“I Do, Taxes Included.”

“I Do, Taxes Included.”

There’s a new meaning to “for better or for worse.”

Under the new tax reform, the marriage penalty is mostly gone. Several factors go into this, like whether you are married, how much you earn and how you file your taxes. New this year, married couples will receive a higher standard deduction for filing jointly, unless they are among the nation’s top earners.

If you’re unfamiliar, here’s a simplified breakdown of how the marriage penalty works:

  • Let’s say that two single individuals each earn a taxable income of $90,000 per year.
  • Under the old tax brackets, both of these individuals would fall into the 25% bracket for singles.
  • If this couple were to get married, their combined income of $180,000 would have catapulted them into the 28% bracket.
  • Under the new brackets, the couple will fall into the 24% marginal bracket…regardless of whether they were married or not.

Believe it or not, that minimal 4% will positively affect this couples’ bank account. The standard deduction for a married couple in the 24% marginal bracket is $24,000. Last year, they would have received a deduction of $12,700.

Before you ask, choosing to file separately would result in a $12,000 deduction. Across the board, the threshold for singles and married couples is exactly double…for most Americans.

This is where you come in, high wage earners. If you have a taxable income over $400,000, your final tax bill will be a little different. For an optimized return, you should contact a CPA for next steps.

So, before saying I do, keep in mind that your taxes will be a little more complex.

There are perks though.

  • Company benefits finally benefit you. You can shop around to find the best healthcare and dependent care benefits, which ultimately impact your take home pay.
  • Take a look at your W-4. Did you know adding an additional allowance or changing your filing to married on your W-4 could result in less taxes taken out and more money in your pocket each paycheck? Consult a professional for the best advice.
  • Itemizing? The new standard deduction for married couples making less than $399,000 is pretty lofty. It may be beneficial to claim the standard deduction rather than itemize. Talk about time saved!

Let’s walk through your finances to ensure you’re set up for success next spring. Reach out today, and we’ll help you hash out the nitty gritty details.

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This New Tax Law Will Save You $2,000+

Freedom from tax penalties

This New Tax Law Will Save You $2,000+

The new tax law brought a lot of changes for taxpayers this year. We broke down the 4 key changes in blogs posted earlier this year. Please check them out if you missed them. Those changes resulted in some winners and some losers. Beyond those 4 big change, there are other smaller changes that are great news for many taxpayers.

One change that resulted from the Tax Cut and Jobs Acts of 2017 is a removal of the individual mandate included to the Affordable Care Act. This could save a lot of patients big money at tax time! Many taxpayers did not have the required minimum essential coverage and had to a penalty. The fee was a hefty $2,085 per family or 2.5% of your income, whichever was higher.

Thankfully, 2018 is the last year that penalty will apply. Beginning in 2019, there will no longer be a penalty for not having health insurance.

While this is good news from a tax standpoint, you might be asking: Who in the world would not want health insurance? The average American spent $10,345 on healthcare in 2016. With insurance. The average family plan cost $833 per month, which led to many finding healthcare unaffordable and looking for alternative solutions.

We highly recommend a solution that saves you tax dollars and in your healthcare costs. A longtime practice, the direct primary care model is more about patients and less about business. The physician provides unlimited services for an affordable monthly fee, which sounds much better than the high deductible plans many insurance companies offer. We estimate that the removal of the penalty, coupled with the option to get quality healthcare via other options could save families over $8,000 beginning in 2019. Needless to say, this is certainly a great savings, and news worth celebrating.

What do you think? Will you keep or drop your insurance in 2019?

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We Can’t Let You Overpay in Taxes Again

It’s your money, why leave it on the table?

We can’t let you overpay in taxes again

OverpayAs painful as the subject of taxes can be, a more painstaking realization is that many taxpayers are handing the IRS extra money each year. So, they’ll call you any minute to let you know when to expect your reimbursement. Just kidding. Kiss those funds goodbye.

Missed deductions, credits that could have been claimed, errors that results in overstated income or understated write-offs… The fact is, overpaying in taxes is more common than you think. Nearly 2 million Americans shelled out more money than necessary in years past.

Please note, if you make an error that results in underpayment, the IRS will automatically contact you. Those who overpaid aren’t so lucky.

Make sure you’re set up for success in 2018. Do a self-analysis.

Ask yourself:

  • Did you self-prepare your return through an online software?
  • Did you rely on a big box retailer staffed with inexperienced employees who could have missed something?
  • Did your tax position change from 2016 to 2017?

Yes? You are likely part of the extra $1.2 billion the IRS kept last year.

Act quickly. Taxpayers must file a claim for a credit or refund 3 years from the date they filed their return or 2 years from the date they paid the tax (whichever is later).

More importantly, if you left money on the table or think you may have, you need a professional to review the nitty gritty details. Tax forms and withholdings are just the beginning. Our team of licensed accountants and tax professionals works diligently to find every opportunity to maximize your return–often recouping 2x the cost to have the analysis done.

It’s easy. Get started here.

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Small Business Owners Deserve this 15% Tax Break

Entrepreneurship is the American dream—why give all your hard-earned money to the IRS?

Small Business Owners Deserve this 15% Tax Break

Finally realizing that the perfect job does not exist will either drive you to drink or ignite a fire in you to set your own destiny. We prefer the latter. More than 28.8 million people have launched small businesses across the US, and oddly enough, only a small percent survive.

Call us idealistic, but determination, ambition and strategic planning define your chances of success. Get after it with everything you have.

Signs you’re built for this:

  • You chose to pursue a career that uses your talents and skills. Rather than just getting by Monday through Friday, you’ve embraced your dreams and your full potential.
  • You didn’t quit your 9 to 5 without researching first. You weighed the pros and cons, because you want to do this the right way.
  • You want to keep learning. Making the right business decisions, like the tax tips I share here, can either make or break you.

Small biz owners spend the majority of the day at work, but sometimes it feels like we’re working for the IRS.

A growing number of small businesses (I’m talking to you, LLCs) pay the mandatory 25% in income taxes, based on income earned throughout the year. On top of that, your salary is also subjected to the standard 15% in self-employment taxes. That’s a total of 40% of your income handed directly to the IRS.

The average entrepreneur earned $49,204 in 2014. To think that $12,301 was paid in income taxes and another $7,380.60 was paid in self-employment taxes, that left them with just $29,522.40 in their bank account. Factor in operating expenses, permits, licenses, equipment and insurance, and the net profit diminishes even more.

One inexpensive change to help alleviate the financial headache of entrepreneurship is to have your business taxed as an S-Corporation (S-Corp). This tax savings cuts your taxes by 15% because you pay self-employment tax only on your salary income and not on your business income. At tax time, you’ll file a business and personal return, and the profits of your business will not be subjected to that 15% tax.

Form 2553 will get you started. Give us a call, and we’ll answer Form 2553 questions for free.

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