Best CPA NY Strategies for Self Employed Tax Planning

If this is your first year being in business for yourself then tax season may be a bit difficult to understand. All tax payers are not equal when it comes to tax time. You need to look into the best CPA NY strategies for self employed tax planning tips when it comes time for tax season. The best method to use that will ensure that your taxes are the best they can be and nothing is missed is to consult your personal tax advisor to make sure that you are paying what you need to pay and keeping track of all your records.

There are a few different things that you may realize with self employed taxes. One is that you will need to pay your own FICA taxes and also take charge of your own retirement plan. Normally, your employer would be in charge of this but now that you are on your own you are in charge. There are a few different areas which you will need to understand when it comes to self employed tax information. Here are a few of the best CPA NY strategies for self employed tax planning methods to make it a bit easier to understand, especially if this is your first year having to do taxes for your company.

You want to make sure you understand how the federal taxes are calculated. The reason for this is because if you are self employed you will be funded for social security and Medicare benefits. You will need to pay a minimal amount to these funds but in the end it will be worth it. If you have to file a Schedule C or even a Schedule C-EZ, make sure you file it with your federal Form, 1040. When scheduling your SE you will need to calculate your self employment tax and also report to them the amount of tax you owe. You also want to make sure you are taking full advantage when it comes to business deductions to lower your taxable income. Things like rental office expenses, equipment, furniture, supplies, and utilities are all business deductions.

One of the best CPA NY strategies for self employed tax planning would be to estimate what you may rotationally owe to taxes to avoid any penalties when it comes time. If you were an employee you would most likely have income tax, social security tax, and Medicare tax already taken out of your pay check. Because you are self employed this would not be deducted so it is a great investment in the long run to deduct these amounts and save the extra money for when tax time is around and you will need to pay. You can also schedule regular payments to pay your business tax Manhattan through out the year so you don’t get stuck paying one lump sum once a year.

If your taxes in New York do not get paid in time you would be notified with penalties or even larger interests to compensate. If you are self employed in NY yet still have employees you will need to pay federal employment taxes in Manhattan and also report information which they request. One way that you can save on your taxes would be if you hired family or relatives for your business. Make sure everything is done correctly or you may be audited by the IRS about the payment to family members that does not look right.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

Courtesy of http://www.foxbusiness.com/:

President Obama will propose Friday in Baltimore a new business tax credit worth up to $5,000 for every new worker hired this year.

Under the president’s plan, a business could claim a tax credit of up to $5,000 for every net new employee it adds to its workforce this year.  If that business hires a worker and fires another, it would be ineligible for this credit.

Senior administration officials said they capped the total credits a business can claim at $500,000 to ensure their proposal mostly helps small businesses.

“The focus is really on small businesses,” said a senior administration official.

The president is also proposing the federal government reimburse businesses for the Social Security taxes they owe on increases in their payrolls this year.

If a small business with 50 employees raises wages by $1,000 for each employee, either through increased pay or hours, the business would receive a tax credit of $3,100 to cover higher Social Security payroll taxes, according to an administration fact sheet.

“It isn’t just about net new jobs, it’s about wages also,” said the official, who added the administration projects these credits will benefit a million businesses.

Provided congressional approval, businesses will be able to claim this credit on their 2010 taxes for any new hire they make during this year.

The tax credits will cost the government $33 billion dollars, according to the White House, citing a Treasury Department estimate.

The president and Congressional Democrats are wrestling with an economy struggling to create jobs, while trying to confront a massive federal deficit.

In this week alone, President Obama called for Congress to temporarily freeze some federal spending to save $250 billion over the next ten years, the Congressional Budget Office forecasted a $1.35-trillion federal deficit for this fiscal year and a $75-billion increase in the stimulus plan’s cost estimate, the Senate approved a measure to raise the debt ceiling by $1.9 trillion, and Democrats have been negotiating billions in new spending to try to catalyze a dormant job market.

While in Baltimore Friday, the president will also address House Republicans who are holding their retreat there.

A tax credit plan may be one of the president’s few economic proposals Republicans may support.

“The only bright spot in President Obama’s latest jobs plan is that his Administration finally acknowledges that lowering the tax burden on small businesses is the most effective way to reduce our nation’s unemployment,” said Rep. Scott Garrett, a New Jersey Republican.  “Unfortunately, while this temporary wage subsidy may create a spike in employment, Americans need permanent relief through sustained growth.”

Strongly opposed to the president’s economic agenda, congressional Republicans have been blasting Democrats for their efforts to spend billions more on highway and rail projects.

“We’ve had enough,” said House Republican Whip Eric Cantor. “The $800-plus billion stimulus bill didn’t produce any jobs.  Then the president says we’ve got to freeze domestic discretionary spending.  But oh, by the way, let me go and propose $150 billion more before our freeze.  None of that makes sense,” he said.

Meanwhile, Senate Democrats are moving ahead with negotiating the details of their latest economic bill.  They say it will, along with the stimulus plan, jump-start hiring and upgrade aging transportation infrastructure.

“I think it’ll give the Republicans an opportunity to – to work with us,” said Senate Majority Leader Harry Reid.  “It’ll be so glaringly apparent to the American people if we don’t get a few Republican votes to support us that they are not interested in any success to the American if they are continually going to say no.”

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

Why Hire a CPA Manhattan to Help With Freelance Worker Taxes

If you are a freelancer then you may need some help this year with your taxes. You need to hire a CPA to help you. Why hire a CPA Manhattan to help with freelance worker taxes? Because they know how to save you money and what forms you need to properly fill out in order to pay your taxes on time.

When you are a freelancer you are considered self employed in NY. You probably work at home in a home office. If that is the case you have several ways to deduct your expenses so you will lessen the amount that you owe to the IRS.

If you run your business from your home office then you can use a portion of your mortgage payment, utilities, phone lines, office supplies, furniture, and your computer or laptop expenses, and your internet connection. Your business as a freelancer is chalked full of deductions because almost everything can be a deduction. You want to make sure that you keep all your records to everything that you purchase. You need to create a file just for receipts and invoices. Whether you work online or on site you will have a minimal amount of expenses.

The CPA Manhattan can also help you determine how much you have to pay in taxes each year. This estimation can be paid quarterly, semi-annually, or annually to the IRS. Sometimes the estimate is high and you end up paying too much to the IRS and then you are entitled to a refund at the end of the year. If you don’t keep up with your payments and let it go, you will receive a letter from the IRS regarding how much you owe, including all interests and penalties added. Your Certified Public Accountant New York City can help you fill out the proper paperwork and help you balance your books so you will be able to send in what is owed regularly.

Starting a freelancer business in NY may be difficult to do at first and you may not feel as though you are making any profit, especially if the IRS is getting a share of it but it is important to keep up with these payments so you don’t have further action taken by the IRS.

When you hire a CPA Manhattan to help with freelancer worker taxes, you need to be clear about where you are finding your work. If it is unpredictable or it doesn’t total much at all then this will affect the amount that you need to pay to the IRS. Your CPA can also help you maintain the proper records so that the paperwork does not get confusing toward the end of the year.

When tax season rolls around you will have a better understanding of what you need to know and what you need to keep up with keeping the IRS happy and making money. Your Certified Public Accountant New York City, will charge a fee for their services but in the end it will be worth every penny.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

WHY MEDOWS CPA IS A GOOD ALTERNATIVE TO THE BIG TAX CHAINS

Many taxpayers are familiar with large tax preparation chains including H&R Block, Jackson Hewitt, and Liberty Tax. Medows CPA, a boutique accounting firm in New York, is often perceived as a better alternative to the large chains for both individual and small business clients.

Medows CPA is open year round and offers much more personalized service to individual taxpayers and small businesses. Medows CPA has long-term relationships with many clients and can support clients in meeting their financial and accounting goals. Medows CPA is competitively priced and has expertise in handling both simple and complex tax returns. The New York tax accounting firm often serves as a business advisor to clients and has flexibility in scheduling appointments, meeting deadlines, and exceeding client expectations. Jonathan Medows is a knowledgeable and highly competent CPA who can take into account the nuances of a small business or individual taxpayer. When an individual has a change in familial status due to marriage, death in the family, or the addition of children, Medows CPA can certainly help. Medows CPA can provide tax preparation assistance with converting W2 forms into 1040 tax returns and much more.

About us: MEDOWS CPA, PLLC is a boutique New York CPA Firm in Manhattan serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

CONVERTING TO A ROTH IRA FROM A TRADITIONAL IRA IN 2010

Prior to 2010, if an individual taxpayer had a Modified Adjusted Gross Income (MAGI) of over $100,000, he or she could not convert to a ROTH IRA from a Traditional IRA.  In 2006, former U.S. president George W. Bush signed the Tax Increase Prevention and Reconciliation Act (TIPRA) removing this income restriction on converting to a ROTH IRA. Now any taxpayer, regardless of income, can make the conversion in 2010.  This is a great opportunity for high-income taxpayers to make a conversion from Traditional IRA’s to ROTH IRA’s.

Taxpayers have the option, for Traditional IRA to ROTH IRA conversions that occur in 2010 only, of having 50% of the current income taxes on the realized gains from the conversion taxed in 2011 and the other 50% in 2012. This applies only to 2010 conversions, and in the future the entire taxable amount will be taxed at once.  If a taxpayer anticipates being in the same or a lower tax bracket in 2011 and 2012, he or she may wish to defer and split applicable taxes. On the other hand, if he or she anticipates being in a higher tax bracket or are already in the 25% tax bracket, it might be best to pay all the applicable taxes in 2010.

When taxpayers convert from a Traditional IRA to a ROTH IRA, they pay federal income taxes on pre-tax contributions as well as gains in the value of the investment. After the investments are converted to a ROTH IRA, they can be withdrawn tax-free in retirement.

Some of the reasons to convert to a ROTH IRA include not needing to use your IRA assets due to sufficient other assets, using the IRA as an intended inheritance for your children, paying taxes immediately or in the years immediately following the conversion instead of in the future upon retirement when tax rates will likely have risen much, and diversifying all of your IRA’s and investments if the taxpayer does not already have a ROTH IRA.

Medows CPA can assist you with making the decision about whether to convert to a ROTH IRA from a Traditional IRA in 2010, and in preparing your taxes accordingly. We are a boutique CPA firm based in New York that also provides advice to clients on how to maximize tax advantages and assist you in your tax preparation.

About us: MEDOWS CPA, PLLC is a boutique New York CPA NY Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

WHY IT IS GOOD TO FILE TAXES EARLY

Many CPA firms including Medows CPA advise clients to file tax returns as early as possible.  One principal reason is that filing early allows your CPA to sort through any potential complex tax issues so that the tax return can be completed as accurately as possible. All CPAs get very busy and inundated with work as April 15^th approaches, so it is best to work with your accounting firm earlier on for more personalized and relaxed attention. As a client, if you choose to file earlier on, you will certainly have less stress and will have one less task remaining on your to-do list.

Taxpayers can begin filing returns as early as January 1, 2010, but since employers and contractors have a deadline of January 31, 2010 for mailing out W2 and 1099 forms, it is most important to wait until all your paperwork is received from employers and contractors.

Filing early on in the year ensures that any refunds that are due to you will be processed more quickly. The IRS will be less occupied can review your returns much sooner.

In addition, if taxpayers wait until the last minute, in rushing to finish preparing the taxes it is easier to make mistakes. Taxpayers may also not be able to meet the April 15^th deadline by waiting until the last minute, since due to sickness, accidents, traffic, or other reasons, it may be impossible to get to the post office. There are definitely fees associated with late taxes filed not on extension, such as interest and fines. Filing early also lets you to choose your preferred method of filing and requesting a refund, if applicable.

About us: MEDOWS CPA, PLLC is a boutique New York City CPA Firm serving the needs of Individuals & Small Businesses in New York City and throughout the nation.  We work with the self-employed, freelancers, LLC, C-Corporations and S-Corporations to help them with their accounting and tax needs.

Jonathan Medows, CPA

MEDOWS CPA, PLLC

http://www.medowscpa.com

http://taxblog.medowscpa.com

info@medowscpa.com

A Unique, Boutique New York CPA Firm Serving the Needs of Individuals & Small Businesses

New Homebuyer Tax Credit Filing Requirements:

The $8,000 (maximum) first-time homebuyer’s tax credit and the $6,500 (maximum) repeat homebuyer’s tax credit (which is available to many repeat homebuyers) are now under stricter rules. The first-time homebuyer’s tax credit must now be sent with additional documentation proving that you have purchased your home. The necessary documentation includes proof of residency, a signed mortgage statement and driver’s license.

Previously, tax payers had the ability to e-file and receive their refunds promptly. However, due to the e-file system not being able to handle the additional information, taxpayers will not be able to e-file these claims.  This will lead to an estimated four month delay in obtaining your refund. The new requirements are causing the IRS to send back amended returns and asking for the tax payers to send proof.

While the new requirements will dramatically slow the refund process, this is not the fault of the IRS. The people who are claiming the homebuyer’s tax credit under false pretences are really the ones who are responsible for the delay. In October 2009, the first person convicted of this fraud was a tax preparer who falsely claimed the first-time homebuyer’s tax credit for 15 clients.