The Burns Firm, Ltd.

Educators May Be Able to Claim 2 Deductions For 2026 Classroom Expenses : Teachers and other educators often spend their own money on books, supplies, equipment and other classroom needs. For 2026, eligible educators may have two ways to deduct qualifying unreimbursed expenses: A deduction of up to $350 is available whether or not they itemize, and a new deduction with no dollar cap is available to itemizers. Educators eligible for both deductions can first claim the above-the-line deduction and reap the benefits of reducing their adjusted gross income and, if they have eligible expenses in excess of $350, claim the itemized deduction for those excess expenses. (Educators can’t claim both deductions for the same expenses.) Contact us to see if you may be eligible. https://www.theburnsfirm.com/

Divorce Cases: Active versus Passive Appreciation - It's common in divorce cases for an interest in a closely held business or professional practice to be the marital estate's most valuable asset. In many states, when the owner-spouse brings this asset to the marriage, a valuator may be called upon to distinguish between active appreciation in the business's value (which is subject to division) and passive appreciation (which isn't). https://www.theburnsfirm.com/about-us/blog/

Tax Planning Can Ease the Sticker Shock of Raising a Child: If you're a parent who's been doing some back-to-school shopping lately, you know that raising a child is expensive. Whether real or virtual, that overflowing cart is just one small part of a much larger bill that you have to pay over the better part of two decades. And it's natural to wonder: What does it really cost to raise a child today? Here's a closer look at the financial impact and how proactive tax planning can help ease your burden. https://www.theburnsfirm.com/about-us/blog/

Look Before You Leap When Making Major Acquisitions: Most businesses don't buy anything big without performing "due diligence" — the thorough homework process of checking things out. It's also a good idea for consumers thinking about making a large purchase.

Getting Divorced? Consider Taxes When Splitting Up Retirement Accounts https://www.theburnsfirm.com/about-us/blog/

Could your traditional 401(k) or IRA balance be too large? Maybe!

Contributing as much as you can to tax-deferred retirement accounts can be a good idea. Contributions are pretax or deductible, and tax-deferred compounding can turbocharge growth.

But sometimes maximizing tax deferral is counterproductive. This may be true if tax rates increase by the time you pay tax on distributions. Also, retirement plan distributions are taxed at your ordinary-income rate, not your long-term capital gains rate. So you may pay a higher tax rate on dividends and growth than you would if you held the investments in a taxable account.

Fortunately, there are strategies that can help. Contact us to learn more. https://www.theburnsfirm.com/about-us/blog/

Self-Employed? You May Be Eligible for the Home Office Deduction. Self-employed individuals may still be eligible to deduct home office expenses from their self-employment income. Here's how. https://www.theburnsfirm.com/about-us/blog/

Disability benefits may have income tax consequences you don’t expect: Disability insurance is a valuable benefit provided by many employers. It replaces a portion of the insured person’s income — typically 45% to 65% of pre-disability earnings. But in some cases, income taxes can take a bite out of disability benefits.

Taxability usually hinges on who paid the premiums. If your employer paid them, the payouts from the policy generally will be taxed to you just as if the income were paid directly to you by your employer. If you paid the premiums, the payments you receive generally won’t be taxable. State tax treatment of disability benefits varies.

We can help you assess how much disability coverage you need depending on the tax consequences and other factors. https://www.theburnsfirm.com/about-us/blog/

The New Markets Tax Credit may provide tax savings to investors and financing opportunities to qualifying businesses in low-income communities. Here’s how the program works. https://www.theburnsfirm.com/about-us/blog/

Be Tax-Smart With Your Mutual Fund Investments: Mutual funds offer an easy way to invest in a diversified portfolio. But the tax treatment isn’t so simple.

One challenge is that certain mutual fund transactions are treated as sales even though they might not seem like it. Another is that determining your tax basis for shares sold can be complicated, especially if you dispose of only part of your interest in the fund and the shares were acquired at different times for different prices. Also, mutual fund capital gains distributions are generally taxable, even when reinvested in the fund.

If you have questions about the tax treatment of mutual funds, contact us. We can help you be a tax-smart mutual fund investor.