Tax

Tax

Tax Due Dates for November 2013

Anytime Employers – Income Tax Withholding. Ask employees whose withholding allowances will be different in 2014 to fill out a new Form W-4.
November 12 Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the third quarter of 2013. This due date applies only if you deposited the tax for the quarter in full and on time.

Employees who work for tips – If you received $20 or more in tips during October, report them to your employer. You can use Form 4070.
November 15 Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in October.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in October.
Tax

Avoid a Tax Surprise: Check Federal Tax Withholding

Some people are surprised to learn they’re due a large federal income tax refund when they file their taxes. Others are surprised that they owe more taxes than they expected. If this has happened to you, then it’s time to check your federal tax withholding or payments.

Here are some tips to help you bring the tax you pay during the year closer to what you’ll actually owe–and avoid a tax surprise when you file your 2013 tax return next year.

Wages and Income Tax Withholding

  • New Job. When you start a new job, your employer will ask you to complete a Form W-4, Employee’s Withholding Allowance Certificate. Complete it accurately to figure the amount of federal income tax to withhold from your paychecks.
  • Life Event. Change your Form W-4 when certain life events take place such as a change in marital status, birth of a child, getting or losing a job, or purchasing a home. Any of these life events impact the amount of taxes you owe. Typically, you can submit a new Form W-4 at any time during the year.
  • Federal Withholding Calculator. Use our handy online financial calculator to help you figure the correct amount of tax to withhold based on your situation. 

    Simply go to the “Resources” section of our website, click on the Financial Calculators, and look for Should I Adjust My Payroll Withholdings?.

Self-Employment and Other Income

  • Estimated tax. This is how you pay tax on income that’s not subject to withholding. Examples include income from self-employment, interest, dividends, alimony, rent and gains from the sale of assets. You also may need to pay estimated tax if the amount of income tax withheld from your wages, pension or other income is not enough. If you expect to owe a thousand dollars or more in taxes and meet other conditions, you may need to make estimated tax payments.
  • Form 1040-ES. If you think you might owe estimated taxes on a quarterly basis, use the worksheet in Form 1040-ES, Estimated Tax for Individuals. Don’t hesitate to contact us if you need help filling out Form 1040-ES, we’re happy to assist you.
  • Change in Estimated Tax. After you make an estimated tax payment, some life events or financial changes may affect your future payments. Changes in your income, adjustments, deductions, credits or exemptions may make it necessary for you to refigure your estimated tax.
  • Additional Medicare Tax. On January 1, 2013, a new Additional Medicare Tax went into effect. The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation and self-employment income that exceeds a threshold amount based on the individual’s filing status. For additional information on the Additional Medicare Tax, please call our office.
  • Net Investment Income Tax. A new Net Investment Income Tax also went into effect on January 1, 2013. The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts. Please give us a call if you need additional information about the Net Investment Income Tax.

Questions about federal tax withholding? Give us a call today. We’ve got answers.

Tax

Reduce Your Taxes with Miscellaneous Deductions

If you itemize deductions on your tax return, you may be able to deduct certain miscellaneous expenses, which might reduce your federal income tax. With that in mind, let’s take a closer look at miscellaneous deductions that might benefit you this tax season.

Deductions Subject to the Two Percent Limit. You can deduct most miscellaneous expenses only if they exceed two percent of your adjusted gross income. These include expenses such as:

  • Unreimbursed employee expenses.
  • Expenses related to searching for a new job in the same profession.
  • Certain work clothes and uniforms.
  • Tools needed for your job.
  • Union dues.
  • Work-related travel and transportation.

Deductions Not Subject to the Two Percent Limit. Some deductions are not subject to the two percent of AGI limit. Some expenses on this list include:

  • Certain casualty and theft losses. This deduction applies if you held the damaged or stolen property for investment. Property that you hold for investment may include assets such as stocks, bonds and works of art.
  • Gambling losses up to the amount of gambling winnings.
  • Losses from Ponzi-type investment schemes.

Miscellaneous deductions are reported on Schedule A, Itemized Deductions. Be sure to keep records of your deductions as a reminder when you file your taxes in 2014.

Keep in mind that many expenses are not deductible. For example, you can’t deduct personal living or family expenses. If you have questions about whether your expenses are deductible or need assistance with Schedule A, don’t hesitate to give us a call.

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