Three Money Moves to Beat Back Higher Taxes
For many taxpayers, the full brunt of this year’s tax changes may not feel real until next year’s filing season — when it’s too late to cushion the hit. Some of the tax hikes rolled out this year, such as the expiration of the payroll tax cut, caused an immediate blow to wallets and could not be avoided. But taxpayers can make moves now to minimize the impact of some of the other tax changes, including a new top tax bracket and higher taxes on investment income. | Read More
• File a Report of Foreign Bank and Financial Accounts (FBAR) – Forms are due June 30th
• Second Quarter Tax Estimates are due on June 15th
Does Your 2013 Withholding Need Adjusting?
If you have a sizable refund from your 2012 taxes, it may be time for you to check your withholding. After all, when you overpay your taxes, you are making an interest-free loan to the government.
Reducing your withholding is as simple a filing out a new W-4 with your employer. The form comes with a worksheet to figure out how many allowances you should claim. Do not forget to allow for other taxable income besides wages, such as dividends and gains on investments. If you are concerned about underpaying your taxes and exposing yourself to penalties, there are a few rules you should know. Generally, you will not face a penalty if you pay for 2013, through withholding or quarterly estimated tax payments, at least 100% of your 2012 taxes. The rate jumps to 110% for individuals with an adjusted gross income of $150,000 or more. You may also pay at least 90% of what you will owe for 2013.
Don't Be Surprised at Year End
You should be aware, that starting in 2013, high income tax payers will pay 3.8% surtax on unearned income including interest, dividends, royalties, rents and capital gains, as part of the healthcare reform law. The tax will affect taxpayers with modified AGI of $200,000 if they are single, or $250,000 for married joint filers. In addition, also starting in 2013, taxpayers will pay an additional 0.9% medicare tax on income from wages & self-employment income.
• Scott Sanders was installed as President of the NYSSCPA Nassau Chapter at the Crest Hollow Country Club on May 9th. Click here to see a slide show of pictures from the event.
• Elliot Lavietes, our Tax Director, volunteered at Bellmore Knights of Columbus' "Hurricane Sandy Relief and Resource Fair" for an all-day event providing counseling, government assistance, and legal and accounting advice on May 23rd.
Click on one of the following for additional updated information:
• 2013 Tax Law Summary
• Client Line April 2013 Newsletter
• Tax Report March 2013 Newsletter
To learn more about Sanders Thaler Viola Katz, LLP, visit www.st-cpas.com.