Tough Times for Citigroup

Bernanke and Company recently enacted a taper postponement, and this action has put the financial sector into somewhat of a downward spiral. A few lucky companies made it through the postponement just fine; in fact, a very select few even experienced a rise. For the most part, though, companies fell after the news of the postponement hit.

One company that took a particularly hard hit after the postponement is Citigroup, which fell a whopping 3.2% and reported that its interest rates and currency businesses could eventually cause a vast reduction in bond trading. It is also estimated that Citigroup’s earnings will be greatly reduced this year from what they have been in previous years.

This isn’t to say, however, that there isn’t some hope left for Citigroup. An improvement in equity trading could turn things around for the company. Curious (or anxious!) individuals will likely have to wait until income tax time to see for sure how things will turn out.

Don’t let yourself or your company be put in this situation; get ready for income tax time by utilizing the services available through Susan S. Lewis, Ltd. of Naperville.  #NapervilleIncomeTax

Related articles

• Gold Seen by Citigroup Extending Drop in 2014 as Fed Will Taper (bloomberg.com)

What Is the Most Tax-Efficient Way to Take a Distribution from a Retirement Plan?

If you receive a distribution from a qualified retirement plan, such as a 401(k), you need to consider whether to pay taxes now or to roll over the account to another tax-deferred plan. A correctly implemented rollover can avoid current taxes and allow the funds to continue accumulating tax deferred.

Paying Current Taxes with a Lump-Sum Distribution
If you decide to take a lump-sum distribution, income taxes are due on the total amount of the distribution and are due in the year in which you cash out. Employers are required to withhold 20 percent automatically from the check and apply it toward federal income taxes, so you will receive only 80 percent of your total vested value in the plan.

The advantage of a lump-sum distribution is that you can spend or invest the balance as you wish. The problem with this approach is parting with all those tax dollars. Income taxes on the total distribution are taxed at your marginal income tax rate. If the distribution is large, it could easily move you into a higher tax bracket. Distributions taken prior to age 59½ are subject to an additional 10% federal income tax penalty.

If you were born prior to 1936, there are two special options that can help reduce your tax burden on a lump sum.

The first special option, 10-year averaging, enables you to treat the distribution as if it were received in equal installments over a 10-year period. You then calculate your tax liability using the 1986 tax tables for a single filer.

The second option, capital gains tax treatment, allows you to have the pre-1974 portion of your distribution taxed at a flat rate of 20 percent. The balance can be taxed under 10-year averaging, if you qualify.

To qualify for either of these special options, you must have participated in the retirement plan for at least five years and you must be receiving a total distribution of your retirement account.

Note that these special tax treatments are one-time propositions for those born prior to 1936. Once you elect to use a special option, future distributions will be subject to ordinary income taxes.

Deferring Taxes with a Rollover
If you don’t qualify for the above options or don’t want to pay current taxes on your lump-sum distribution, you can roll the money into a traditional IRA.

If you choose a rollover from a tax-deferred plan to a Roth IRA, you must pay income taxes on the total amount converted in that tax year. However, future withdrawals of earnings from a Roth IRA are free of federal income tax as long as the account has been held for at least five tax years.

If you elect to use an IRA rollover, you can avoid potential tax and penalty problems by electing a direct trustee-to-trustee transfer; in other words, the money never passes through your hands. IRA rollovers must be completed within 60 days of the distribution to avoid current taxes and penalties.

An IRA rollover allows your retirement nest egg to continue compounding tax deferred. Remember that you must begin taking annual required minimum distributions (RMDs) from tax-deferred retirement plans after you turn 70½ (the first distribution must be taken no later than April 1 of the year after the year in which you reach age 70½). Failure to take RMDs subjects the funds that should have been withdrawn to a 50 percent federal income tax penalty.

Of course, there is also the possibility that you may be able to keep the funds with your former employer, if allowed by your plan.

Before you decide which method to take for distributions from a qualified retirement plan, it would be prudent to consult with a professional Naperville Income tax advisor.

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent Naperville IRA Rollover advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2012 Emerald Connect, Inc.

Related articles

• Tax Tips for Retirement (turbotax.intuit.com)
• To Roll or Not to Roll: It's Your Choice (susanslewisltd.blogspot.com)

Don't Forget Important Income Tax Deductions

Every year that special day rolls around that people so look forward to – Tax Day! Okay, so maybe I'm being a little bit sarcastic here. I know how much people get stressed out when tax season rolls around, but it doesn't have to be torture ever year. In fact, filing a Naperville income tax return can be a lot easier, when you understand some tax basics.

Don't Forget Your Deductions

The easiest way to start learning about your Naperville income taxes is by thinking about deductions. As you know, every individual and business is eligible for certain deductions when they file their tax returns. Many people, however, overlook many deductions that they are eligible for. And that's like leaving money just lying on the table.

Here are some of the common deductions that you should be aware of:

-    Charitable Giving Deductions – Many people give regularly to charities and don't take advantage of these deductions
-    Student Loan Interest Deductions – More people are getting student loans these days...
-    Unreimbursed Medical Expenses – Insurance companies are requiring many of us to pay more for medical care out of our own pockets.
-    Home Mortgage Interest – If you're a home owner, this deduction is critical.
-    Child Care Tax Credits – With most families being two income families, child care bills can really stack up.
-    Tax Preparation Fees – Yes, you can deduct what you paid last year to get your taxes prepared.

And those are just a few of the more common deductions that many people aren't even aware of, or at the very least are not taking advantage of when they file their tax returns. Be sure to talk to your tax advisor or accountant to make sure that you are getting all of the deductions that you are eligible for, to make tax day less of a burden each year.

Related articles

• What Are Itemized Tax Deductions? (turbotax.intuit.com)
• How to Write Off Sales Taxes (turbotax.intuit.com)

The Tax Year Calendar

Here are some important dates for the 2011 Tax Year:

January

Image via Wikipedia

    18 –     Fourth quarter 2010 estimated tax due. Use Form 1040-ES.
    31 –     Deadline for employers to provide copies of Forms W-2 and 1099 for 2010 to employees.
February
    15 –     If you claimed exemption from income tax withholding last year on the Form W-4 you gave your employer, you must file a new Form W-4 by February 15 to continue your exemption for another year.
    28 –     Deadline for farmers and fishermen who have a balance due on their taxes to file their 2010 individual income tax returns and pay the balance due without penalties.
March
    15 –     Deadline for 2010 Naperville corporate tax returns (Forms 1120, 1120-A, and 1120-S) or to request an extension using Form 7004.
April
    18 –     Deadline to file 2010 Naperville individual income tax returns (Form 1040, 1040A, or 1040EZ) and any taxes owed, or to file for an automatic 6-month extension.
    18 –     Last day to contribute to a traditional IRA, Roth IRA, or SEP-IRA for the 2010 tax year.
    18 –     First quarter 2011 estimated tax due. Use Form 1040-ES.
    18 –     Deadline to file 2010 trust tax returns (Form 1041) or to request an automatic extension.
    18 –     Deadline to file 2010 partnership tax returns (Form 1065) or to request an automatic extension.
June
    15 –     Deadline for U.S. citizens living abroad to file individual tax returns and pay any tax, interest, and penalties due, or to request a 4-month extension (Form 4868).
    15 –     Second quarter 2011 estimated tax due. Use Form 1040-ES.
September
    15 –     Third quarter 2011 estimated tax due. Use Form 1040-ES.
October
    1 –     Deadline for existing employers to establish a SIMPLE IRA plan.
    17 –     If you were given a 6-month extension to file your income tax return for 2010, file Form 1040, 1040A, or 1040EZ and pay any tax, interest, and penalties due.
    17 –     Final deadline to file 2010 partnership tax return if you were given a 6-month extension.

Related articles

• What is the IRS 1040X Form? (turbotax.intuit.com)
• Do You Know the Seven Things about Getting More Time to File your Tax Return (sfstacps.wordpress.com)

Naperville Income Tax and Naperville Accountants

Income tax is one of the biggest forms of revenue collected by any government. Income tax is also one of the largest reoccurring expenses incurred by corporations and individuals.

There is often doubt among people when it comes to tax paying. What is the exact amount they are required to pay, what can they deduct and how can they minimize their tax obligation? As the technology grows, people have access to a variety of financial calculators and web-based tax applications that can assist in filing and managing corporate or individual tax returns. But, you will rest more sound with the aid of a Naperville accountant.

When filing your taxes, it’s important to take advantage of every possible deduction. By consulting Naperville accountants you can get the inside edge in deductions and exemptions you may not have known existed. By consulting an accountant, you will also have an additional level of protection should the federal, state or local government decide to audit you or your company. When it comes to federal, state or Naperville income tax, do yourself and your wallet a favor by hiring a competent accountant.

Related articles

• Is that home in Naperville District 203? (chicagonow.com)

Can I Really be Held Accountable for Earnings not Declared?

     Many tax issues start with marriage, divorce and death.  Naperville income tax payers who are on their own do not have to worry about owing any money.  You simply have a W-2!  Come on now, a refund is the very best thing to get as you get the mail and find a check in it! Even if you are one of the lucky few who owe money, you know where you stand as a single person. Getting married, suffering a divorce, or experiencing the death of a family member can leave many people with owing money to the Internal Revenue Service. If your spouse consistently does not declare the right amount of income, divorces you, or even leaves this Earth, you may not be able to sort out owed dollars without the help of a qualified IRS attorney. An IRS certified attorney may be the best way to sort out the IRS debt.

When your spouse is not honest with their income, money may not be available at the time.  Your spouse could have unreported income and a lot of people don’t understand that if they file a joint return, they are setting themselves up for being responsible for that tax. You may be eligible for deductions that your spouse was going to receive and that could last a number of years!

Money issues get even more complicated with a divorce.  When two people are separated, it’s a very different game.  If the fiscal year has not ended when the settlement is finalized, you will still have to deal with filing.  Some divorces are amicable and others not well at all.

Get your Naperville income tax in check and speak to an accountant soon!

Tax problems solved! News at 10.

     Your Naperville income tax problems can begin with marriage, divorce and even death.  So many people file their own tax return and then don’t worry about having to owe the IRS anything because they think they will certainly get a refund.  No one wants to owe money especially since you worked so hard for it!  Even if you owe money, as a single individual it can be pretty simple.  However, when you hare getting married, divorced or death of a spouse, it can leave so many people with owing money to the IRS.  If at some point, your spouse did not declare the right amount of income, you may not be able to sort it out without the assistance of an IRS attorney.  When a spouse is not honest from the beginning about their income it could be because money was not readily available.  A spouse could have unreported income and most of them do not understand that if they make the choice to file jointly, they are responsible for their spouse’s income along with their own.

Guess what?  The stipulations do not stop there.  If your spouse completes the tax return and you choose not to look at it, they may declare deductions you are not aware of.  You may end up being liable for deductions that a spouse declares and that is not allowed by the IRS.  Situations like these can take years to resolve and can only be done with the assistance of a Naperville income tax accountant.

Timely Tax Returns

Naperville Income tax professionals can assist you in obtaining the very best outcome in payment and reduction of penalties.  Every year thousands of tax payers are subjected to penalties.  There are specific reasons for this and are as follows:

v  Through the year on every check an amount was deducted for income taxes.  Not enough was claimed and is considered an underpayment.

    - Expenses were not correctly calculated and claimed on the tax return.

    - Income that was not claimed on the tax return.

 -The tax return was not filed by 4/15 or an extension was not filed by 4/15.

 -Tax liability outstanding balances were not paid on time.

A large majority of us find that we have tax penalties at one time in our lives.  No matter what the case may be, if you receive a letter from the IRS (Internal Revenue Service) that has a bill in it for the additional amount you owe for a designated tax year, it is wise to contact a tax professional to assist you.

If your tax return was not filed on time or the liabilities you owe are not paid by the due date on your return, additional fees will be charged by the IRS.  An amazing amount of 5% per month will be charged up to 25% of the total tax on the return.  A fee is assessed even if no tax is due.  If it is not filed on time, a $100 fine is due.  Contact a Naperville Income tax professional to help with your tax needs.

Interesting Facts About Naperville

Interesting Facts about Naperville


World-class libraries and schools. Top-notch dining, shopping and entertainment opportunities. Peaceful parks along the riverfront and numerous recreational spaces, with an integrated trails plan connecting many of them. A vibrant, energetic downtown hosting a mix of college students, families and seniors. All just a 30-minute train ride from Chicago, one of the leading business centers of the world.

This, of course, is Naperville. Those unfamiliar with the city view residents’ claims with skepticism. After all, how can one city boast so many advantages? Yet statistics, and national rankings, bear out these assertions. The library system is ranked number one nationally. Money magazine consistently rates the city as one of the top in the country in which to live. The schools, too, bring home awards and offer a multitude of opportunities for the students. The police and fire departments help ensure safe neighborhoods and peace of mind. The quarterly park district brochure of activities has the heft of some rural phonebooks.

For those who work in Chicago, or the many employed in the high-tech corridor along I-88, Naperville is hard to beat when choosing where to make a home. Naturally, it’s not particularly cheap. There is a price to pay for such fine public services, and it comes in the form of a high Naperville tax rate and some fairly expensive homes. Yet with a population of 140,000, the city offers a quite a wide range of home prices that might surprise some. There are modest neighborhoods, town homes, and apartments, filled with those who can enjoy the amenities as much as the folks in the custom homes along the Riverwalk.

The burgeoning population can lead to traffic snarls, but the good news is that you often don’t need to go very far. Getting to Chicago is a breeze on the Metra train, and even getting to the train station is assisted with bus routes throughout much of Naperville. As far as shopping is concerned, if you can’t find it in Naperville or along Route 59 at the western edge of town, you probably don’t need it! If you enjoy dining out, you can choose a different restaurant every night of the month without leaving Naperville.

So, although you might feel you’re biting the bullet with the Naperville income tax and the frequent crowds on a warm summer evening, you will discover that the advantages of living in Naperville outweigh the disadvantages approximately a thousandfold!

Year Round Naperville Tax Preparation

Year-round Naperville Tax Preparation

Every once in a rare while, it seems as though laws actually have some logical, common sense basis. Maybe the legislators who designed them are even something like me! Obviously the tax code has been written for procrastinators: we’re allowed to contribute to IRA’s beyond December 31st and still count them for the previous year; the nearby Naperville Post Office remains open until midnight on April 15th.

Unfortunately, this stretching of time frames doesn’t help cure my procrastination. It’s kind of like setting all my watches ahead 5 minutes in an effort to be more timely. For a while I’m pleasantly surprised that I’m not running as late as I thought, but soon I begin to depend upon that extra time, figuring it into my optimistic estimations of how long it will take me to get ready or to drive somewhere.

What I ought to develop in my daily habits is actually allowing sufficient time rather than tricking myself. I should make a more structured change to my tax habits as well, and plan for my Naperville income tax throughout the year rather than just in April. In fact, looking at my finances only as tax day approaches means I really don’t have time to consider them thoroughly. I’m more likely to simply stay with the status quo.

However, if I sit down with my Naperville accountant on a more regular basis, I can make adjustments that will make April 15th less fraught and perhaps less costly. Investments should be reviewed on a regular basis as industries change, as the stock market fluctuates, as I near retirement and as my situation in life goes through stages. I can be making better choices about my budget and expenditures, if I bear in mind the tax regulations as they relate to my income level.

Granted, my procrastinating nature can be difficult to overcome. But I have tremendous incentive when it comes to tax strategies: keeping more of my hard-earned money in my own pocket. True, the tax laws allow me to postpone all my planning until April 14th if I wish. But the tax laws also allow me to forgo itemizing deductions, thus paying more to Uncle Sam. That may be logical to legislators, but it’s not a very common-sense way to plan my personal budget.