Tax Tip of the week

June 24th, 2019

Cash in on summertime tax savings
Summer is usually the time for relaxing, but it can also be a time for tax savings, especially if you're still reeling from an unexpectedly large tax bill in April. Here are five timely tips:

Rent out your vacation home. Do you own a getaway? If you rent out a vacation home part of the time, you may be entitled to deductions like other landlords. This includes the rental-related portion of mortgage interest, property taxes, repairs, utilities, insurance, etc. Keep in mind, if your personal use exceeds certain limits, you can't deduct a loss.

Considering employee raises? Review these ideas

Deciding how to administer employee raises can perplex even the most seasoned managers. How often should raises be given? Should they be given across the board to all workers? If staff turnover is increasing, can you turn back the tide by granting raises to the most productive workers? There's a lot to consider.

As you create or update your plan for giving out employee raises, here are some ideas to consider:

Pros and cons of merit raises. You may think that giving everyone the same raise (either percentage or dollar amount) seems impartial and will produce harmony. But there's a downside. Your top performers - workers who sell more widgets, meet customer demand more often, and maintain a great work ethic in the face of additional responsibility - often leave if they're recognized the same as employees who show up late, have a bad attitude, or perform poorly. To solve this, consider establishing specific goals along with tiered raises for employees who meet or exceed published goals whenever possible.

Get in the habit of saving
Do you save regularly? If not, you should reconsider. Developing a saving habit is one of the best things you can do for your financial health.

In the short term, savings can provide you a cushion to deal with emergencies, such as a job loss, unexpected home repairs, medical bills, etc. It will also help you reduce or eliminate your need to take out loans or other financing. Most importantly, building up savings while you work can mean the difference between a comfortable retirement and scraping by on Social Security benefits.