The “Tax Holiday” is over! Well we did not perish as we slid over the fiscal cliff, but there are certain tax consequences that we should be aware of for the 2013 year. I want to talk about two things that affect business owners in order for you to plan more easily during the year. The first thing that occurs immediately is that Social Security withholding on all earned income will increase by 2%. This restores the total employee portion of FICA withholding to 7.5%, the same as it was 2 years ago before the “holiday”. For wage earners this will happen with the first paycheck in January. Self- employed people must increase your estimated tax payments by this same additional 2% of net earnings in order to assure that enough money is set aside to pay for the Social Security portion of your 2013 taxes. A good rule of thumb is simply to put 10-15% of every income payment aside in a “tax” account, so that you can be sure of having enough to fund your quarterly estimated tax payments. Continue reading
One of the things that I love most about Buffalo is the generosity of my neighbors. Although the WNY area is considered to have one of the lowest incomes in the nation, the people of Buffalo and its environs are on the top of the list when it comes to generosity.
I would like to help you get some credit for the donations that you often make without thinking of your own benefit. How often do you give gifts of used clothing, furniture small appliances and toys to the Goodwill, Salvation Army, Veterans and other such worthy organizations to help make life easier for those who don’t have enough? In order to take full advantage of the tax code to get a tax break for yourself, you must itemize on your tax return (file schedule A) and you must ITEMIZE your donations. Here are two links to valuation guides to help you put a value on each item that you give away.
Before you throw that bag into the donation bin, take it to your church, or leave it on the front porch for pick up, take a few minutes to write down what you are giving away and use these guides to assign a fair value to each. Attach this to your receipt from the organization and save it in your “current tax year” file. Next tax season you will be amazed at how generous you have been and what a difference it will make on your tax return.
If you made your home more energy efficient in 2011, you may be eligible for a non-refundable personal tax credit. Improvements such as insulation, energy exterior doors and windows, water heaters, furnaces and air conditioners can be worth up to $500, of which only $200 may be used for Continue reading
Did you make charitable contributions to a qualified organization in 2011?? Doing so may help lower your tax bill. Here are some tips to help ensure your contributions pay off on your tax return. Continue reading this post below →
Protect Your Personal Information: The IRS does NOT initiate taxpayer communications through Email.
Generally, the IRS does not send unsolicited e-mails to taxpayers. Further, the IRS does not discuss tax account information with taxpayers via e-mail or use e-mail to solicit sensitive financial and personal information from taxpayers. The IRS does not request financial account security information, such as PIN numbers, from taxpayers.
Most of the scams that impersonate the IRS are identity theft scams. Typically, a consumer will receive an e-mail that claims to come from the IRS or Treasury Department. The message will contain an enticing or intimidating subject line, such as tax refund, inherited funds or IRS notice. Find out more about IRS-impersonation phishing scams and how to recognize and report them to the IRS.