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The Time After The Most Wonderful Time of The Year

It’s that time again, folks: time to prepare for tax season! Before too many days of 2016 pass you by, follow the steps below to have the best, most stress-free, and punctual tax season yet!

Set Aside:

As you get documents in the mail over the next few weeks, you should create a place for them to collect before you send them in to your CPA. Make it a place that is easy to access but out of the way, so the documents won’t be bothered. Remember to scan these or hand them in to us before February 15th for corporate returns and March 15th for personal returns. Here are some things you should keep an eye out for.

  • W-2s
  • 1099s
  • End of year loan statements
  • 1098s
  • W-3s
  • End of year statements from bank, especially with amount of money earned on savings accounts for the year
  • Health insurance statements: don’t forget that legislation is changing all the time on this. Tax returns and bookkeeping are taking up more time to compensate for the new policies. You’re trying to figure this out and we’re here to help. We need to know how you received insurance, how much, by whom, which family members, and what dates, at least. Send us your insurance premiums, whether paid out of pocket, reported on your W-2, or paid from your company– the more information we have, the better.
  • And more! If it looks important, it’s better to send it to us than not!

 

Write Down:

Before you forget, write down or gather together this important information that Sweeten CPA will need to complete your return:

  • Total mileage for 2015!maxresdefault.jpg
  • Business mileage
  • Business expenditures from personal accounts
  • And more! If you have any questions, shoot us an email

 

Happy Tax Season and we’ll see you soon!

 

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Hot off the Press: Texas Franchise Taxes Reduced!!

In a push to create new jobs and business incentives, Governor Greg Abbott just signed House Bill 32, a proposal lifting tax burdens on businesses. Born in March, the bill was approved by the House April 29th, approved in the Senate a month later on May 24th, and finally signed by the governor this week on June 15th. The bill was signed at Advanced Micro Designs, one of the top ten franchise tax payers in Austin, TX, as a sign that Texas rewards businesses for simply being Texan.

The bill includes a 25-percent, across-the-board cut in business-franchise tax rates. It also increases the revenue threshold for businesses who choose to be E-Z filers to $20 million, from $10 million. The E-Z filers’ tax rate declines to 0.331 percent of receipts, from 0.575 percent. The bill is expected to cost the state $2.56 billion over the next two years.

Another tax break introduced in the bill is the elimination of licensing fees for approximately 600,000 professionals. Even the average taxpayer will be impacted by this bill, as homeowners are expected to save about $125 per year just in property taxes. Big businesses are encouraged to put down roots in Texas with this bill– Abbott’s people are talking to GE’s people– but Abbott clearly had small businesses in mind too: “Overregulation is costly at any level, especially to small businesses.”

Here at Sweeten CPA, Michele was firmly in favor of the franchise tax cut.  “That rate reduction will affect about 20% of my clients, who are currently subject to the franchise tax.  Many of my small business clients are already beneath the threshold for the tax, and file a No Tax Due Return annually.  But for those successful and growing firms who are over the $1,000,000 threshold for paying the Texas Franchise Tax, the 25% savings will be truly felt!”

[Find more about his speech summed up by the Texas Tribune here.]

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Tax Break Extensions for 2014 Returns

At the end of 2014, the Senate approved HR 5771, or The Tax Increase Prevention Act of 2014, which passed by a landslide in the House early last month on December 3rd. This bill extended expiring tax provisions from the end of 2013 and 2014 for individuals and businesses whom Sweeten CPA service, so we wanted to keep our clients informed about what this means, specifically about which provisions are being extended:

  • The threshold under Section 179 has been increased to its previous threshold of $500,000, from its diminished threshold of $25,000, allowing for the expensing of qualified asset purchases rather than the spreading out of those expenses over time through regular depreciation.
  • Energy efficient renovations to your home, like more effective doors and windows for your home, are back under the previous rules with a 10% credit of the cost of the improvements, with a lifetime limit of $500.
  • Energy efficient renovations to commercial property, like replacing existing energy systems with high efficiency systems, are back under the previous rules with a possible deduction of up to $1.80 per square foot.
  • Other improvements, made to leased buildings, restaurant property, and retail establishments, are also back under the previous depreciation rule involving a 15 year straight-line depreciation method.
  • For seniors, seventy and a half years or older, 2014 distributions from your IRA to charity are tax-free.
  • Teachers can again claim above-the-line deductions of up to $250 for books and materials used in the classroom purchased out-of-pocket.
  • Tuition-payers can again claim above-the-line deductions of up to $4,000 for higher education expenses.
  •  Cost of new property purchased or used in 2014 can be expensed by 50%, using the Special Depreciation rule.

Enjoy these extensions and if you’re confused, don’t worry: Sweeten CPA can manage these changes in your tax return this year!

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The Affordable Care Act and your 2014 taxes, Part II

The Premium Tax Credit (a.k.a. government assistance in paying for your government health insurance premiums based on financial need)

Beginning in the 2014 tax year, the Affordable Care Act enacted the Premium Tax Credit. It is designed to assist individuals and families with low to moderate income afford health insurance through the Health Insurance Marketplace (government sponsored exchanges). Continue reading “The Affordable Care Act and your 2014 taxes, Part II”

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The Affordable Care Act and your 2014 taxes, Part I

 The Individual Shared Responsibility Provision and Payment (a.k.a. have health insurance or pay a fine)

With the Affordable Care Act (ACA), all individuals—including children—are required to have minimal essential monthly health insurance coverage for him/herself as well as all dependents for whom he/she is financially responsible. Here are some Q’s and A’s to help you understand. Continue reading “The Affordable Care Act and your 2014 taxes, Part I”

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Stay-at-home parent? You need retirement savings, too!

stay-at-home-momThere are over 5 million stay-at-home parents in the United States.  We give these individuals snaps for forgoing earnings (at least for a time) to make sacrifices that are important to them! However, these people are not exempt from aging, and therefore need to be concerned about a retirement nest egg.

Are you a stay at home parent? Have you thought about saving the money you will need for your retirement? Be careful not to assume your partner has it all taken care of–he/she may not! Here are some practical ways to save, suited specifically for your unique situation. Continue reading “Stay-at-home parent? You need retirement savings, too!”

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"I'm self employed. How do I get health insurance with the new health care laws?"

(insurance_help_deskTake a second to laugh heartily at the picture and then let’s get to business.)

The health insurance world has been turned on its head courtesy of the Affordable Care Act, and reality has yet to settle in. But in the mean time I have felt anxious for all our self-employed friends, and I dedicate this blog post to you. May it be of help to you in your quest to find health insurance, now a legal requirement. Continue reading “"I'm self employed. How do I get health insurance with the new health care laws?"”

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On January 1, 2013, in a galaxy not so far away: the 2013 Medicare Tax Increase

I have one good guess as to why George Lucas sold Lucasfilm along with the prodigious Star Wars franchise to Disney in 2012 instead of 2013. It’s called Medicare Hospital Insurance, slated to begin in January 1, 2013. What is that, you ask? Exactly.

Conceived to help pay for the new  Patient Protection and Affordable Care Act, or “Obamacare”, this Medicare Hospital Insurance provision is nothing more than a new tax with a fancy name. The tax is levied on individuals making more than $200,000 or married couples making more than $250,000, as well as anyone with unearned income (that could include you). Continue reading “On January 1, 2013, in a galaxy not so far away: the 2013 Medicare Tax Increase”

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Money and Politics: Sound intelligent, Be intelligent with knowledge of these terms

It’s election time! Keep up with all the lively (and sometimes heated) political discussions with your sound knowledge and correct usage of these frequently used political/financial terms.

Continue reading “Money and Politics: Sound intelligent, Be intelligent with knowledge of these terms”

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Plain-speak: Understanding the New Health Care Law (Affordable Care Act)

Everyone is saying it.  The new health care law, or the Affordable Care Act, will impact everyone.  Naturally we are all anywhere from curious to compelled to find out how it will play into our individual lives.  But the law is about 2000 pages long and in legal jargon, no less!  So how are we, the average person whom it will reportedly affect, supposed to understand it?!

Luckily for you, I have researched and befuddled through it already. Below I will give a plain-speak, as simple as possible explanation of the act and its tax consequences to you, the average Joe and Jane.  But as you read, keep in mind the following:

Continue reading “Plain-speak: Understanding the New Health Care Law (Affordable Care Act)”