Showing posts with label Naperville Tax Advisors. Show all posts
Showing posts with label Naperville Tax Advisors. Show all posts

Friday, February 15, 2013

New Taxes in 2013 - What You'll Pay

The New Years Day compromise on the fiscal cliff was designed to prevent massive tax increases from taking effect that many feared would devastate the economy. Yet even with the compromise, several new taxes in 2013 will raise tax bills for millions of Americans, and the groups that are the most affected by the changing of the calendar may surprise you.
Here's a list of new taxes that took effect as of Jan. 1:   
Income tax
Income tax (Photo credit: Alan Cleaver)
Payroll Taxes: Returning to Old Levels
For the past two years, just about everyone who has a job got a tax break of 2 percentage points on the Social Security taxes withheld from their paychecks. But on Jan. 1, the rate of tax withheld from employee paychecks rose from 4.2% to 6.2%, representing about a $1,000 tax increase for typical families earning $50,000. Already, anyone who's received a paycheck in 2013 has likely seen the impact of this tax, with those who get paid twice a month having about $40 extra taken out under the FICA on their paychecks.
Few analysts expected the fiscal cliff negotiations to extend this tax break further. But given that it hits at just about everyone, it could have the biggest impact of any of the new taxes in 2013.
Medicare Surcharge
High-income earners will see a brand-new tax this year. Single filers earning more than $200,000 and joint filers with income over $250,000 could be subject to two new taxes.
With one tax, if your earned income goes above the threshold, then you'll owe an extra 0.9% of your earnings in Medicare withholding. In some cases, this additional money may be taken directly out of your paycheck, although for joint filers, your employer may not be able to do so accurately because it doesn't know what your spouse earns in order to get the calculation correct.
The second tax applies to investment income, including interest, dividends, and capital gains. For this income, you'll owe an extra tax of 3.8% for any amount that exceeds the threshold. The idea behind this part of the new tax is to treat investment income for high-income earners the same way as earned income, making both types of income subject to the same higher Medicare tax rate.
New Tax Brackets and Rates for High-Income Earners
The biggest news from the fiscal cliff compromise was the return of the 39.6% tax rate for singles earning more than $400,000 and joint filers with income above $450,000. This rate is a carryover from the old rate structure that existed before the tax cuts of the early 2000s and represents a 4.6 percentage point rise from the old 35% rate.
In addition, taxpayers whose earnings are above these thresholds will see their taxes on dividends and capital gain income rise from 15% to 20%. Given that dividend rates could have risen as high as the 39.6% ordinary income tax rate, investors were fairly pleased with the eventual outcome.
Disappearing Deductions and Other Hidden Taxes
In addition to the explicit increases in taxes, some old provisions are back that will have the same tax-increasing impact. In particular, two separate rules that phase out certain deductions for high-income taxpayers came back this year after having been absent from tax law since 2009.
The phase-outs target two areas: personal exemptions and itemized deductions. One rule, known as the PEP, reduces the value of your personal exemptions by 2% for every $2,500 in additional income you earn over thresholds of $250,000 for singles and $300,000 for joint filers. The other rule, called the Pease phaseout, cuts the amount you can claim in itemized deductions by 3% of the amount of additional income you earn over those same thresholds, subject to a maximum reduction of 80% of your itemized deductions.
Those calculations are a bit complicated, but the net result is that you can end up paying thousands of extra dollars in taxes by losing the value of those deductions.
Finally, the estate tax rate rose from 35% to 40% this year. With the $5 million exemption made permanent, however, the impact of the tax will be limited to far fewer families than would have paid tax without the fiscal cliff compromise.
Start Planning
These new taxes for 2013 won't make anyone happy, but by knowing about them early on, you can start planning for them right away. Doing so may not let you reduce your tax bill too much, but it'll at least get you prepared for the hit to your paycheck and your tax refund next year.

The article New Taxes in 2013: What You'll Pay originally appeared on Fool.com.
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Wednesday, November 23, 2011

Navigating Tax Laws

If you're not an expert on tax laws, trying to make heads or tails of all the legal jargon and financial speak can be almost impossible. Even folks who know a thing or two about finances, often defer to Naperville tax advisors when they need help figuring out how the latest tax laws apply to their own financial picture.

Avoiding Potential Legal Problems

As you know, making mistakes on your tax filings can lead to serious problems. For some folks, serious tax mishaps can even lead to jail time. Obviously, these are the worst case scenarios that lead to someone actually going to prison. But with the stakes being so potentially high, it's certainly easy to see why people who avoid tax troubles opt to get the help of the expert Naperville tax advisors .

A Tax Law Expert in your Corner

Remember, a tax advisor is someone who has advanced training and experience about tax laws. Our advisors do their best to not only help you to avoid potential tax legal problems, but also to help you minimize taxation. After all, none of us wants to pay any more taxes than we have to, but it takes an expert advisor to help you minimize your yearly taxation rates.

Preparing for Yearly Tax Law Changes

And since the federal and state tax laws change every year, it's essential to have a professional that you can trust to work on your yearly tax return. Who knows, you may even end up with a healthy return instead of paying a tax bill, when you have a trustworthy advisor to prepare this year's taxes for you.
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Monday, October 10, 2011

Where Do You Get Tax Assistance?

Let's face it – tax season is never a fun time for millions of people and businesses. If you have a good income, property and investments, filing your taxes can get downright hairy. And the unfortunate thing is lots of people never reach out for professional help from the areas top Naperville Tax Advisors here at Susan S. Lewis Ltd. Imagine being in a medical emergency and not getting professional medical advice and services. You'd never do that, right? So don't leave something as important as your tax preparations to anyone less than the best tax professionals in Naperville.
Tax PreparationImage by agrilifetoday via Flickr

Today's tax laws are tough to deal with. And you can be sure that tax laws will continue to become more complicated in coming years. That means filing your own taxes can be stressful and time consuming. Plus, it's very easy to make complicated mistakes that could cost you quite a bit of money. Let us help you, you will get the assistance of certified public accountants who know all the ins and outs of the complicated tax laws in your area. That means you don't have to deal with the stress and that costly mistakes just won't happen.

When you have us working on your tax return, you can rest assured that your tax filing is in good hands. And you don't have to worry about staying on top of the latest, confusing tax laws any more. You'll have the area's best tax specialists to do that for you. Take it from me, getting professional tax assistance sure makes tax season a lot easier to deal with.
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