Be aware that important tax consequences are often associated with some fairly common events involving your home. Here are some handy things to know. Home purchase. When purchasing a home, you may pay a portion of the mortgage interest in advance. This loan origination fee, or “points,” is a percentage of the total amount borrowed. If points are paid for…
Tax credits are one of the most powerful ways to lower your income taxes. A tax credit reduces your tax bill dollar for dollar. A tax deduction, on the other hand, only reduces your taxable income, so your benefit is determined by your tax bracket. For example, a tax deduction of $1,000 will lower your tax bill by $320 if…
When natural disasters occur, many people are often left with damaged or destroyed homes and businesses. Some lose everything they own. If you are affected by a disaster that is declared by the president to qualify for federal assistance, there are several provisions in the tax law that may provide relief: Extended tax deadline and interest abatement. The IRS is…
There’s no doubt you’ve seen an email touting a too-good-to-be-true offer in your inbox every now and then. Random pleas from mysterious people who need your help recovering inheritances they promise to share with you probably makes you shake your head and hit delete.But what do you do when an email says it’s from the IRS and claims you’re about…
Do you use a smart phone, tablet, or desktop computer to connect with friends and make purchases, as well as share health concerns with your doctor? If so, your privacy may be at risk. Companies called “data brokers” routinely compile information about your habits and preferences, including your favorite brands, recreational pursuits, and credit habits. Data brokers use this information…
Financial records are notorious for being messy. Bills, paycheck stubs, tax returns and bank statements have a way of getting tucked into random places. Luckily, there are a few pretty painless ways to organize your important documents. Put all your financial records in one dedicated spot To ensure that bills are paid on time, bank statements are reconciled and…
Everyone loves a free meal – especially employees. However, your business tax return will be affected differently depending on the circumstances of the mealtime experience. While you can generally deduct only half the cost of meals related to your business activities, the tax code includes specific exceptions that allow a deduction of 100 percent of what you spend on…
Employees often have too much of their employer’s company stock in their 401(k) or other retirement plan. That’s because employees tend to feel like they know their companies best. Here’s the problem: they may be overlooking the risks of having too much of an investment in any one company. Here are some of the risks of loading up on…
The U.S. Department of Labor updated the rules for paying overtime, and the changes take effect December 1, 2016. Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That’s double the annual exempt amount of $23,660 under current rules. Begin reviewing your payroll policies now to…
If you own a calendar-year corporation, you can benefit from planning moves you make before December 31. For example, corporations can accelerate or defer income or deductions to stay within a certain tax bracket. You’ll also want to look at your corporate alternative minimum tax exposure to determine whether you qualify for an exception to the tax. Finally, reviewing estimated…
Team Business Accounting Systems took part in The Light The Night Walk on Saturday, October 17th at Washington Lake Park, Sewell, NJ. The Light The Night Walk is a fundraising campaign benefiting The Leukemia & Lymphoma Society and their funding of research to find blood cancer cures. As a team, we raised $1400 to support this mission. Co-workers, friends,…
Is your cabinet overflowing? Do you hesitate to purge tax information because you’re not sure what to keep and what to discard? Here’s a quick guide to help you cut through the clutter. Expenses. Substantiation for deductions includes charitable donation acknowledgments, receipts for employee business expenses, and automobile mileage logs. Retain these at least seven years after you file the…
Business Accounting Systems, P.C. has been named to the 100 best in South Jersey Business List by South Jersey Biz Magazine, 2015. The specialty to which we have been named this time is Bookkeeping. In 2014, we were named to the list for our Payroll Services. We are proud and thankful for the nomination and win. Thank you…
Even if you don’t itemize deductions on your tax return, you may be entitled to certain “above-the-line” deductions. These deductions are subtracted from your income to arrive at your adjusted gross income, an important number because it determines your qualification for certain tax credits and various tax breaks. Above-the-line deductions include such things as IRA contributions, health savings account contributions,…
If your child has a summer job, consider opening an IRA for him or her. According to the tax rules, anyone under age 70 1/2 who has earned income can contribute to a traditional IRA. There’s no age restriction for Roth accounts, though the amount of the contribution phases out at higher income levels. The advantage of a Roth over…
Take time this summer to examine your investment portfolio for potential tax savings, such as selling stocks that are worth less than you paid to offset your capital gains. You might also donate appreciated stock that you have held for more than one year to charity and avoid capital gains altogether – plus getting a deduction for the stock’s fair…
How you classify your workers – as “independent contractors” or “employees” – matters a great deal to the IRS. The IRS is aware that employers prefer to treat workers as independent contractors to avoid paying fringe benefits and payroll taxes. The IRS estimates that 80% of workers who are classified as independent contractors are actually employees. About 100 new auditors…
Next year, taxpayers will get a few extra days to file their 2015 income tax returns. The District of Columbia will be observing Emancipation Day on April 15, 2016, the usual filing deadline. Because April 16 and 17 fall on a weekend, the 2016 filing deadline is moved to the next business day which is April 18. Taxpayers in Maine…
A new law, the “Don’t Tax Our Fallen Public Safety Heroes Act,” was signed on May 22, 2015, to clarify the tax treatment of federal and state benefits for public safety officers killed or injured in the line of duty. Under the law, such benefits will not be subject to federal income tax.
In a survey of small businesses conducted by the National Small Business Association, 59% of respondents said taxes were more of an administrative burden than a financial one. Most businesses put payroll taxes at the top of the list of taxes with the greatest administrative burden. Payroll taxes also outranked other taxes, such as income, property, and sales taxes, as…
In its final session of the year, Congress extended a long list of tax breaks that had expired, retroactive to the beginning of 2014. But the reprieve is only temporary. The extensions granted in the Tax Increase Prevention Act of 2014 remain in effect through December 31, 2014. For these tax breaks to survive beyond that point, they must be…
YEAR-END TAX STRATEGIES FOR BUSINESSES Gift shares of stock to family members who are in a low tax bracket before declaring a dividend, as part of a larger plan to shift ownership of the business to younger family members. The owners of pass-through entities, such as S corporations and partnerships, have the income taxed on their personal tax returns. The…
It is important to be aware of pop-ups or emails ‘phishing’ for personal information. They are transmitted electronically and done so very easily. You may even receive a text, SMS message or a personal message through social media platforms. These false requests are daily occurrences and are sent in hopes to lure innocent victims into disclosing personal and/or financial information.…