is $10.

The S&P 500 has ended higher 72% of the time with an average daily gain of 0.78% on March 17, St. Patrick's Day (or the following Monday for years it's a weekend), for the past 25 years. For the average day in that same time period, the average daily return was 0.03%, and it was positive 53.60% of the time. Investors can't agree on the reason for the historically higher average returns, but there's three theories: the luck of the Irish, complete coincidence, and consumers being in higher spirits. When it comes to investing, we find it better to leave the luck to the leprechauns and stick to a long-term plan.

Know the difference between above-the-line and below-the-line tax deductions! Some common above-the-line deductions are: -401(k) contributions -Student loan interest -HSA contributions Some common below-the-line deductions are: -Charitable donations -Mortgage interest -State taxes

Review these 6 scenarios for what to expect with taxes on investments!

Without proper planning, your gifts to your loved ones could create a bigger tax bill than necessary. The lifetime gift and estate tax exemption is currently $13.99 million, but it is expected to go down to around $7 million after the end of this year. That's why now could be your chance to take advantage. Read our latest blog to see 4 different scenarios that explain who pays the gift tax, and when.

If you receive payments for goods and services through platforms like PayPal, Etsy, Venmo, etc., you might get a Form 1099-K when you haven't in years past. For tax year 2024, the reporting threshold is $5,000. It drops to $2,500 for 2025, and to $600 for tax year 2026. To report a 1099-K on your taxes, it will depend if it's classified as hobby or business income. Ask your accountant if you're unsure!

Your hobby can make a profit without it being classified as a business, but do you know at what point the IRS does consider it a business? Use these 9 questions to help figure it out! Even if your hobby isn't classified as a business, don't forget to claim your net profit of $400 or more on your taxes.

Reverse Budgeting, also called Pay-Yourself-First, is a budgeting method that prioritizes your savings goals. With this strategy, you evaluate how much to "pay your future self." A popular option is the 50/30/20 guideline, but each situation is different. After determining how much you can afford to spend, you distribute the savings across your different accounts or savings purposes. What you're left with goes towards your needs and wants. This budget doesn't require you to account for every dollar, like many do. It requires you to adjust your living based on your savings for the future.

If you, like many others, opened a new high yield savings account (HYSA) due to an increase in interest rates, be prepared to add another tax document to your mix. For any interest earned over $10, your bank will send you a 1099-INT form. If you haven't had a HYSA before, this could be easy to forget! If you'd like guidance with your taxes, or any other accounting need, visithttps://lnkd.in/gYg9GzQk