Dear Client:
If you own a vehicle in NYC, you need to know about some recent tax changes that will affect your Manhattan income taxes. The IRS has issued the depreciation deduction limitations and lease inclusion amounts for auto mobiles, trucks and vans first purchased and used in 2010. Additionally, the IRS released the annual income inclusion amounts for vehicles first leased in 2010. The basic 2010 depreciation limits for passenger automobiles, trucks and vans are higher than the respective depreciation limits for 2009.

Passenger automobiles. The maximum depreciation limits for passenger automobiles first placed in service during the 2010 calendar year are:
•    – $3,060 for the first tax year;
•    – $4,900 for the second tax year;
•    – $2,950 for the third tax year; and
•    – $1,775 for each tax year thereafter.
Trucks and vans. The maximum depreciation limits for trucks and vans first placed in service during the 2010 calendar year are:
•    – $3,160 for the first tax year;
•    – $5,100 for the second tax year;
•    – $3,050 for the third tax year; and
•    – $1,875 for each tax year thereafter.

Leases. Lease payments for vehicles used for business or investment purposes are deductible in proportion to the vehicle’s business use. However, lessees must include a certain amount in income during the year the vehicle is leased to partially offset the amounts by which the lease payments exceed the luxury auto limits. The IRS has released tables that identify the income inclusion amounts for passenger automobiles, trucks and vans with lease terms beginning in 2010. These amounts can be found on the IRS’s website, www.irs.gov , and in Revenue Procedure 2010-18.

Please call our office of small business CPAs in manhattan at your earliest opportunity if you have questions about the 2010 vehicle depreciation dollar limits or other business vehicle expenses and how they may potentially affect your New York income taxes or Manhattan based S-corp, LLC or other type of NYC small business.

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

If you have young children, you should consider the cost of higher education well in advance, and how it will effect your NYC income taxes. Two educational savings vehicles allow individuals to save for education on a tax-favored basis in New York: a qualified tuition program and a Coverdell education savings account. Also, you may be able to exclude from your  Manhattan income taxes a limited amount of bond interest received from qualified U.S. savings bonds in the year you pay higher education expenses. Parents may also use funds from an individual retirement account or a traditional form of savings to pay tuition costs. Generally, the payment of higher education costs is supplemented with scholarships, loans and grants. However, having a viable plan as early as possible in a child’s life will make maximum use of a family’s financial resources and may provide some New York City income tax benefit.

Section 529 plans. The Tax Code allows New York State and some educational institutions to offer so-called “529″ plans (known for the section of the Tax Code that governs them). They are also sometimes called qualified tuition programs (QTPs). They allow you to either prepay or contribute to an account for paying a student’s post-secondary education expenses. An eligible educational institution generally includes colleges, universities, vocational schools or other post-secondary educational institutions. In addition, distributions from state programs, even to the extent of earnings, are now entirely tax-free to the extent used for qualified higher education expenses. This tax-free treatment also has been available for distributions from private college and university programs.

Coverdell education savings accounts. Coverdell education savings accounts (also sometimes called education IRAs) are similar to IRAs. You can save today for future educational expenses, not just higher educational expenses. Funds in a Coverdell ESA can also be used for K-12 and related expenses. The maximum annual Coverdell ESA contribution is $2,000 per beneficiary. Contributions are not deductible by the donor and distributions are not included in the beneficiary’s income as long as they are used to pay for qualified education expenses. Earnings accumulate tax-free. Contributions generally must stop when the beneficiary turns age 18, except for individuals with special needs. Parents can maximize benefits, however, by transferring older siblings’ accounts for use by a younger brother, sister or first cousin, thereby maximizing the tax-free growth period. Excess contributions are subject to an excise tax on NYC income tax returns.

Although the amounts of adjusted gross income allowed for a contributor to a Coverdell ESA are subject to phase-out, the limits are generous. The annual contribution starts to phase out for married couples filing jointly with modified AGI at or above $190,000 and less than $220,000 and at or above $95,000 and less than $110,000 for single individuals.

Undoubtedly, some of these provisions will be more important to you than others, depending upon your personal circumstances. If you would like to explore how these opportunities can work for you and how they may effect your future income tax returns in New York, please do not hesitate to call.

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

Generally, if you use your vehicle in pursuit of a trade or small business, you are allowed to deduct the ordinary and necessary expenses incurred while operating the vehicle on your new York income tax return. However, any expenses associated with the personal use of the vehicle are not deductible on your NYC income taxes. For purposes of these deductions, “car” includes a passenger vehicle, van, pickup or panel truck.

Personal vs. business miles. Business use of your car can include traveling from one work location to another work location within your New York City tax home area; visiting customers; attending a business meeting away from the regular workplace; and traveling from home to a temporary workplace if you have one or more regular places of work. The costs of travel between home and a regular place of work, however, are nondeductible commuting expenses and you will not be able to deduct them on your Manhattan income tax return.

Standard mileage rate vs. actual cost method. In lieu of proving the actual costs of operating an automobile owned by them, employees and small business owners may compute the deductible costs for their business use of an auto using a standard mileage rate. The 2010 standard mileage rate is 50 cents per mile. You may not depreciate your car or deduct lease payments on your NYC income taxes if you use the standard mileage rate method. If you use the actual cost method, you may take deductions for depreciation, lease payments, registration fees, licenses, gas, insurance, oil, repairs, garage rent, tolls, tires and parking fees on your income taxes in Manhattan. Regardless of the method used, if the vehicle is driven for personal as well as business purposes, only expenses or mileage attributable to the percentage of business use are deductible. There are separate considerations involved in leasing a car for your New York small business.

Substantiation. If you are using your car for business purposes, whether owned or leased, proper recordkeeping is critical. The recordkeeping requirements vary depending upon which method you use. If you use the standard mileage rate, you should keep a daily log showing the miles traveled, destination and business purpose. Recordkeeping under the actual cost method is somewhat more onerous. You should also keep a mileage log if you use the actual cost method in order to establish business use percentage. In addition, you must keep receipts, invoices and other documentation to verify expenses. Finally, you must be able to prove the original cost of the vehicle and the date it was placed in service for business use in order to claim depreciation on your income tax return in New York City.

Motor vehicle credits. Since 2005, Congress has enacted numerous tax incentives to encourage development of alternative fuels for motor vehicles, including the alternative motor vehicle credit (AMV), the alternative fuel vehicle refueling property credit, the plug-in electric vehicle credit, and the plug-in electric drive motor vehicle credit. The AMV credit is actually the total of the following five credit components:
•    the qualified fuel cell motor vehicle credit,
•    the advanced lean burn technology motor vehicle credit,
•    the qualified hybrid motor vehicle credit,
•    the qualified alternative fuel motor vehicle credit, and
•    the plug-in conversion credit.

The technology and federal emission standards required for each vehicle credit varies, as well as the credit amounts and the effective dates.

Vehicle fringe benefits. The fact that an employer allows an employee to use an employer-provided car for personal purposes generally does not deprive the employer of a vehicle expense deduction on their Manhattan income taxes. An employer who provides a vehicle to an employee as a fringe benefit may use one of the special valuation rules, rather than the fair market value (FMV) of leasing a comparable car, to calculate the amount of the benefit that is attributable to the employee’s personal use of the car. These special rules include the lease, cents-per-mile, commuting, and fleet-average valuation rules. An employer is not required to use the same valuation rule for all of the vehicles that are provided to employees. However, once a valuation method for a particular vehicle is elected, it must be used for New York income tax, employment tax, and reporting purposes for all employees who share the vehicle, as well as those who use it in subsequent periods.

Employers must report their employees’ personal use of the car on their W-2, Wage and Tax Statement. They are not required to withhold  Manhattan income taxes on this income, although social security and railroad retirement taxes must be withheld. An election not to withhold income taxes may be made on an employee-by-employee basis. However, affected employees must be notified in writing by the later of January 31st of the applicable year, or 30 days after the day on which the employee receives a car.

A small business owner in New York with an employer-provided car must substantiate the business use of the car with adequate records or evidence in order to claim a fringe benefit exclusion from income for personal use of the car. An employee who uses a personal car in the performance of services for his or her employer is entitled to deduct the car expenses on their New York income taxes if the car is used for the convenience of the employer, and is required as a condition of employment. Any unreimbursed employee expenses attributable to such use are deductible only to the extent that they exceed two percent of the employee’s adjusted gross income (AGI).

Whether you are an a small business owner, a S-corporation, a LLC, an employee, or a self-employed individual, we would like to evaluate the business use of your vehicle(s) in order to provide guidance in claiming and substantiating these expenses towards your New York City income taxes. Please call us at your earliest convenience to arrange an appointment with one of our experienced small business CPAs in Manhattan.

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

Breaking news from our Manhattan income tax CPAs: Starting July 1, 2010, many mall businesses offering tanning services in New York must collect a 10 percent excise tax on the tanning services they provide. This excise tax requirement is part of the Affordable Care Act that was enacted in March 2010.

Here are nine tips on the tanning excise tax that providers must collect.
1.       Businesses providing ultraviolet tanning services must collect the 10 percent excise tax at the time the customer pays for the tanning services.
2.       If the customer fails to pay the excise tax, the tanning service provider is liable for the tax.
3.       The tax does not apply to phototherapy services performed by a licensed medical professional on his or her premises.
4.       The tax does not apply to spray-on tanning services.
5.       If a payment covers charges for tanning services along with other goods and services, the other goods and services may be excluded from the tax if they are separately stated and the charges do not exceed the fair market value for those other goods and services.
6.       If the customer purchases bundled services and the charges are not separately stated, the tax applies to the portion of the payment that can be reasonably attributed to the indoor tanning services.
7.       The tax does not have to be paid on membership fees for certain qualified physical fitness facilities that offer indoor tanning services as an incidental service to members without a separately identifiable fee.
8.       Tanning service providers must report and pay the excise tax on a quarterly basis.
9.       To pay the tax, businesses must file IRS Form 720, Quarterly Federal Excise Tax Return using an Employer Identification Number assigned by the IRS. Businesses that don’t already have one can apply for an EIN online at IRS.gov.

If you have any questions about this issue, or how it may affect your small business tax preparation in New York City, call one of our Manhattan income tax CPAs today.

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

Attention New York City taxpayers: The recently passed Reconciliation Act of 2010 imposes a new 3.8% Medicare contribution tax on the investment income of higher-income individuals. Although the tax does not take effect until 2013, it is not too soon to examine methods to lessen the impact of the tax for those of you who are preparing your small business taxes in Manhattan.

Net investment income. Net investment income, for purposes of the new 3.8 percent Medicare tax as applied to New York, includes interest, dividends, annuities, royalties and rents and other gross income attributable to a passive activity. Gains from the sale of property that is not used in an active business and income from the investment of working capital are treated as investment income as well. However, the tax does not apply to nontaxable income, such as tax-exempt interest or veterans’ benefits. Further, an individual’s capital gains income will be subject to the tax. This includes gain from the sale of a principal residence, unless the gain is excluded from income under Code Sec. 121, and gains from the sale of a vacation home. However, contemplated sales made before 2013 would avoid the tax.

The tax applies to estates and trusts, on the lesser of undistributed net income or the excess of the trust/estate adjusted gross income (AGI) over the threshold amount ($11,200) for the highest tax bracket for trusts and estates, and to investment income they distribute.

Deductions. Net investment income for purposes of the new 3.8 percent tax is gross income or net gain, reduced by deductions that are “properly allocable” to the income or gain. This is a key term that the Treasury Department expects to address in guidance, and which we will update you on developments. For passively-managed real property, allocable expenses will still include depreciation and operating expenses. Indirect expenses such as  Manhattan tax preparation fees may also qualify.

For capital gain property, this formula puts a premium on keeping tabs on amounts that increase your  New York property’s basis. It also puts the focus on investment expenses that may reduce net gains: interest on loans to purchase investments, investment counsel and advice, and fees to collect income. Other costs, such as brokers’ fees, may increase basis or reduce the amount realized from an investment. As such, you may want to consider avoiding installment sales with net capital gains (and interest) running past 2012.

Thresholds and impact. The tax applies to the lesser of net investment income or modified AGI above $200,000 for individuals and heads of household, $250,000 for joint filers and surviving spouses, and $125,000 for married filing separately. MAGI is AGI increased by foreign earned income otherwise excluded under Code Sec. 911; MAGI is the same as AGI for someone who does not work overseas.
Example. Jim, a single individual, has modified AGI of $220,000 and net investment income of $40,000. The tax applies to the lesser of (i) net investment income ($40,000) or (ii) modified AGI ($220,000) over the threshold amount for an individual ($200,000), or $20,000. The tax is 3.8 percent of $20,000, or $760. In this case, the tax is not applied to the entire $40,000 of investment income.
The tax can have a substantial impact if you have income above the specified thresholds. Also, don’t forget that, in addition to the tax on investment income, you may also face other tax increases proposed by the Obama administration that could take effect in 2011. The top two marginal NYC income tax rates on individuals would rise from 33 and 35 percent to 36 and 39.6 percent, respectively. The maximum tax rate on long-term capital gains would increase from 15 percent to 20 percent. Moreover, dividends, which are currently capped at the 15 percent long-term capital gain rate, would be taxed as ordinary income. Thus, the cumulative rate on capital gains would increase to 23.8 percent in 2013, and the rate on dividends would jump to as much as 43.4 percent. Moreover, the thresholds are not indexed for inflation, so a greater number of Manhattan taxpayers may be affected as time elapses.

Exceptions. Certain items and taxpayers are not subject to the 3.8 percent tax. A significant exception applies to distributions from qualified plans, 401(k) plans, tax-sheltered annuities, individual retirement accounts (IRAs), and eligible 457 plans. There is no exception for distributions from nonqualified deferred compensation plans subject to Code Sec. 409A.

The exception for distributions from retirement plans suggests that potentially taxed investors may want to shift wages and investments to retirement plans such as 401(k) plans, 403(b) annuities, and IRAs, or to 409A deferred compensation plans. Increasing contributions will reduce income and may help you stay below the applicable thresholds. Small business owners preparing their taxes in Manhattan may want to set up retirement plans, especially 401(k) plans, if they have not yet established a plan, and should consider increasing their contributions to existing plans.

Another exception covers income ordinarily derived from a trade or business that is not a passive activity under Code Sec. 469, such as a sole proprietorship. Investment income from an active trade or business is also excluded. However, SECA (Self-Employment Contributions Act) tax will still apply to proprietors and partners. Income from trading in financial instruments and commodities is also subject to the tax. The tax does not apply to income from the sale of an interest in a partnership or S corporation, to the extent that gain of the entity’s property would be from an active trade or business. The tax also does not apply to business entities (such as corporations and limited liability companies), nonresident aliens (NRAs), charitable trusts that are tax-exempt, and charitable remainder trusts that are nontaxable under Code Sec. 664.

Please contact our office if you would like to discuss the tax consequences to your investments of the new 3.8 percent Medicare tax on investment income. If you are a S-corp, C-corp, LLC or other form of small business in New York, we are the CPA firm for you. We have years experience dealing with small business tax preparation in NYC, and we will be able to assist you in all of your NYC tax needs.

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

The life of a freelancer in New York City isn’t one to take lightly: You perform on deadline, then wait maybe two weeks, or maybe two months, for a check. Whether it’s arts, writing, information technology, web design, or anything else, a career in a field that requires that most of your income shows up whenever someone gets around to paying you can be stressful enough without worrying about doing your New York taxes.

It can be confusing trying to figure out which Manhattan tax forms to use, let alone what counts as a legitimate expense and what does not. To avoid getting in trouble, maybe you don’t bother with it at all. Perhaps some years you feel like you’ve poured a bunch of money down a hole and didn’t take advantage of some resources or  NYC tax breaks that may be out there for you.On top of that, some months you hit the jackpot; others you just barely squeak by. It’s the same story annually.
New York City CPA Jonathan Medows understands the fluctuating, potentially unstable world of freelance. Plenty of his NYC clients make a living like this, and he can help figure out how to straighten out what may feel like a giant burden with the IRS. He knows it can be difficult to manage money or plan a financial future with this kind of  NYC tax set-up, and can help advise you accordingly without talking down to you like some of the larger firms.
And if you’ve put off your Manhattan taxes for a couple years or so, don’t get so scared of how much it’s going to cost that you decide to just ignore it in hopes of it going away. Jonathan Medows offers affordable, knowledgeable services, and can help get you sorted out.  Call his Manhattan office today for a consultation.

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

If you are doing your small business taxes in NYC, there are some recent tax changes that you need to know about.  Even if you are doing your taxes outside of Manhattan, these changes will affect you.


Recently the Internal Revenue Service revised Form SS-4, the Application for Employer Identification Number, to clearly identify the applicant’s true owner. Effective January 2010, all mail, fax, phone, and electronic EIN applications must disclose the name and taxpayer identification number of the true “responsible party” for the entity requesting an EIN.


For an EIN applicant that is publically traded or is registered with the Securities and Exchange Commission, the “responsible party” is the principal officer, general partner, grantor, owner of a disregarded entity, owner, or trustor, depending on the business entity of the applicant. For all other entities, the “responsible party” is the person who can control, manage, or direct the entity and the disposition of the entity’s funds and assets.


A nominee is an entity with delegated authority to act in name only and can never be the “responsible party” for the Form SS-4 application. The IRS does not accept the use of nominees to obtain EINs. The SS-4 must be signed by an individual with the authority to legally bind the entity; therefore, it cannot be signed by a nominee.


Prior to the SS-4 revision, taxpayers in Manhattan obtained EINs using nominee individuals for the EIN application process. Entities that used nominees on their applications should consider updating the information shown on the original application.

Third party designees filing online applications must retain a complete copy of the paper Form SS-4, signed by the responsible party, and a signed authorization statement, for each EIN application filed with the IRS.
Using nominees in the EIN application process prevents the IRS from gathering appropriate information on entity ownership. It may also facilitate tax non-compliance by entities and their owners. Clearly identifying an entity’s true owner makes it difficult for taxpayers to conceal their income and assets. The IRS will pursue penalties, injunctions, or other enforcement action to prevent the misuse of EIN applications.


If you are doing your small business taxes in New York City, this very well may affect you. If you are at all unsure as to how to react to the SS-4 changes, it would be the safe bet to consult a CPA that is a veteran of New York Taxes.



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

If you and your spouse are contemplating starting a small business together, you are probably wondering what to do about your New York income taxes. First, you have to determine what kind of relationship you and your spouse will have in the relationship. Will you be partners, or will one of you be more of an employee? The answer determines how you’ll go about filing your income taxes in Manhattan.

According to the IRS, A spouse is considered an employee if the first spouse significantly controls the business in terms of management decisions and the second spouse is under the direction and control of the first spouse. If this is the relationship that you will have in your small business, then the second spouse is an employee subject to income tax and FICA (Social Security and Medicare) withholding.

If both spouses have an equal say in the business, provide equal services to the business, and contribute capital to the business, then your business is a partnership type of relationship and the business’s income should be reported on Form 1065, U.S. Return of Partnership Income.

However, there is also a third option for Husband and Wife income taxes in NYC. According to the  Small Business and Work Opportunity Tax Act of 2007, there is a qualified joint venture  option for businesses whose only members are a husband and wife filing a joint income tax  return not to be treated as a partnership for Federal tax purposes. A qualified joint venture is a joint venture involving the conduct of a trade or business, if (1) the only members of the joint venture are a husband and wife, (2) both spouses materially participate in the trade or business, and (3) both spouses elect to have the provision apply.

Under this law, a qualified joint venture conducted by a husband and wife who file a joint return is not treated as a partnership for Federal tax purposes. All items of income, gain, loss, deduction and credit are divided between the spouses in accordance with their respective interests in the venture. Each spouse takes into account his or her respective share of these items as a sole proprietor.
This being the case, it is anticipated that each spouse would account for his or her respective share on the appropriate form, such as Schedule C.  For purposes of determining net earnings from self-employment, each spouse’s share of income or loss from a qualified joint venture is taken into account just as it is for Federal income tax purposes under the provision (i.e., in accordance with their respective interests in the venture).
This generally doesn’t increase the total tax on the return, but it does give each spouse credit for social security earnings on which retirement benefits are based. However, this may not be true if either spouse exceeds the social security tax limitation. For more information on filing your husband and wife business income taxes in NYC, contact an experienced  manhattan CPA.

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

A note we received in April 2010 from a satisfied client:

Hi. I’m a small business owner and also freelance here and there and I have a confession to make: I didn’t do my taxes for three years straight. I didn’t file any extensions, I didn’t make any late payments, I didn’t make any arrangements with a CPA—I just completely blew my tax returns off.

For some reason I thought all the sorting and paperwork would just be too complicated. I moved across state lines a couple times before ending up in New York City. I knew I’d have to file a couple of different Schedule Cs, and a Schedule M, a handful of 1099s from prior staff employment, and then all those other forms that have letters and numbers… I just didn’t want to deal with my income tax returns.

It’s funny (or not), because I’d done this once before: I went five years without filing taxes and the IRS caught up with me. They garnished my wages and imposed pretty hefty penalties, money I never got back—and those five years, as it turned out, the government owed me. It was pretty scary and out of my control and I thought that was enough to teach me a lesson. Lucky for me, I decided to take action before it happened again; I contacted Manhattan CPA Jonathan Medows and he helped sort me out.

Maybe you are thinking this is one of those made-up infomercial type stories designed to get you interested in what someone has to offer. No. This is true. I did my research, decided Jonathan Medows could best help me sort through the late filing nightmare I’d created for myself, called him, and he got me into his Manhattan office ASAP.

Jonathan Medows was thorough and knowledgeable and quick, and calmed me down when I was about to have a panic attack. He told me I wasn’t in as big of a bad situation as I thought I was, and figured out a plan for me that was manageable. So if you’re in NYC, sitting there worrying about the tax problems you’re causing yourself because it’s now May and you haven’t done a thing—for several years—I’d suggest you call the office of Certified Public Accountant Jonathan Medows and have him sort you out.

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

Tax penalties can take away everything you worked so hard for throughout the year. If you know what the most popular reasons are that taxpayers are penalized, then you may be able to avoid it next year and save yourself money.

If you are a freelancer, then you need to find a CPA for freelancers New York City. If you do not pay enough of the estimated income tax then you may be penalized. This is the most common reason why tax payers end up paying penalties.

If you do not file your income tax NY by the deadline and do not file for an extension then you may end up paying a penalty. The IRS gives a deadline of April 15 to get your taxes done and if you don’t then the consequences are high. They take this very serious. When you know you have to file or pay and you don’t file or pay by the deadline, the IRS looks at the situation as though you are refusing to pay your bill that you owe.

If you have a NY income tax liability to pay then you need to pay it by the deadline or else you will be penalized. The interest charges alone may make it seem like you are constantly paying on something that you cannot pay off. Make sure that you pay these on time so you don’t have to worry about being penalized.

If you must pay income tax penalties, don’t feel like you are alone. Almost everyone will pay these penalties every now and then. It’s important to remember that the more you delay it the worse it can be for you. The penalty for filing late is between 5% and 25% for each month you do not file. This may not seem like a lot but it is over time.

To avoid these penalties, you need to prepare your taxes by April 15. If you cannot prepare them by this date then you need to file an extension. Filing an extension will let the IRS know that you are taking this serious and you are going to be responsible for filing however, you just need more time. In most cases, they understand and grant the extension but you must make sure that you receive acknowledgement of your extension.

If you are in doubt, don’t put it off. Contact your NYC CPA to have them look over your paperwork and see if you are avoiding penalties by filling out your papers correctly.

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