Tax Tips that Might Surprise You

Doing your taxes is one of the most important things that you can do in terms of finance throughout the year. AS a result, it pays to be careful when it comes to doing your filing and in terms of finding every way to reduce what you owe as possible. You may be able to find many extra tips in places like your favorite accounting blog, or with a accounting firm, but here are a few to get you started.

Pay Attention to Timing

It might seem strange, but looking carefully at the calendar will increase your chances of getting the best tax return. For example, you can pay the mortgage before the end of the year and the added interest will reduce your liability even more than what would happen otherwise. You can also schedule treatments and exams that are related to your health towards the end of the year so that you can get a much bigger deduction for medical expenses.

Check for Tax Credits

It turns out that 20 percent of eligible Americans don’t take tax credits that they could take, such as the Earned income tax credit. A lot of people might just think that they’re not eligible and disregard it. But even if you’re single and don’t have any children, as long as you worked this year you can be eligible for the credit. Your taxes go down on a straight one to one basis when it comes to credits, so this often makes them much better than deductions when it comes down to a dollar to dollar basis. As a result, you end up with a much lower amount of money that you owe.

Use Programs to Help

One great way to make sure that you don’t miss out on many possible deductions or credits is to try out a program like TurboTax. It’s usually not that expensive and it will make sure that you’re completely covered in terms of what you could possibly get off for a particular year. They will list all of the changes from year to year, and take you through each part of the filing step by step so that you don’t miss anything and so that everything is in order at the end of the day. This is a good way to be sure that you’re doing the best possible job.

Even in Gifts and Deaths, Taxes Apply

If you live in the United States, you already know the truth behind the modern-day adage that the only certain things in life are debts, taxes and death. It’s a fact of life that the best Rochester accounting firm - Rizzo, DiGiacco, Hern&Baniewicz are well aware of because of their dealings with clients involved in these things.

One of the trickier matters that accountants must deal with as part of their job is combining taxes and death. Combining two of the inevitabilities of life results in debts that the concerned individual must pay in full lest the taxman cometh and enforces the law’s long arm into your affairs.

Here then are a few must-know things in relation to death and taxes as well as the debts that arise from their combination. Ask for the professional opinion of a reliable Rochester accounting professional in case a few things require clarifications.

One Combo Tax

The good news for would-be heirs and gift-givers: Most estates will not be required to pay for federal estate or gift tax. Why? Because you can leave or give away considerable amounts of property on a tax-free basis!

Under the present laws covering the unified gift and estate tax, individuals can give away to their recipients or leave to their heirs up to $5.25 million in cash and non-cash assets before paying for applicable taxes.

The bottom line: You can stop worrying about the unified gift and estate tax when you fall under the non-wealthy (i.e., multimillionaire and billionaire) set. You are, nonetheless, well-advised to ask for the professional advice of a reliable Rochester accountant to maximize your generosity to your heirs and recipients while minimizing your taxes.

Personal Exemption

Since gift and estate taxes change from one year to the next, you are well-advised to always seek the expert guidance of an experienced Rochester accounting and tax professional on these matters. This includes the issue of personal exemption, which permits for non-taxable transfer of assets as gifts or inheritances within set dollar amounts.

Keep in mind that the set amounts are indexed for inflation so increases in future years are always a possibility; ask your Rochester accountant for any possible changes. For deaths in the following years, the personal exemptions are:

• 2011 - $5 million
• 2012 - $5.10 million
• 2013 - $5.25 million

If your estate is worth less than the above amounts at the time of your death, then you and your heirs will not owe federal taxes. If you have made taxable gifts while you were alive, on the other hand, the amount of your individual exemption will be reduced by the amount of taxable gifts made.

If you belong to the non-super wealthy set, as are 99% of the population in the United States, then you can leave your estate to your heirs without the IRS dipping their hands into it. Well, at least at first but by then you have become wiser about the ways of the taxman, thanks to the expert assistance of the best Rochester accounting and tax professionals.

But as always there are exemptions to the rule so ask us for further information. This is especially true in the State of New York where the state government collects on estate taxes even when the federal government cannot.

The Affordable Care Act: You May Need to Work with a Rochester Accounting Firm

The Affordable Care Act has been a topic in the news for well over three years. As the law begins its implementation, there are rules and requirements that must be adhered to in order to remain in compliance with the act. While some business owners may wish to try and figure things out on their own, they likely would be making a huge mistake. Granted, the employer mandate has been recently waived buying businesses more time to learn how to comply with the law, there is only so much a novice will be able to figure out. As such, it is absolutely necessary than anyone running a small business speak with a tax professional discuss matters with an qualified Rochester accounting tax specialist who is able to offer the proper guidance and advice. Anything less runs the risk of turning into a major problem for a business owner.

Most are likely aware that the law requires businesses with 50 full-time employees to offer health coverage or pay a penalty. Those who have heard this might not have looked closer at the wording of the law or read any of its related statutes. There is likely a good reason why they would not think to do so. The owner of a business is not involved with accounting and does not follow such matters closely. Be that as it may, the law is the law and there will be requirements which must be followed.

For one, the 50 employees refers to the total amount of employees among all the businesses owned by someone. In other words, if you owned 5 businesses with 10 employees, providing healthcare is required. As skilled Rochester accounting professional will be able to advise you about matters such as these.

Also, the delineation of 50 full-time employees could mean the equivalent of the total of the hours worked by 50 full-time employees. If a host of part-time employees end up equating with the number of full-time hours, requirements to cover benefits or pay fines kicks in. Timelines also exist for a business to comply with the law. Has your business down what is required to stay on top of its timeline? If not, then there could be a number of troubles coming down the road.

Once again, since the law is new and business owners are not versed on how to deal with it, hiring a professional accountant is a much better plan than filing messed up tax returns. If you do that, the risk of an audit increases exponentially. Even if you do not get audited, the tax return will have to be changed. How could it not be? The figures on it were wrong. When a tax return has been adjusted, you will usually find a bill showing up in the mail not too long after you have filed it. Rather than deal with such unexpected and annoying financial woes, it would be much better to have a Rochester accounting tax professional handle your business' ability to implement the program the right way.

Obamacare and Your Taxes for 2013

All Rochester accounting firms including Rizzo & DiGiacco have been well prepared for the implementation of the Affordable Care Act, also known as Obamacare, as soon as it was signed into law on 23 March 2010; it’s their job, after all. But it is also the job of taxpayers such as yourself to anticipate Obamacare’s impact on your taxes for 2013.
 
Here then are the most important aspects of Obamacare as its provisions apply to tax planning goals. If you have any questions, concerns and issues about the law’s impact on your taxes, you should get it right from the horse’s mouth, so to speak – obviously the best Rochester accountant from our company! (Note: We also offer CFO outsourcing services for businesses)

Medicare Payroll Tax

 

In case it has escaped your attention, Medicare has faced and continues to face major financial concerns brought by several factors including the budget crisis and the national recession. The Obamacare provision regarding the payment of the 2.5% Medicare payroll tax on earnings above the stated thresholds - $200,000 for single taxpayers and $250,000 for married couples annually – is designed as part of the plan to keep the Medicare program running as well as it should be.

Obviously, the tax will affect high-income earning households. If you belong to the category, you can expect your Rochester taxes to have substantial differences in 2013 than in 2012 because of it.
Note: Your Rochester CPA will fill in the tax under its official name of Medical Hospital Insurance (Part A) Tax for the Medicare Hospital Insurance (HI) Trust Fund. Look for it for your enlightenment’s sake.

Unearned Income Tax

Yet another way that Obamacare will affect taxes in 2013 is the unearned income tax. Keep in mind that the tax will apply to a wide range of investments and their income including but not limited to dividends on stocks, interests on deposits, and rent revenue.

Individuals with several investments in their portfolios are then well advised to get on board the best Rochester consulting firm’s roster of clients so as not to overlook items wherein unearned income tax may be levied. The more accurate your tax returns in this regard, the better your chances for staying on the right side of the law - and the accountants and tax planners of Rizzo & DiGiacco will be of valuable assistance on this matter.

As with the Medicare payroll tax, the unearned income tax will affect high-income households. Single taxpayers earning more than $200,000 and married couples earning more than $250,000 per year will be subject to a surtax of 3.8% prior to deductions.

Cadillac Health Insurance Plan Tax

Although the tax will be imposed in 2018, Americans are well advised to start looking for affordable health insurance plans before the tax takes effect. The Cadillac health insurance plan tax refers to the steep 40% penalty for individuals enrolled in health insurance policies costing $10,200 or higher and for families with health insurance plans costing $27,500 or higher.

The bottom line: Be proactive by discussing the impact of Obamacare on your healthcare plans and your tax plans with your accountant and/or tax planner.

Prepare for Rochester Consulting Sessions

One of the best ways to find a Rochester CPA that is perfect for your needs is to talk to several of them. Spend some time compiling a list of possibilities and then check them out online. You need to explore their features offered to make sure they are a good match for your personal or business needs.

Next, you need to find out their rating with the BBB and also what other clients have to say about them. Only select those businesses that have a BBB rating of B+ or higher. This means that they are excelling in their line of work and that works to your advantage. Read the various reviews from clients to find out about the pros and cons of a given business.

For those that seem quite favorable, write down their name and phone number. Then you can get in touch with them for an appointment. Ask about Rochester consulting which should always be free of charge. With the consulting, you need to be prepared for it so that you get all you can out of the session. If you go in and waste time because you don’t know the direction to take all of it, then you will get very little value out of it.

Show up with a list of questions that you have about tax planning, Rochester taxes, and other details. Use this same list of questions at each of the Rochester accounting firms you consult with so that you can compare answers. It is fine to jot down some notes too while you are in that meeting, they won’t mind at all.

It is acceptable to ask questions about their areas of expertise, experience, and their ethical behaviors. You need to know that the Rochester accountant you hire is going to be exceptional in all matters for you. Knowing you can count on them to be honest, efficient, and to be affordable will give you peace of mind.

If you are interested in CFO outsourcing, ask if they offer it. Not all accounting locations do but more of them are including it. If they get asked about it enough, they will consider adding it to keep customers happy and to help them secure new clients. The demand for services is very powerful when it comes to determining what services stay, what goes, and what is added.

You may wish to bring along some documents with you to show the CPA during the consulting session. They can even answer some specific questions about them for you. Communication is important so be open about what you need, what you expect, and don’t leave without answers to your questions.

Of course there will be those entities that talk in circles and don’t give you effective answers. Just mark them off your list because you don’t want to settle for a company that operates in such a manner. Not when there are so many better choices for you in the Rochester area that will do all they can to get your questions answered. They want to help, not make more issues for you.
Make sure you thank them for the time they gave you to talk. Take as much time as you need to make up your mind about who you will work with. When you make that call to move forward, you will already know what you can anticipate from that relationship.

Rochester Accounting Services Offer More than you Think

When most people think about Rochester accounting services, they think about taxes for themselves or for a business. They also think about tax planning services. One of the other options that you may be interested in for your business is CFO outsourcing. This is a practical solution and it is also a way to reduce the cost for the business.

It is a surefire way to do more for the business without one more body to make room for too. Perhaps you don’t have the office space. Instead of hiring someone that is at the business daily, the Rochester accountant can take care of those tasks for you. This short cut may be one that saves you money and time, but it doesn’t mean you compromise the overall importance of that position and role within any given business. It just means you are relying on an external source to take care of it for you.

While Rochester taxes are important, they are really only part of what a business is all about. That is why it makes sense to expand your needs through a CPA to what will really get you results. Such businesses have certainly expanded what they offer well beyond just the realm of tax preparation and tax laws.

For example, they can even help you with successfully identifying the right methods for ending a business. There can be serious tax repercussions and higher amounts due to the IRS if you don’t follow certain guidelines. They can assist you with creating a plan of action that is both legal and also going to offer you the best possible tax breaks available.

Spend some time with Rochester consulting opportunities so that you can find the right business to do this for you. The consulting process allows you to ask questions, get information and decide who has the right methods and experience for your CFO outsourcing to be the most efficient. Take your time finding the right link for this part of your business operations.

With so many realms of a typical business these days, including brick and mortar and e-commerce, you need to be willing to expand in new directions. Outsourcing has become a great way for a business to lower costs where they can. As a result, they can put more funding into what they must to keep the business moving forward, into research and development, and even into marketing. Perhaps now is the time for you to evaluate what benefits you can gain through such a process.

It may be the same Rochester CPA that offers you other services. If you are already working with a CPA, it makes sense to see if they can take on that additional role for you. If they don’t offer the service though you can definitely bring another entity on board to be part of the overall structure for the financial operations of your business.

Your Accountant Can Do More than Taxes and Crunching Numbers

When most people walk into any Rochester accounting firm, they are only interested in having their books done. This can be just basic bookkeeping, or tracking assets for several companies. In some cases, the Rochester accountant may even be hired to do a simple audit for a company.

But there is so much more that this professional can do for you. You might not realize this, but beyond your basic finances and tax planning, this professional will be able to help you with more areas of your business.

Most professionals working in a Rochester accounting firm will have a great deal of knowledge and expertise in the world of business. Since the industry standard is a Master’s in Business Management Accounting, they are going to know more than just how to run the book. In fact, the time that they have spent in colleges learning this information usually gives them a good eye that can help you through some of the other situations your business is going through.

In fact, business plans and even a business succession plan can be handled by your Rochester accountant. They can even help you to go through the process of forming partnerships, trusts, estates and other legal elements that you might not be able to do on your own. Thanks to their understanding of business and tax law, you can have some peace of mind in knowing this is being done properly.

Even when your company is face is a bankruptcy, this team of professionals is going to be able to guide you through the steps, to ensure that your best interests are kept and that your company is left with options that could result in it eventually being saved. This comes from understanding and deciphering the details of the local and federal laws and knowing what your options are. While you could do this on your own, the accountant is going to end up being your best choice.

No matter what Rochester accounting firm you choose to handle your tax planning, audits or even business assistance, it will be important that you do ensure that they are certified to help you. An example would be a Rochester CPA, as they have the right knowledge and tools available to them, to help ensure that they are giving you the best guidance possible.

Remember, this is your business and your life that is going to be impacted. Make sure you take a moment to ensure that you are hiring the best. What you will find is that the area offers a variety of professionals who have different levels of experience you can choose from. It is important you choose the most qualified individual that you feel comfortable around as there is a good chance you will be seeing a lot of each other.

Inherent Characteristics of A SIMPLE IRA Plan

Tax planning is a long drawn process. However, this does not mean that it has to run throughout the year. In fact, in order to avail most tax benefits, a business needs to ensure that it has everything pertinent in place well in advance. This is exactly what we, as your chosen Rochester CPA, look to do for your business. There are various instruments that we try to use to get you the maximum Rochester taxes benefits. However, which ones fit your business depends entirely on the key nature of your business.



One of the instruments that we recommend for businesses looking for tax planning is the SIMPLE IRA plan. Here are some key characteristics of the SIMPLE IRA plan that should be of use to you.

1. Size of the business matters:

The first thing you need to know about the SIMPLE IRA plan if you are in the midst of tax planning is what any Rochester CPA would tell you. This is that the SIMPLE IRA is only limited to those companies whose employee strength does not exceed 100. This means that you can only avail the SIMPLE IRA plan if your business employs 100 or less than 100 employees.

2. Adopting the SIMPLE IRA plan:

If you know that your business meets the prerequisites then all you need to do is contact a Rochester CPA like us and ask them to set everything up for you.

We would ensure that you get the Rochester taxes benefits by choosing whether a Form 5304-SIMPLE, 5305-SIMPLE or a SIMPLE IRA prototype suits your organization the best. Subsequently, we would help you establish it.

3. Two forms of contributions:

There are two ways through which you can contribute in a SIMPLE IRA plan. You should note, however, that your benefits in terms of Rochester taxes would remain the same, regardless of your choice. Your choices would be between a matching contribution of up to 3 percent of the employee’s salary and a 2 percent contribution for each employee which would be non elective.

4. Mandatory exclusivity:

Establishing a SIMPLE IRA plan means, however, that you cannot partake in any other retirement plan. Effectively, this is something that needs to be assessed. This is also a stage of tax planning where you need our help as your Rochester CPA.

Basically, in our capacity as your Rochester CPA, we would assess whether the Rochester taxes benefits you would get from a SIMPLE IRA plan would be enough for your organization by themselves or not.
If we find during the tax planning procedure that you need more Rochester taxes deductions and exemptions then we would not recommend the SIMPLE IRA for you. In either case, expert guidance from an experienced Rochester CPA is something you should look for.




 

Your Rochester Accountant and You During Your Retirement Years

Many articles have been written about retirement especially on the front end – planning for retirement – and on the back end – transferring assets at the twilight of one’s life. This is not one of those articles. Instead, we will be discussing the middle years of retirement when your living expenses are sourced almost solely from your retirement fund as well as the roles of your Rochester accountant at this time of your life.


Budgeting Your Assets

Building a good professional relationship with the most trusted Rochester CPA before your retirement years is a must. This is because the management of cash flow during retirement can spell the difference between living well and living not so well from 65 years old and onward. Keep in mind that you will most likely be withdrawing from your retirement fund instead of adding to it through full-time and part-time employment so budgeting is of utmost importance.

Cash flow during retirement is affected by changes in taxes (cash outflow) and salaries, interest income and dividend income (cash inflow). You must discuss with your accountant the best ways to budget your retirement assets, both in the present and future, so that you can, indeed, live well. Your Rochester accountant will also discuss the effects of your retirement fund withdrawals on your tax burden. With his expert guidance, you can plan the withdrawals over a number of years and then plan for the tax burdens so that the latter are not so onerous.


Making Housing Decisions

Housing decisions have tax implications so it is important to consult with atrusted Rochester CPA before deciding on your relocation plans. For example, if you have a mortgage on your home, your accountant will recommend payment of the monthly amortization as is. Paying off your mortgage from your tax-deferred funds and retirement accounts is inadvisable because of the burdensome tax implications. But each individual’s circumstances upon retirement is unique so whatever works best for your friends may not necessarily work in your favor. Your consultations with your Rochester accountant come in handy.


Protecting Your Assets

This is probably the most important aspect of retirement that your accountant can provide expert advice on. Asset protection – your assets, to be exact – is a must if and when you want to enjoy your retirement years since without your assets (i.e., cash in bank and on hand, marketable securities, real estate property) to live on, you will have no resources to cash in on. Plus, there’s also the matter of choosing the best options for your retirement-age investments. Your Rochester accountant will outline your options such as annuities, certificates of deposits, and marketable securities, present the numbers, and then assist in making the actual investments.


Looking Out for Healthcare

This may seem like a long shot for accountants to get involved in but you should consult with your accountant on this matter, too. Your healthcare premiums as well as costs for regular medical visits and hospitalizations will affect your short-term and long-term budgets, aspects of retirement that your accountant will be able to help, too.

Indeed, your retirement years will be better if and when you can work well with your Rochester accountant. Do so now!

Financial Plans for Increased Profitability in 2013

Anyone can run a small business these days with all the internet startups and home based business concepts which exist. The downside is most of us are not accountants. Business tax planning is a lot different than your individual taxes. In your personal life grabbing onto Turbo Tax might be an option, especially if you live a simple life. When you have a simple home business, you still need a Rochester accountant. Tax deductions, liability, and laws change often. You have probably heard about the tax hikes which were being proposed for 2013 and other tax related news. Issues like this are what accountants are paid to keep up with. They know what can and cannot be deducted, which translates into better financial planning for you. To prepare for a better business with more profits it is time to seek Rochester consulting.

With the right Rochester CPA you can start putting money away for your personal retirement, as well as getting your business in a better financial position to grow. There are eight things you can do to ensure you have a proper financial plan. The first is creating a financial plan in terms of the expected revenue you will bring in each month and project what your possible expenses are going to be. Chances are you have been in business for a year or two already, so you should have an idea of what you bring in each month and what the constant expenses are.

Every month you need to review your plan. Did your projections on revenue and expenses meet or exceed your outline? What happened if you lost profits? Lost profits are not something you can recover, so ensuring you do not lose anymore is important. If there are losses it is up to you to make adjustments as soon as possible to reduce the loss for the next month.
A Rochester CPA can help you with this by bringing it to your attention when one month or quarter has not earned as it should have or as per your plan. They may be able to suggest some of the areas you need to improve on. Perhaps you are spending too much on entertainment/dining to try and win new clients. Mileage or fuel expenses can also be high, but something you might be able to reduce. Overhead costs might have increased for some reason, thus you may find ways to reduce them again.

Before you spend any money in your business think about it. Do you need to make this business expense? Is it truly going to help increase your profits? Sometimes you can delay expenses as a means of increasing profits.

For financial planning you cannot be afraid of hiring the help you need like Rochester consulting. A consultant can help direct you towards better expenditures and profits.