Looking Forward to Your Next Tax Refund? Tips for an Easy Tax Return
Tax Return Refund
Most Americans can expect a tax refund
this year. By-and-large, most working people will fill out form 1040 and wait patiently for a reply from the IRS.
But if you’d like a little extra incentive to get your taxes done this year, and perhaps add a few deductions along the way, then we can help.
In this post, we’ll give you some often overlooked tax tips and provide you with some direction for an easy and lucrative year.
- Consider an increased or decreased withholding on your W4. Whether you selected 0, 1, or more on your W4, changes how taxes are removed from your paychecks. Reducing the number of exemptions will increase your refund.
- Make sure that your filing status is accurate. If you are unsure, talk to a tax specialist about what the correct status is for you. Single, head of household, married filing separately or jointly, for example, changes how your taxes and deductions are figured.
- Deduct familial obligations, like dependent care or associated costs. Also, consider talking to a tax preparer about how to deduct particular family and personal healthcare costs. Even the smallest change can dramatically increase your refund.
- If you are unsure where to start, speak to a tax professional about using current tax law as a means to increase your refund. By talking to a tax accountant now, instead of waiting until next year, you can set up a system to monitor current tax laws and keep a close eye on how they affect you.
- If you missed the boat this year, set up some tax planning measures next year by talking to a tax professional or by using an applicable tax software program. Every little bit helps when it comes time to file your taxes.
For more information on how we can help you with all of your tax related needs, contact us
A&B Accounting and Business Solutions, LLC offers a full accounting service that meets all your needs. We offer small business accounting services nationwide as well as medium business accounting services. Outsourced accounting services is becoming very popular nationwide since many business owners do not have the time and patience to keep up with the daily transactions their businesses generate. We have over 15 years experience doing accounting and can help you focus on your business while we take care of your books and financials.
Payroll Tax Service Discusses What Constitutes Taxable Compensation
All employers, large and small, are required to pay federal payroll tax. Similarly, any time an employer withholds compensation benefits or pays Social Security and Medicare, there are taxes involved.
It may seem like an easy task to determine what is taxable, but there is often much more than meets the eye with the IRS and the determination they use. What is taxable, is often based on contingencies that are hidden in the small print.
The definition of what is taxable, in accordance with how payroll tax is calculated, is typically defined as payment made in the form of wages compensating an employee for work. But how wage is defined is not incredibly narrow. Thus making if difficult to characterize definitively what is taxable compensation.
Further, what constitutes a wage doesn’t hinge on labels. So no matter what moniker you give it (wage, fee, etc.), what makes it a taxable depends on several factors (just have a look at the terms and definitions the IRS has on just Medicare).
However, a good rule of thumb in deciding whether a payment made to an employee is taxable or not is simple, and can be applied in most situations: whenever something of value is given, transferred, whatever to an employee as “compensation” for a service provided, you have most likely made a taxable wage payment, and need to log it as such. Once logged, it is then much easier for payroll tax services to quantify and qualify.
Here are some common types of compensation that may fall under the exception to the rule:
– Vacation and time-off pay
In most, if not all of these cases, there is no concrete definition of whether these types of payment are taxable forms of payment — as we defined above. And again, it’s important to note that dollar amount doesn’t mean it can be called a taxable wage. It will instead fall under a different tax law (meaning it will still be taxable, just not as a payroll tax).
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