Avoid a couple of “Mistakes” which many tax payers commit every year


February 18th, 2014

receipts for income taxt prep
Mistake #1: Just because you are not required to file a tax return due to low income, you may be missing out on a refundable EIC, or Earned Income Credit. It can be substantial and net you a significant refund from IRS.

Mistake #2: Many tax payers do not keep track of their activities which can impact what they owe the government. Often times people opt for the Standard Deduction when, in reality, they have enough medical expenses and charitable contributions which would make itemizing more favorable to them.

The moral is: Get receipts for all of your medical expenses. If the total exceeds 10% of gross income, they are deductible. Also get receipts for charitable contributions, both cash and non-cash from the non-profits you support.

Talk to your tax man or tax woman. A reasonable professional will not charge you for a brief consultation which could save a client money. That’s what we are here to do!

Mistake #1: Just because you are not required to file a tax return due to low income, you may be missing out on a refundable EIC, or Earned Income Credit. It can be substantial and net you a significant refund from IRS.

Mistake #2: Many tax payers do not keep track of their activities which can impact what they owe the government. Often times people opt for the Standard Deduction when, in reality, they have enough medical expenses and charitable contributions which would make itemizing more favorable to them.

The moral is: Get receipts for all of your medical expenses. If the total exceeds 10% of gross income, they are deductible. Also get receipts for charitable contributions, both cash and non-cash from the non-profits you support.

Talk to your tax man or tax woman. A reasonable professional will not charge you for a brief consultation which could save a client money. That’s what we are here to do!

Mistake #1: Just because you are not required to file a tax return due to low income, you may be missing out on a refundable EIC, or Earned Income Credit. It can be substantial and net you a significant refund from IRS.

Mistake #2: Many tax payers do not keep track of their activities which can impact what they owe the government. Often times people opt for the Standard Deduction when, in reality, they have enough medical expenses and charitable contributions which would make itemizing more favorable to them.

The moral is: Get receipts for all of your medical expenses. If the total exceeds 10% of gross income, they are deductible. Also get receipts for charitable contributions, both cash and non-cash from the non-profits you support.

Talk to your tax man or tax woman. A reasonable professional will not charge you for a brief consultation which could save a client money. That’s what we are here to do!

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Still Have Not Filed your 2010 Tax Return?


July 21st, 2011

tax return nightmare

Please do not allow fear of owing to make you catatonic!

I am still relatively busy filing 2010 tax returns for clients who failed to file by April 15th.

The reasons for the tardiness are myriad including, not having all of the documents together, having recently moved or undergone a change in marital status. However, the number one reason for the procrastination, in the case of my clients, is the fear that they will owe a significant amount of money to the IRS and to the state.

Two points to take away from this piece are:

First of all, your tax situation will not resolve itself. The IRS will not simply “Go Away”, they really want your 2010 tax return.

Secondly, the longer you wait, the more you will end up owing because of penalties and interest which will continue to accrue.

A solid tax professional knows how to complete correspondence to send along with your return explaining your situation and the payment program into which you are able to enter.

From a real world perspective, I recently filed a return for a client who feared he owed a lot of money, however, he actually is to receive a refund, so in effect, he went through months of sleepless nights needlessly.

So, be proactive and contact your tax guy or gal and get it straightened-out. Get your 2010 tax return filed now. You’ll be glad you did.

Martin Taffe

Taffe Tax & Accounting Service

www.taffetax.com

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“Some“ Internal Revenue Service Tax Law Changes for 2010


January 26th, 2011

irs tax lawIRS Tax Law Changes for 2010

The mileage deduction for business use of vehicles has decreased from $.55 per mile to $.50 per mile.

Filing Date Changes to April 18th because Emancipation Day is on Saturday April 16th. In 1862 Abraham Lincoln freed enslaved persons in the District of Columbia. Because the 16th is a Saturday this year, government workers will celebrate the holiday on Friday, the 15th.

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Millions of Taxpayers Will Have to Wait to File This Year


January 24th, 2011

internal revenue serviceAt the end of 2010 lawmakers extended tax cuts made available under the Bush Administration (Bush Tax Cut). Due to this last minute update, those who itemize their deductions on Form Schedule A must wait until the IRS updates its systems. It may be well into February before the updates are finalized.

Additionally, educators who paid out-of-pocket for school-related items, as well as, anyone who paid for post-secondary education, that means college-related expenses, will also have to wait to file their tax returns.

The upshot is that it may mean more money back from the government for individuals in the above-listed categories.

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Did you file an Income Tax extension in April?


August 11th, 2010

American Tax TimeIf you filed an income tax extension this spring, the due date of October 15th will be here before you know it. So, if you still do not have all of your tax documents, like W-2s from employers, 1099-Ms from clients if you are a contractor, and your mortgage interest documents, it is time to get moving.

Start contacting the companies and financial service providers who need to send you these necessary documents, if you do not already have them, in order for you and/or your tax professional to process your return on time. Some companies can allow you to access these on-line from their web sites. Others may take weeks to process your request and mail them to you.

If you will owe taxes, hopefully you sent a payment with your extension when you filed it. If not, there may be interest and penalties you will owe.

I recently met with a client who filed an extension for her 2009 taxes, who had also not filed taxes for the prior three years. We went through everything together and established that she was missing a number of documents from her bank and from several different employers for each of the years she had not filed. I am helping her get it all together so we can start with the first year in which she had not filed. She was distraught and has been losing sleep worrying about it. I explained to her that everything will be fine, even though she will most likely owe money and possible penalties to the IRS and the state of Maryland.

This is not the type of thing which will simply “go away”. We will file all of the returns separately and tally the amounts and begin a payment program which will systematically bring her back to tax compliance. A good tax professional will help prepare the correspondence to be sent to the IRS and the state to arrange the monthly payment program, as well as, be prepared to help every step of the way.

So, I recommend meeting with your tax professional in order to establish if you do, in fact, have all of the necessary documents.

-Taffe Tax Staff
Your Baltimore Tax Service

Mobile Tax Service Taxes Catonsville | Taxes Ellicott City | Accountant Catonsville
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Holy Cow, Batman! It´s Tax Day Already? – 3 Last Minute Filing Tips


April 15th, 2010

Tax DayWelcome to Taffe Tax’s blog#33 We’re a tax preparation firm located in Catonsville, MD. We’ve been providing tax services to individuals and small businesses for over a decade in the Baltimore Metro area. We thought we’d focus on last minute tax tips today. Tax Day is here and for some reason or another, you haven’t filed your taxes yet. Don’t worry; it happens to all of us.  Here are some quick tips to fix this situation.

File an Extension

Hey, it happens. We’re all busy and this tax season got away from you. Fortunately, the IRS knows this. They’ve supplied the public with a form to assist in this matter. Simply follow the link below to a form that will allow you to extend the personal deadline for up to six months. After this, you will need to finish your taxes. It’s worth noting here that you need to file this form TODAY.

http://www.irs.gov/formspubs/article/0,,id=98155,00.html

E-File

This is a great option. You have until midnight tonight to get this done. Essentially, you fill out the paperwork online and transmit it electronically to the IRS. Some people are leery of putting this information on the web, but the truth is that with today’s encryption standards, there is no need to worry.  It will not be posted for everyone to see. It goes straight to the IRS from your computer.

http://www.irs.gov/efile/article/0,,id=118508,00.html

Use Direct Deposit

This option is perfect for anyone, regardless of when you file. It’s rather self explanatory. The money is directly deposited into your bank account. This allows for you to get your refund in a matter of days, not weeks. This option will be available when you file your taxes.

That’s all for now. Thanks for checking out our blog. If you have questions for our tax professionals or have a topic you’d like us to investigate, feel free to email us. Now get out there and file those taxes!

-Taffe Tax Staff
Your Baltimore Tax Service

Mobile Tax Service Taxes CatonsvilleTaxes Ellicott CityAccountant Catonsville
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3 Year End Tax Tips for Small Businesses


December 1st, 2009

Tax TipThere is a lot going on in December with Christmas and Hanukkah quickly approaching. At this time each year it is important that we get our tax ducks in a row.

1. Make sure your shoe box is organized: Some customers still use shoe boxes but on the whole this message is to recognize that your accounting records are in order. Maybe when the weather was nice it was easy to get outside and leave the record keeping for the future. Well that time is now, take the time now to make sure that your books are in order and accurate no matter if you use QuickBooks, a ledger, or a shoe box. Get everything in place and ready for your accountant.

2. If it was a good year make a few purchases: December is a great time to make purchases your business that you will use in the immediate future which will maximize your deductions for this year, if your cash flow permits. Of few examples of items:

  • Office Supplies: Stock up on paper, envelopes, laser printer cartridges, business cards, and other office supplies.
  • Office Equipment: If you have been planning to buy new office equipment consider purchasing it now. For example, you may want to purchase that new computer you have been holding off on purchasing.

3. Contribute to your Retirement: Make contributions or extra contributions to your retirement plan (if you do not have one please set one up this month). Just confirm that you have not reached the maximum contribution limits for your retirement plan. (401k, KEOGH, Roth IRA, or SEP).

Of course each business owner’s situation and accounting methods vary so these tips are not for everyone especial when considering the cash method versus the accrual method. The cash method of accounting allows for deductions reported for the year that you write the check to the vendor while the accrual accounting method allows you to record an expense when you receive the product or service.

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