TAX SEASON 2013

ERock Photo Tax Season 2013 1.21.2013Well folks it’s that time of year again:  TAX TIME.  I know you are all so excited about this, but let’s face it, we have to do this every year, right?  It is always best to stay organized when planning for your taxes.  Even if you do not open up all the envelopes that arrive it’s ok.  You can simply get a large 10 x 13 envelope and put all your tax documents in it when they come in.  When you are ready we will review all your pertinent forms, get your 2012 returns filed, and start planning for 2013 and beyond!

 

You see taxes are not about just filling in the forms and forgetting about it.  We pay so much in federal taxes, state taxes, fica taxes, sales taxes, and healthcare taxes.  The planning process is often overlooked but it really is the most important part of the tax filing process, especially if you are self employed and/or pay estimated taxes.  If you plan correctly, you won’t get a huge refund or you won’t owe too much unexpected money come tax payment time.

Please reach out anytime as the tax season progresses.  Do not let financial and tax issues bog you down or stress you out.  Get the answers you need in a timely fashion.  You will be glad you did!

 

With more than 23 years of experience as a credentialed tax professional, Stu Steinberg, CPA, MBA brings a broad depth of knowledge to his work. He has worked with families and small business entrepreneurs for many years helping them plan more effectively. He can be reached at stu@erocktax.com or (781) 247-5569 anytime

What does the recent tax legislation mean to you?

ERock Photo - tax update fiscal cliff 1.7.2012

At the last minute Congress passed a new law that will affect most of us.  Below I outline a few of the changes.

1)      Your payroll taxes are going back up to where they were before the last 2 years.  Total payroll taxes = 15.3%, with 7.65% paid by the employer and 7.65% paid by the employee.  The 7.65% is broken down into social security portion of 6.2% and Medicare of 1.45%.  It is the 6.2% portion for the employee that was lowered to 4.2% for 2 years, and that is going back up to 6.2% for 2013.  The 6.2% maxes out at $113,700 for 2013, so for a taxpayer making more than $113,700 that equates to an additional tax of $2,274 for 2013, and if you make $50,000 that means you will pay $1,000 more.

2)      Who is paying higher income taxes?  Well, if you are single and make more than $400,000 or married and make more than $450,000, than your top tax rate is going up from 35% to 39.6%.  President Obama campaigned for 2 years on a plan to raise taxes on individuals making more than $200,000 and married couples more than $250,000.  So we knew something had to give here.  All other tax rates have no change.

3)      How about taxes on investment income, capital gains and dividends?  If you are in the $400,000 or $450,000 income bracket your rate on this unearned income will rise from 15% to 20%.  All others will stay at 15%, except those in the lowest 2 tax brackets who will pay 0%!  High earners should also be aware of the 3.8% health care tax on unearned income that starts in 2013 as part of President Obama’s Affordable Care Act.

4)      Very important tax breaks for families will be extended for 5 years.  This includes the Child tax credit, the earned income tax credit that was originally set up by President Reagan in the 1980s, and the American Opportunity Tax Credit of up to $2,500 a year for 4 years for low income families.

5)      If you have ever been subject to the AMT tax, you know how painful that can be.  Well, many middle income taxpayers will be protected going forward from this tax as it will now be adjusted for inflation.  It was never adjusted previously, and every year seemed to hit wage earners who made less money.  We should see some protection here.

 

There are many other updates and of course the rules keep changing all the time so it is always best to seek competent advice when determining your specific situation.

Listen as Win Damon and I review these changes on WNBP Radio 106.1 FM and wnbp.com


With more than 23 years of experience as a credentialed tax professional, Stu Steinberg, CPA, MBA brings a broad depth of knowledge to his work. He has worked with families and small business entrepreneurs for many years helping them plan more effectively. He can be reached at stu@erocktax.com or (781) 247-5569 anytime.

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