Blog Archives - Page 8 of 14 - Merrimack Tax Associates

How Will Living and Working in Different States Affect Your Taxes?

Written by Paul Belfiore on November 26, 2021. Posted in Blog, Taxes.

Hollis, NH Residents Wonders How New Job Will Affect Her Tax Filing

Living and working in different states can pose an interesting challenge when filing taxes. In most cases you will need to file multiple tax returns, a resident tax return for that state that you live in and a non-resident return for the state where you work. Filing two separate tax returns does not mean that you will have to pay two separate tax bills. On your resident state tax return you will report your tax liability from your non-resident tax return. All states allow filers to claim a tax credit based on taxes paid to other states.

Are COVID-19 Tests and PPE Tax Deductible?

Written by Paul Belfiore on October 29, 2021. Posted in Blog, Taxes.

Nashua, NH Resident Looks for Tax Savings

The IRS has stated that COVID-19 home testing kits can be considered a medical expense under the tax code. Personal protective equipment (PPE) that is used primarily for preventing the spread of COVID-19 also falls under this tax code. This includes masks, hand sanitizer and sanitizing wipes. However, to be eligible for deducting these items on your taxes the total for all medical and dental expenses must exceed 7.5% of your adjusted gross income.

What are the Tax Advantages of Real Estate Investing?

Written by Paul Belfiore on October 15, 2021. Posted in Blog, Taxes.

Amherst, NH Resident Considers Real Estate

When investing in real estate properties, you can deduct the money paid in property taxes, property insurance and mortgage interest on your taxes. Money that goes to improve or repair a rental property can be deducted from your taxes as well. This will greatly reduce the taxable income that you make from your rental property, making this a more lucrative investment.

How to Prepare Your Taxes for an Income Increase

Written by Paul Belfiore on September 24, 2021. Posted in Blog, Taxes.

Milford, NH Resident Expects a Big Bonus

Any significant changes to your annual income can push you to the next tax bracket. This means that the additional money received may be taxed at a higher rate. The good news is that the original income that you were anticipating throughout the year will not be taxed at a higher rate. The federal tax system in the United States is progressive, which means as your income increases only these additional portions that exceed the limits of a current tax bracket are taxed at a higher rate.

How Will the Child Care Deduction Affect Your Taxes?

Written by Paul Belfiore on September 10, 2021. Posted in Blog, Taxes.

Nashua, NH Resident Looks for Answers

Child tax credit payments began over the summer and will continue through the year for qualifying families. When you go to file your 2021 taxes, you will only be eligible for half of the normal child care credit because the other half was already received throughout the second half of 2021. Since the deduction is based off of your 2020 income, a significant increase in your income may leave you owing some of the money back to the IRS if it exceeds the thresholds set.

How Will Receiving a Large Sum of Money Affect Your Taxes?

Written by Paul Belfiore on August 27, 2021. Posted in Blog, Taxes.

Amherst, NH Resident Looks for Answers

If you receive a large sum of money, the tax rate will depend on why you received the money. Money that is received through the lottery or other winnings is generally taxed at your standard tax rate. When the windfall is received because of selling real estate properties or a business, the rate will usually fall under the long-term capital gains rate, if the assets have been in your possession long enough. Money received as an inheritance may be subject to the inheritance tax depending on the state you live in. New Hampshire does not have an estate tax.

An Amherst resident recently received a large amount of money from his employer. Concerned about how this would affect his taxes at the end of the year, he sought the advice of Merrimack Tax Associates.

The Difference Between Tax-Deferred and Tax-Exempt Retirement Accounts

Written by Paul Belfiore on August 13, 2021. Posted in Blog, Taxes.

Hudson, NH Resident Seeks Guidance

A tax-deferred account offers immediate tax deductions for the full amount of the contribution. Future withdrawals from a tax-deferred account are taxed at your ordinary income rate. Tax-exempt accounts do not offer any tax benefits at the time of contribution. However, any future withdrawals are tax-free including returns on the investment.

A resident in Hudson was looking for the best way to begin saving for retirement. Confused about the difference between tax-deferred and tax-exempt accounts, he sought the advice of Merrimack Tax Associates.

How Does Paying Off a Mortgage Affect Your Taxes?

Written by Paul Belfiore on July 30, 2021. Posted in Blog, Taxes.

Hudson, NH Homeowner Looks for Advice

The interest paid on a mortgage is tax-deductible. When you pay off your mortgage, you will no longer be paying interest and will lose this tax deduction. This will make your taxes go up as a result of eliminating this mortgage interest deduction. Similarly, as you continue to pay your mortgage down over the years the amount of interest paid annually, and the tax deduction that goes along with it, will be reduced.

What Happens If You Miss an Estimated Tax Payment?

Written by Paul Belfiore on July 16, 2021. Posted in Blog, Taxes.

Amherst, NH Residents Asks for Help

For each month that your estimated tax payment is due, but not paid, the IRS charges a 0.5% penalty. As the months go by, this penalty percentage will increase to a maximum of 25% of the taxes owed. Quarterly estimated tax payments are due April 15^th, June 15^th, September 15^th, and January 15^th of the following year. When the date falls on a weekend, the payment is due the following weekday. A missed payment is seen by the IRS as an underpayment and is treated as such.