Ask an Accountant

Ask an Accountant

I haven’t received my W-2 yet, what should I do?

Thursday, February 04, 2016
W-2 forms should be mailed out by the end of January. If you don’t have it by mid-February, you should get in touch with your employer to make sure that it was mailed. If you can’t get a copy from them, contact the IRS after February 23.

Questions about Capital Gains?

Friday, December 18, 2015
  • The tax rate on net capital gains is a sliding scale from zero to 20 percent depending on the taxpayers’ income level. For most taxpayers, the tax rate on capital gains (and qualified dividends) is no higher than 15 percent. 
  • Beware of the wash sale rules: buying and selling the same, or substantially same, stock within 30 days results in disallowed losses.
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Are You a High Earner?

Monday, December 14, 2015
  • If your income is six figures or more, you should anticipate possible liability for the 3.8 percent net investment income (NII) tax calculated on net investment income in excess of your modified adjusted gross income (MAGI). Threshold MAGIs for the NII tax are $250,000 in the case of joint returns or a surviving spouse, $125,000 for a married taxpayer filing a separate return, and $200,000 in any other case. 
  • Keeping income below the thresholds is worth exploring and planning for the NII tax requires a very personalized strategy.
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Things to keep in mind as 2015 comes to a close.

Friday, December 11, 2015
  • Did you get married or divorced? 
  • Have a child? 
  • Buy a home? 
  • Change jobs or retire? 
  • Additionally, try to predict any life events in 2016 that might trigger significant income or losses, as well as a change in your filing status.
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Be on the Lookout:

Tuesday, December 08, 2015
  1. Revisions to the Affordable Care Act.
  2. Not renewing the ability of taxpayers to exclude cancellation of debt on their personal residence from ordinary income.  Currently, the maximum amount of debt cancellation (on a personal residence) exclusion is $2 million on a qualified principal residence.
  3. Hope and Lifetime Learning Credits are set to expire.
  4. Teachers (primary and secondary levels) will no longer be able to deduct $250 for classroom expenses.
  5.  See More

What are some important things to consider when starting a new business?

Wednesday, August 19, 2015

Are you starting a new business? Congratulations!

Here are 5 tips to help you get off to a good start:

The success of a new business venture certainly depends on have a marketable product and the ability to create a demand for that product.  However, not knowing what your tax responsibilities are can sink even the best ideas.  See More

I don’t have enough deductions to itemize, how can I save money on my taxes?

Tuesday, June 30, 2015
It has often been said by accountants and tax professionals that the short answer to any tax question is “It Depends” and that is certainly true with the above question.  Tax planning is not a one size fits all approach.  No matter who you are--just starting out, kids still at home, an empty nester or retiree--tax planning should be done with a tax professional who understands your individual situation and goals as well as the intricacies of the most current tax laws and how those laws can best be applied to save you money.  Consult a CPA today to determine the best tax strategy for you.

If I pay my employees on January 2, 20X2 for the work week ended December 31, 20X1 can I deduct those wages and related taxes in year 20X1?

Monday, June 29, 2015
No.  Payroll is strictly calendar year and date based.  In the above example, the earnings would not be included in expenses for calendar year 20X1 NOR would the earnings be included in the employees’ W-2 statement for year 20X1.

What is the difference between a cash basis taxpayer and an accrual based taxpayer?

Friday, June 26, 2015
A cash basis taxpayer only reports income or expenses that he or she has actually received or paid out as opposed to an accrual based taxpayer which reports sales on account (sales made but money not collected for) and accounts payable (expenses incurred but not paid).

If I receive a check for a sale on December 29, 20X1 and wait to deposit it until January 3, 20X2 then I do not have to declare the income until I file my taxes for year 20X2, right?

Thursday, June 25, 2015
Wrong.  IRS considers this constructive receipt of the income and requires that those funds be included as part of the income for 201X.