Blog Archives - Page 3 of 14 - Merrimack Tax Associates

What Does Tax Planning Involve?

Written by Paul Belfiore on January 12, 2024. Posted in Blog, Taxes.

Hudson, NH Resident Has Questions

Tax planning involves analyzing an individual or family’s current financial situation and making the necessary changes to ensure that they can pay the lowest amount in taxes for their circumstances. This may include manipulating the timing of income, purchases, investments including retirement plans and college savings. Through careful tax planning, you may be able to maintain or even reduce your tax bracket. This can make a significant difference to the amount of taxes that you wind up paying. Tax planning is completely legal, and a skilled tax professional can help you to best understand how to manage your finances.

End of the Year Tax Moves to Reduce Your Taxable Income

Written by Paul Belfiore on December 29, 2023. Posted in Blog, Taxes.

Litchfield, NH Resident Looks to Reduce Her Tax Burden

Maximizing 401(k) contributions, charitable donations, and selling underperforming investments are all ways to reduce your taxable income before the end of the year. Another option is to put money aside in a health savings account (HSA) or traditional IRA. You have until December 31st to make these moves, reducing your taxable income for the calendar year.

Who Is Exempt from Paying Taxes?

Written by Paul Belfiore on December 15, 2023. Posted in Blog, Taxes.

Milford, NH Resident Asks an Important Question

There are some groups that are exempt from paying taxes. These include qualified 501(c)3 non-profit organizations, US citizens working abroad, and some low-income individuals. While most of us will have to pay some amount in taxes throughout the year, there are some circumstances when no taxes will be owed. For those with low or no income, lots of deductions, or many dependents taking advantage of the Earned Income Tax, you may wind up with no tax bill for the year.

What are Some Tax Deductions Available for Students?

Written by Paul Belfiore on December 1, 2023. Posted in Blog, Taxes.

Nashua, NH Student Looks for Student Tax Breaks

The IRS offers several tax breaks for college students, as well as graduates who are paying off student loans. The American Opportunity Tax Credit (AOTC) is available for those enrolled in their first four years of college courses. Taxpayers paying for college, either the student themselves, a parent, or spouse, can claim a tax credit of 100% on the first $2,000 spent on eligible education expenses. The Lifetime Learning Credit is another advantage for current students. This differs from the AOTC in that graduate students can be eligible, and you are not required to be enrolled for at least half of the year. Those that have student loans, whether current or former students, can deduct the interest paid on the student loans from their taxes.

Tax Breaks Available for Caregivers Caring for Elderly Parents

Written by Paul Belfiore on November 17, 2023. Posted in Blog, Taxes.

Amherst, NH Resident Seeks Information

If you are the caregiver for your elderly parent, you may be eligible for tax deductions. The first tax credit that you may be able to utilize is the child and dependent care tax credit. If you are paying for care for your elderly parent while you are working, these expenses may be eligible. You can claim up to $3,000 for one person or $6,000 for two. A second tax credit is available for other dependents, with up to $500 in tax credits. To be eligible for this the parent must be a US citizen with a gross income that is not greater than $4,400 and have lived with you more than 50% of the year.

How Gambling Wins Can Affect Your Taxes

Written by Paul Belfiore on October 27, 2023. Posted in Blog, Taxes.

Hollis, NH Resident Hits the Jackpot

Experiencing a big win, whether in a casino, poker tournament, or through some other gambling venture, can feel great. It is important to know that the money that you earn through gambling is taxed by the IRS. By planning accordingly, you can be sure you won’t have any costly surprises at the end of the year. Gambling winnings are considered taxable income in most states, whether this is paid by cash, check, or electronically. This should be accounted for in the income reported for in the year that the money was won, paying the appropriate taxes on this windfall.

How Lifetime Giving Can Help Reduce Estate Taxes

Written by Paul Belfiore on October 13, 2023. Posted in Blog, Taxes.

Amherst, NH Family Plans Ahead for Their Children’s Inheritance

If you have a sizable estate, it can be beneficial to start giving it to your loved ones now, rather than waiting until you pass away. You can give any number of people up to $17,000 each year without incurring the gift tax. For couples this amount is $34,000. This can allow families to begin accepting their inheritance while their loved ones are still alive, receiving money without having to pay estate taxes. Another benefit of this type of lifetime giving is that you can have the joy of sharing your wealth with family now.

How to Determine Your Tax Rate

Written by Paul Belfiore on September 29, 2023. Posted in Blog, Taxes.

Goffstown, NH Resident Has Questions

The tax bracket that you fall into determines the tax rate that you will pay on your income. There are seven tax brackets, ranging from the bottom at 10% to the highest rate of 37%. Factors that can affect your tax bracket include your total income, total adjusted income, number of dependents, tax credits, whether you are filing single or married, and many other financial factors. Each year the IRS releases updated tax brackets, with the accompanying tax rate for each. Keep in mind that all your income is not taxed at the highest rate, only that which exceeds the previous brackets pushing your additional income into a higher tax rate that will be taxed at this new rate.

Can I Electronically Pay My Estimated Taxes?

Written by Paul Belfiore on September 15, 2023. Posted in Blog, Taxes.

Nashua Residents Looks to Simplify the Process

Estimated tax payments are required for those self-employed individuals, with quarterly payments sent in to cover taxes on income earned for that period. While you can mail a check to cover these payments, you can also pay these online to ensure that they are received on time by the IRS. This will keep you from incurring a penalty for a missed or late estimated tax payment. This can easily be done through the IRS’ website or using the mobile app IRS2Go. The IRS will retain records of the payments and you can account for this in your end of the year tax filing.

What Are Above-the-Line Tax Deductions?

Written by Paul Belfiore on August 25, 2023. Posted in Blog, Taxes.

Hudson, NH Resident Seeks Clarification

Above-the-line tax deductions are those qualified items that are deducted from gross income to
calculate adjusted gross income. The most common above-the-line deductions include IRA and other
qualified retirement contributions, healthcare expenses, business expenses, and student loan interest.
Above-the-line deductions can be taken even if you are not itemizing deductions when filing taxes. This
allows those who have more advantage taking the standard deduction versus itemizing to still take
advantage of these above-the-line tax savings. To calculate this, all above-the-line deductions are
combined and are then used to determine your adjusted gross income, reducing overall taxable income.
This is separate from the standard deduction or itemized deductions, which can then be taken from the
adjusted gross income.