Archives for April 2012

Need More in Your Weekly Paycheck? Tax Planning Can Help You

Need More in Your Weekly Paycheck? Tax Planning Can Help YouTax time is among the most stressful times of year for most taxpayers. There is paperwork that you must fill out, calculations to complete and forms to submit to the Internal Revenue Service. Although you may feel a wave of relief when you file your return, it is not necessarily over yet. There are tax planning steps you should take after you file your taxes to prepare for next year.

Scan copies of your return and the attached documents. Save them on an external drive for later reference. File the hard copies in a fireproof safe. The Internal Revenue Service recommends that you keep copies of your tax returns for at least three years after filing. It is best to keep them for seven years in case of an audit.

If you are receiving a refund, you can adjust your tax withholding to reduce the amount withheld from your paychecks, putting more money in your pocket throughout the year. Ask your employer for an updated W-9 form to revise your tax withholding status. For the most accurate adjustments to your withholding, some calculations are necessary. With a few minutes time, you can adjust your tax withholding to put more money into your household.

Identify the standard deduction for your filing status based on the current year’s tax forms from the Internal Revenue Service. Calculate the exemptions you will claim. For example, if you are married and filing joint with two children, your exemptions would equal four. The exemption amount is $3,700, so your total exemption equals $14,800. 

Determine your total deduction, which is the sum of the standard deduction and your exemptions. Assume your standard deduction based on your filing status equals $11,900. Your total deduction equals $26,700. Divide that by the amount you save with each exemption. The calculation would appear as 26,700/3,700. With a result of 7.21, you should adjust your W-4 to reflect seven exemptions. 

This process will give you more control over your earnings, allowing you to invest throughout the year instead of letting the IRS earn interest on your hard-earned money until after you file your taxes. A tax planning specialist can help you determine the right withholding for your financial situation.

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Now that April 15 has passed, what kind of tax advice do you need?

Tax preparation and planning from a friendly advisor can save you from problems down the road. Some do not file a tax return because they are afraid of not being able to pay the IRS. Often, people treat the government as a threat instead of leverage. The IRS wants the American Citizen to let them know if they are having a difficult time with their money. If someone does not file a return, it could mean heavy fines once an audit is completed. 

Do you need an extension to file a return? Request one from the IRS. Your CPA can assist you with the extension if needed. This will give you the time to possibly research your options. Also, it will be beneficial to you by allowing the ability of filing when it will be impossible prior to the deadline. Money is often a problem and the IRS is aware of this. The extension can provide the ability to earn extra money to pay Uncle Sam.

What about those deductions that can be taken? People often get into trouble because of their lack of understanding. If aunt sue wanted to say that you can take something off your taxes, do not argue with Aunt Sue. Use a little wisdom and check the information before beginning process a claim. Keep receipts to on anything that may be of interest. There are several legitimate things that can be deducted. A person does not have to take deductions that are not part of those things that can be claimed. 

Your tax advisor can assist you with any answers to questions that you may have regarding taxes. Consulting services and risk management advice cab be handy by someone you can trust. Stay ahead of the game by knowing what has to be done and practices to adopt. It is expensive running a business regardless of the size. However, regular updates to your business operation can provide the information necessary to assist with staying out of the red with the IRS. Folks across Watertown, New York and the surrounding area know they have dependable customer service that is second to none in the region.

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Why You Should Consider Having Your Taxes Professionally Prepared

The Internal Revenue Service (IRS) is known for its unwavering regulations and requirements. Every taxpayer is expected to follow the tax codes set forth by the agency, filing tax returns every year by the federal deadline. Although there are options for extensions when necessary, the IRS must receive your tax payments on time.

Not only are you required to file your return on time every year, you have to make sure that your tax documents are accurate. With tax law changes every year and some grey areas of interpretation, it can be an intimidating process for anyone. You can help ensure that your return is accurate by consulting a tax preparation specialist.

You can also simplify the process by working with an accounting firm to help you manage your money. A CPA, or Certified Public Accountant, can help you keep track of your incoming funds, tax withholdings and expenses. Accurate records, receipts and transaction details can help you organize the necessary details in the event of an audit.

Tax professionals are up to date on the current tax laws. They specialize in understanding what expenses can be deducted, what tax rebates and credits you may qualify for and the documentation needed to support those claims. When you want to be sure you are getting as much as possible from your refund, CPAs can help you create your tax return professionally with their expertise.

Before you commit to a CPA or accounting firm, be sure that you understand the expectations for representation and support in the event of an audit. Some firms will provide you with support and accompany you to an audit while others will just provide you with the documentation that you need. 

Most tax processing firms, including those in Watertown, NY, offer packages to review your prior year returns at a discounted rate or for free. If you find a firm that helps you get the most from your current return, inquire about reviewing your previous year’s return for accuracy. You may be able to file an amended return for additional money you never knew was there. Schedule a meeting with the CPAs at a Crowley & Halloran CPAs and provide the documentation that supports your income for the tax year as well as receipts and supporting information for deductions and credits.

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Information From the NYS Tax Department – MTA Payroll Tax Reductions and Eliminations

Beginning April 1, 2012, the Metropolitan Commuter Transportation Mobility Tax (MCTMT, also known as the “MTA payroll tax”) is eliminated for most businesses and all elementary and secondary schools. The tax was eliminiated for most self-employed persons beginning January 1, 2012.

The change is the result of legislation signed into law by Governor Andrew M. Cuomo.

As a result of the new law, 289,000 small businesses, 414,000 self-employed taxpayers and 6,000 other businesses will see either a reduction or complete elimination of the MCTMT. All public and private elementary and secondary schools are exempt from the tax under the new law.

The tax is completely eliminated for self-employed persons with annual net earnings of $50,000 or less and for businesses whose quarterly payroll expense is $312,500 or less.

The total savings to taxpayers is expected to be $250 million this year alone.

The MCTMT tax was established by legislation in 2009. Certain employers and self-employed individuals are required to pay the tax if they are engaged in business in New York City or in Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk or Westchester counties.

Additionally, individual taxpayers’ first quarter estimated tax payments under new, lower tax rates are due by the April 17th 2012 deadline. Your income tax rate will be lower than last year if your taxable income is more than $40,000 for a married couple filing jointly, $30,000 for a head of household or $20,000 for single filers.

For example, the tax rate for a married couple filing jointly with taxable income between $40,001 and $150,000 is now reduced from 6.85% to 6.45%.

These income tax rates were signed into law in December by Governor Andrew M. Cuomo and represent the lowest tax rates for middle-income New Yorkers in 58 years.

For more information:

http://www.tax.ny.gov/bus/mctmt/mctmt_changes.htm

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