The End Is Coming – to the 2014 tax year

The end is coming. To the year 2014. Now is the time to start cracking on your 2014 bookkeeping if you are like the many self employed people that tend to shy away from that. “Shy away” is actually a tame term.  Some people would rather poke their eyes out with hot knitting needles than do a bank reconciliation. But November and December is a much less stressful time to get most of your paperwork done.  If you need help, feel free to contact me and I can send you on the right way or do it for you.

Or at least motivate you with scary stories of bad things that happen if you don’t do it.

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2014 Mileage Rates

I know everyone has been anxious for months for the 2014 mileage rates to be released. Well now you can rest easy. Just in time for 2014, the IRS released the new mileage rates today.

  • 56 cents per mile for business miles driven
  • 23.5 cents per mile driven for medical or moving purposes
  • 14 cents per mile for charitable miles

The IRS pointed out that the business and medical rates went down half a cent. Half a cent!  Just once I would like to have a year where I’m not multiplying by half cents. I am telling you sometimes my clients think I am just making these rates up and don’t know what I am doing when I say “the rate for that is twenty three and a half cents a mile”. Yes, that and I have a great deal on the Football Hall of Fame Bridge for you.

penny half 2014 Mileage Rates

Yet another year with mileage rates using half a cent. Taxes are more fun if you use imaginary coins!

Stark county sales tax rate changed again

If you’ve checked your receipts recently, you’ll notice that there’s an extra .25% on the sales tax rate. And if you charge sales tax, hopefully you are collecting the correct rate! It changed as of September to 6.5% for Stark county.

Now if you remember, there was a lot of hubbub out there a while back with the Stark county sales tax rate.  It went up, then down, then up, and now it is up again.  But this isn’t because of the Stark county portion of the sales tax.  Sales tax is made up of a combination of two rates – the state rate and the county rate. The Stark county rate has stayed the same. The Ohio portion went from 5.5% to 5.75% which is part of a bunch of other tax changes at the state level. So the total rate charged in Stark county went from 6.25% to 6.5%.

So the four novelty pens I bought at half off clearance price from Books-a-Million yesterday cost me an extra half cent more than if I had bought them in August. I don’t remember giving them half a cent but that’s their problem. Not as big as a problem as few vendors I saw on First Friday in Canton.  I saw people charging wrong rates or sometimes no rates. If you saw a big black hole walking around sucking the fun out of everything around it, that was me.  Correcting sales tax to strangers is almost up there with correcting people’s grammar.

So ALL the county rates changed. The Ohio Department of Taxation regularly posts an updated sales tax map for your perusal. It is so interesting to read I recommend not reading it before bed as it may keep you up.

Sales Tax Map

Affordable Care Act Calculators and FAQ

I’ve been wondering lately on how the Affordable Care Act will impact my clients. Well the professional tax software I use has come out with a handy website to help people crunch the numbers and answer the important questions.

There is a calculator out there that can come close to what your premium credit might be to help pay for health insurance.  There is also a calculator for the penalty of not having insurance.  There is also a FAQ page that goes over some important details – such as who is exempt and at what level of income you need to have in order to qualify for the credit. You can find it here: Affordable Care Act FAQ and Calculators

If you have any questions on how things may impact you, feel free to contact me.

Canton, Massillon, Stark County, School Districts, Ohio, Federal – They all want taxes! And more…

AICPA Total Tax Insights Web Button Frame Canton, Massillon, Stark County, School Districts, Ohio, Federal   They all want taxes! And more...

We all know about our federal income taxes.  If you don’t, let’s all hope that is because you don’t need to pay any.  But there is more – you would be surprised.  This is a tax calculator that will give you a clearer picture of the number and types of taxes you pay and their estimated amounts.

 

The Total Tax Insights™ calculator (totaltaxinsights.org) is the first-of-a-kind tool brought to you by the CPA profession that will give you a clearer view of your estimated annual tax obligation based on your place of residence across the country. There are more than 20 types of federal, state and local taxes included – some of which may surprise you. When I worked at Revol, I was able to see how many taxes are involved in cell phone service and within the telecommunications industry.  And that was just a slice.

The more you know about the taxes you pay, the greater insight you will have to make better informed financial decisions. You may start thinking differently about a lot of things, such as whether to pay off a mortgage, start a new business or when and how to save for retirement. Give it a try and then let’s talk about whether you are ready to begin the process of planning, managing and building your financial future.

2013 Tax Reminder!

This is a quick reminder to write down your odometer reading since it is the start of the new year.  This way you can calculate your total miles for the year, which is essential if you claim business mileage.  Also, this is used to calculate total mileage for 2012 as well.

If you need a mileage log, send me a quick message.  I have a large stack here to give out!

Happy driving! (And mileage recording)

Tax Planning 2012 Year End

Today is the winter solstice, also the day a certain calendar ends, and also the end of the world. And yet, somehow taxes will remain.  That being said, do you need to do things to reduce your taxes?  Every situation is different so let me mention a few things that have to be done before year end, and one that can be done later.

529 Contributions

In Ohio it is possible to deduct contributions to an Ohio 529 plan.  But the Ohio tax savings on a $2,000 contribution may not be that great, though.  Still, this is a “do before year end” thing. Hey at least you’re trying to save for college.

Selling Stuff At a Loss

This seems like a standby on any tax savings list you read off Yahoo or other web portals. It annoys me, but yes, you can get some savings from selling investments at a loss and yes this is a “do before year end” thing.  Yes there is that $3,000 a year limit but if you are offsetting similar gains you can skirt around those rules if everything falls correctly. The better option is to not have any investments at a loss that will never generate a gain for you, but hey, it is not that easy is it?

Increase Itemized Deductions

This would also fall under the “you have to spend it in order to save it” theory.  For example, charitable contributions can save a lot of taxes if you do it right, but on the other hand, you have to spend money in order to save money. So it depends on your goals. Remember charitable contributions doesn’t have to be cash.  It can also be items such as bags of clothes, a car, stock, car mileage – many different things.  There are different rules for all of them relating to record keeping and limits on how much you can deduct. (They are pretty high though).  If you hit a limit, though, you can always carry forward to next year.

Sometimes you may be able to pay a half of your real estate taxes in the year prior than you otherwise would.  Certain counties will let you do that. If you are on the cusp of itemizing, you can try to move a payment into a current year and use the standard deduction the next year.  That way you get more bang for your standard deduction.

Another item is to pay your Ohio, or other state, estimated taxes before year end. You can deduct taxes paid to states and cities, so if you generally owe or pay estimates, you can pay before December 31st and move that deduction into 2012.

Bonus Depreciation

Currently the 50% bonus depreciation for new assets expires and will not continue into 2013.  So if you operate at a loss, it may make sense to buy new equipment to get the bonus depreciation in 2012.  That is because bonus depreciation works in a loss scenario whereas Section 179 (another way to write of a capital purchase) does not allow a deduction in a loss scenario.

IRA Contribution

This one still remains as a common way to get a tax break without forever parting with your money.  The deadline is not December 31st, though; it is the due date for your tax return without extensions.  So we can see if it will help you while we calculate the return and you don’t have to guess.  Nice isn’t it?

2013 Mileage Rates for Auto Use

The IRS has published the 2013 mileage rates:

56.5 cents per mile for business use, thus perpetuating the IRS belief that somewhere out there is a half cent coin. For a tongue-in-cheek but useful article on business mileage, click here.

14 cents a mile for charitable use, unchanged from last year because everyone knows your car uses less gas when you drive it for charity.

24 cents a mile for medical and moving use. You can find this deduction discussed as part of my commonly overlooked medical deductions article.

The IRS Notice can be found here: 2012-72

Happy driving!

http://www.irs.gov/pub/irs-drop/n-12-72.pdf

Estimated Tax Payment For 3rd Quarter Due Sep. 17th 2012

For everyone who makes individual estimated tax payments, this is just a friendly reminder that the third quarter is due September 17th, 2012.  For information on who needs to make them, why, how, and even how Canton, Massillon, Ohio and other agencies require them, click over to this post: http://www.briankornblum.com/?p=104

Happy estimating!