Tag Archives: taxes

IRS Tax Information for 2018

Suffice it to say, 2018 might become in interestingly confusing tax year, as the federal government is presently looking at making a lot of changes… if Congress ends up passing most of it. With that said, there’s a lot of tax information we presently have that’s going into effect at the beginning of the year. Our disclaimer is that some of these things might change during 2018, including health care taxes. The best we can do is share with you some of what we know right now.

For instance, the highest tax rate for those making more than $480,050 a year is currently 39.6%. That rate remains steady, but it’s possible with the new bill that it’ll come down. The flat tax rate is $134,244, which means if you make a million dollars in one year you’ll be paying around $340K to the federal government.
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What You Need To Know If You Have Even One Employee In New York State

Our state is pretty interesting; that’s a nice way to lead into employment and taxes when it comes to our business. This time around I’m talking about taxes for our employees. There are specific types of taxes I want to bring to your attention in case you’re looking to hire at least one person to work for you… legally that is. 🙂

Let’s begin with this reality; if you hire an employee and put that person on the payroll, you already know there are taxes that need to be taken out for both federal and state tax divisions. That’s not a surprise to anyone who pays taxes themselves… which is every single person who’s ever had a job.
Continue reading What You Need To Know If You Have Even One Employee In New York State

Tax Filing Changes For 2017

Time for our annual tax update for all of our clients. Those of you who aren’t our clients yet can read this and decide to become a client of ours; we won’t mind! 🙂

IRS 1040 Tax Form Being Filled Out
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As a reminder, New York State’s Corporate Minimum Fixed Dollar amount is based on Gross Receipts. Extensions should be filed by the beginning of March if possible to allow time for processing. For those of you who file extensions and may owe tax, it is important to note that the tax is due April 15 for personal returns, even if you do not file until October.

New for 2016: Affordable Healthcare Act.

Most of you are aware of the government mandated health insurance. There are many facets to this law, but for 2016, the penalty has increased to a minimum of $695, for those who are not covered by a health insurance plan. If you are married with dependent children it can be upwards of more than $1000, depending on how long you have been without coverage, etc. The penalty is calculated on and reflected on your tax return.

Here are a few of the of the credits/deductions that have been made permanent:

* Educator Credit $250
* Sales tax deduction on Schedule A Itemized instead of state and local income tax
* 179 Depreciation Deduction – Limit is set at $500,000 with a cap of 2 million
* Charitable distribution from and IRA (tax free) for individuals over 70 ½ years old
* Mortgage Insurance Premium – Deduction on Schedule A

For those of you who have children in college, the American Opportunity Credit is still available up to $2,500, which can be used for all four years of post-secondary education. Of the $2,500 40% may be refundable, up to $1000. The lifetime learning credit is based on the first 20% of the first $10,000 of qualified expenses.

The Student Loan interest deduction is still limited to $2,500 per year.

The maximum Earned Income Credit for 3 children is $6,269 and $5,572 for 2 children.

The standard business mileage rate for 2016 is 54 cents per mile, medical and moving are 19 cents per mile and charity is 14 cents per mile.

Please note the IRS is delaying all refunds that include EIC until February 15, 2017. Please see page 2 for more information.

As with any tax law change, there are always exceptions to the rules. If you have any questions, regarding any of the new tax law changes, please call us at the office and we would be more than happy to answer them.

The IRS has put more responsibility on the tax preparers regarding due diligence. We have more paperwork to process while doing a tax return, in addition to asking more questions of our clients that may be redundant.

For those of you that qualify for Earned Income Credit, Child Tax Credit or the American Opportunity Credit (College tuition Credit), please make sure you have the following information readily available when you have your taxes prepared:

• 1098T College Tuition statement (cannot get credit without form)
• Child’s report card, medical records, child care provider record, or other documentation

Additional questions will be asked when your tax return is being prepared in-order to comply with the new rules implemented by the IRS. Thank you in advance for understanding the mandates that are put on us as we prepare your tax returns.

Every client of ours receives a copy of their return when it is prepared, and we’re adding a new feature this year. Each client will receive a CD with a PDF file of their tax return. We are hoping with this new addition you’ll be able to download the information to your computer and have your tax return readily available as needed. If an additional copy is needed throughout the year, the fee will be $15.

As always, we hope you’ve had a safe and healthy holiday season. We look forward to seeing you during tax season.
 

5 Reasons People Wait Until The Last Minute To Pay Their Taxes

We’re about 3 weeks away from when both state and federal taxes are supposed to be submitted. Believe it or not, this means that around 33% of the population hasn’t even started the process at this juncture. Also, out of those who have, around 73% have already received their refunds.

Tax Planning
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It’s not a question of whether it’s beneficial or not to submit taxes early; it’s more of a question as to the types of things that make people wait until the last minute… even if that last minute is a couple of weeks before they’re due. What are the issues? Let’s take a tongue in cheek look at it.

1. Don’t think a refund’s coming

“If I’m not getting a benefit why put in the effort.” Unfortunately, it seems to apply to taxes like pretty much everything else in life. Most people see getting a refund as the ultimate tax benefit, even though for most people it’s really not. Married couples suffer the most with this, which probably explains why it’s more often families than individuals who take the longest to put everything together.

2. Think I might owe something

This is a totally different feeling than the previous one because it comes with a dose of fear. We tend to put off things that we feel will bring us grief, which naturally correlates into tax worries. In many ways it’s not a bad strategy if true because one might not hear from the IRS about it until July or August, and you don’t have to start dealing with the issue until then. However, you still have to submit your taxes on time, and you’ll still be generating interest on your balance because they expect you to have paid something.

3. People forget

By law, everyone expecting a W-2 is supposed to have it before the end of January. Whether it happens or not, “out of sight, out of mind” works well here. If you got it but you’re not one of those people who immediately takes it to a tax preparer it’s possible you might forget. If you never got it you probably would never even think about it until the last possible moment… even then, it just might escape your mind; we’ve seen it happen.

4. Procrastination is the way

Another word for procrastination is nonchalance. Some folk are so cool that not even the pressure of having to get one’s taxes done can shake them. After all, it’s just another “thing” and there are plenty of other things going on that take time precedence. It’s probably not a good strategy if you’re not doing your own taxes however; other people might end up coming before you.

5. Mad at the government

Some people wait until the last minute because they either don’t like paying taxes or are mad at the government. The first part is understandable; the second isn’t. No one likes paying taxes but no one gets out of it… kind of. Even people who get refunds paid something to get it.

But being mad at the government… the government won’t know, and probably isn’t thinking about you. Matter of fact, we’ve known people who haven’t filed taxes in upwards of 3 years, yet never received notice from the government that they owed it. Of course, that means when a person finally gets around to do it that there will be exorbitant penalties to deal with. When that happens, being mad at the government isn’t going to get them paid.

Of course there are more things, but let’s stop with these and see if you wish to share any others.
 

It’s Always Better To Know Your Financial Status

As we come to the close of another year, we first want to wish everyone a very successful 2016. We also want to wish that everyone’s finances are in order, that money is plentiful, and that all goes well for now and forever.

Roll, break me off some...
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Unfortunately, we also know it won’t be this way for everyone. As accountants, one of the things we deal with are those clients who come in at the last minute with their papers and receipts for us to do their taxes, or those who want to request an extension without knowing whether they actually need it or not.

Anxiety is a hard thing to overcome in life. It’s very strong when it comes to looking at one’s finances. There’s an inherent response to fear and anxiety; we try to run away from it, avoid it, and hope it goes away. It might for a short period of time… but eventually if it’s bad or perceived to be bad it catches up with all of us.

We always stand on the side that it’s better to know what one’s financial position is than not know. If it’s good, it alleviates a lot of stress. If it’s bad, knowing as far in advance as possible gives you the opportunity to do something about it.

For instance, something we talked about earlier this year involved a friend’s corporate taxes and how, if they’d been addressed way earlier than they were, he would have actually come out way ahead of the game instead of owing money to the government. Sometimes running away from trouble causes more trouble.

We talk about budgeting a lot here because if you budget, you know how much money you have, where it’s going, and whether you have enough or need to find ways to generate more. Budgets help a lot of people get out of trouble and also alleviates a lot of stress when people realize just how much money they have.

A couple of years ago we had a post that talked about the IRS’ willingness to work with people who owe money on their federal taxes and how accommodating they can be. In actuality, the same applies to most large creditors. All you need to do is pick up the phone and talk to someone and almost always, the person on the other end is willing to help you out somehow. There’s a great fear of calling customer service over things like this but the reality is that not only are they regular people like us, but they know that things happen and they’re going to do what they can to keep a customer who’s possibly going through a rough patch.

Of course, nothing is ever guaranteed. You could call someone who’s not as accommodating. In that case, you do what you can, learn who you shouldn’t be a consumer with, and move on with life. Things are always better when you feel you have a bit of control over your life and finances rather than being afraid to pick up the phone because it might be a bill collector.

For 2016, we urge everyone to decide to be a more confident person as it relates to their financial status. We’d love to work with anyone who needs or wants our help in figuring things out, and of course when it comes to your taxes. Be strong, be courageous, and be knowledgeable; those are great things to aim for. Happy New Year!