Income Tax Considerations And Changes

Politicians across the country debate about ways to fund worthwhile programs, and the new mayor of New York City has received considerable attention regarding his proposed agenda. Mayor de Blasio has outlined a progressive agenda aimed at funding afterschool and early education programs, and his approach pushes for higher tax rates for wealthy individuals. You may have a lot of tax questions regardless of your income level, but using Turbo Tax 2013 may help you make sense of current and future tax scenarios.

Bill de Blasio
Bill de Blasio (Photo credit: Kevdiaphoto)

Mayor de Blasio would like to impose a tax increase on residents who report an excess of $500,000 in taxable income, and he wants this tax increase to be in effect for five years. Taxes 2013 and beyond may be affected by such a measure, and the rate would move from 3.88% to 4.41% under the de Blasio proposal. New York city resident tax rates have been as high as 4.46% under previous administrations, and the additional funds were intended for education and crime prevention.

A little over one percent of New York city residents would be affected, and the additional tax revenue raised would be approximately $500 million annually. This is in line with the goal of establishing continuous funding for education programs, and having this additional revenue may give Mayor de Blasio time to establish other funding sources once the higher tax rate has expired. Any discussion about proposed tax rate changes can lead to numerous questions, but Turbo Tax 2013 may help you find good ways to save at tax time.

Why Use a Tax Accountant?

If you’ve ever tried to do your own taxes by hand, you know just how difficult it can be. If you’re not well-versed with IRS tax codes, you can really be sure that you are getting the maximum amount of deductions and credits that you are entitled to. If you are unsure of how to do a tax return or how to engage in tax planning, hiring a qualified tax accountant could be in your best interests.

Tax Planning

Hiring a tax accountant can provide you with the help you need in planning out your taxes. While most people simply go about their business and then file a tax return at the end of the year, others are proactive about saving money on taxes. By taking certain steps throughout the year, you can lower your taxable income and the amount of taxes that you have to pay. If you are running a business, there are a number of deductions that you can take that others are not entitled to. For example, you can deduct any supplies or equipment that you buy from your taxable income. A qualified tax accountant will be able to look at your business situation and determine what areas you could save money in.

Filing Returns

In addition to planning out your tax saving strategies, and accountant can also help you file your tax return. At the end of the year, the Internal Revenue Service expects you to file a tax return and report all of your income and expenses. This process can be very confusing if you do not have any experience with it. An accountant will be able to take your financial records and come up with the necessary information for your tax return.

If you have a business and a personal tax return to handle, separating the two can be difficult. A good tax accountant can help you file both tax returns and make sure that each area of your financial life is divided appropriately.

Avoiding Audit

If you do not complete your tax return correctly you were you leave something out, the Internal Revenue Service may audit your return. When an audit occurs, the IRS may disallow certain deductions or credits that you claim if they are not legitimate. A qualified accountant will be able to look at your return and see if anything looks out of the ordinary. Certain items are more likely to trigger audits by the IRS. A good accountant will be able to see if your return looks like it might be selected for audit or if it is fine.

If you’ve ever tried to do your own taxes by hand, you know just how difficult it can be. If you’re not well-versed with IRS tax codes, you can really be sure that you are getting the maximum amount of deductions and credits that you are entitled to. If you are unsure of how to do a tax return or how to engage in tax planning, hiring a qualified tax accountant could be in your best interests.

Tax Planning

Hiring a tax accountant can provide you with the help you need in planning out your taxes. While most people simply go about their business and then file a tax return at the end of the year, others are proactive about saving money on taxes. By taking certain steps throughout the year, you can lower your taxable income and the amount of taxes that you have to pay. If you are running a business, there are a number of deductions that you can take that others are not entitled to. For example, you can deduct any supplies or equipment that you buy from your taxable income. A qualified tax accountant will be able to look at your business situation and determine what areas you could save money in.

Filing Returns

In addition to planning out your tax saving strategies, and accountant can also help you file your tax return. At the end of the year, the Internal Revenue Service expects you to file a tax return and report all of your income and expenses. This process can be very confusing if you do not have any experience with it. An accountant will be able to take your financial records and come up with the necessary information for your tax return.

If you have a business and a personal tax return to handle, separating the two can be difficult. A good tax accountant can help you file both tax returns and make sure that each area of your financial life is divided appropriately.

Avoiding Audit

If you do not complete your tax return correctly you were you leave something out, the Internal Revenue Service may audit your return. When an audit occurs, the IRS may disallow certain deductions or credits that you claim if they are not legitimate. A qualified accountant will be able to look at your return and see if anything looks out of the ordinary. Certain items are more likely to trigger audits by the IRS. A good accountant will be able to see if your return looks like it might be selected for audit or if it is fine.

Considerations

If you are interested in hiring an accountant to handle your taxes, make sure that you do your homework first. You have to put a lot of faith in an accountant and you do not want to simply hire anyone. Get some referrals and find out how long the accountant has been in business. If you find a good accountant, it can make your life a lot easier overall.

If you are interested in hiring an accountant to handle your taxes, make sure that you do your homework first. You have to put a lot of faith in an accountant and you do not want to simply hire anyone. Get some referrals and find out how long the accountant has been in business. If you find a good accountant, it can make your life a lot easier overall.

This article was written by the tax accounting experts at Tax Resolution Centre.  http://www.taxresolutioncentre.ca/

Did You Know About These Tax Changes?

By the start of 2010, President Obama proposed a number of tax changes for 2011. It was until the end of that year that eleventh hour tax changes were approved and signed into the law. While many of us are well aware of the latest celebrity break ups and hook-ups, only a few seem to know about these tax changes.

It pays to known about tax rates and any changes made regarding these taxes. It gives you a better idea of what you are going pay and how much you can save. Believe it or not, knowing about the tax rates and changes can greatly help in efficient financial planning.

In the 2011 bill, a few changes are made, a few things remain unchanged and a few temporary ones will expire in 2012. For better or for worse, these changes will affect individuals and businesses in one way or another. Let’s take a look at what these changes are.

– The lowest bracket remains 10%, this is a temporary extension till 2012. Otherwise it would have gone up to 15%. 25%, 28%, 33% and 35 % tax bracket for individuals is also temporarily extended. The current law related to these tax brackets was going to expire in 2011. If it wasn’t extended the current brackets would have gone up to 28%, 31%, 36% and 39% respectively.

    – Standard deduction rates remain largely the same. For a single taxpayer, the amount of deductions is $ 5,800. For married couple filing jointly, it is $11,600. Senior citizens will get an additional standard deduction of $ 1,150.

    – The personal exemption amount for last year was $3,650 and this year it is raised to $3,700.

    – Extensions are also made on deduction of state and local sales tax and deduction of private mortgage insurance premiums. Through 2011, state and local sales tax can be deducted instead of state and local income tax. Mortgage insurance premiums will also continue to be deducted by homeowners.

    – The Alternate Minimum Tax exemption for 2011 is $48,450 for single tax payers and $74,450 for those filling jointly. Married couple filing separately will have to pay $37,225.

    – 2011 tax changes also include a temporary repeal on Personal Exemption phase-out. This will be a good news for high-income tax payers. Personal exemptions of high-income tax payer will be reduced to adjusted gross income increases.

      – Pease limitations are also temporarily repealed. According to Pease provisions, itemized deduction is reduced by 3% at the top of the brackets for high-income tax payers.

        – Capital gains and dividends will also remain low through out the year.

          – Under the temporary tax cut on Employee payroll tax, the percentage is reduced to 4.2% from 6.2 in 2010. The rate for self employed individuals is reduced from 12.4% to 10.4%.

          – For teachers a $250 deduction is also introduced as a deduction for states sales taxes in lieu of state income tax deductions.

          This is a guest post from Albert Harris, contributing writer at CreditDonkey.com.  Avoid other costly mistakes in 2011 by reading our credit card tips.