Tag: taxes

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.

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.

Tax Benefits for Real Estate Investors

Written by Paul Belfiore on July 28, 2023. Posted in Blog, Taxes.

Hollis, NH Potential Investor Looks for Tax Advice

Real estate is a great way to diversify your investments, generating a steady flow of passive income.
There are also many tax benefits to real estate investing, including writing off maintenance expenses
done on the property, property taxes, insurance, mortgage interest, and even property management
fees. These deductions can significantly reduce the taxable income generated from rental properties.
You are also able to take advantage of depreciation. This can be deducted each year, taking into
consideration how much the property is worth, the time period, and a designated depreciation method
that will be used.

How Are Monetary Gifts Taxed?

Written by Paul Belfiore on July 14, 2023. Posted in Blog, Taxes.

Amherst, NH Couples Looks to Share Their Wealth with Their Children

Monetary gifts to any one individual that exceed the annual limit of $17,000 will be subjected to the gift
tax. This tax is typically paid by the giver, as opposed to the recipient. This $17,000 amount was set for
2023 but can vary from tax year to tax year. There is also a lifetime exclusion which is set at $12.92
million. Amounts gifted that exceed this amount given to the same person will likely be taxed. The gift
tax is only applicable on monies or assets that exceed the annual exclusion or lifetime exclusion. The tax
rate varies from individual to individual but can be anywhere from 18% to 40%.

How Many Allowances Should I Claim on My W4?

Written by Paul Belfiore on June 30, 2023. Posted in Blog, Taxes.

Londonderry, NH Resident Looks to Start New Job on the Right Foot

When you start a new job, to get paid via the company’s payroll each new employee will need to fill out
a W4 form. One of the most common mistakes on this form is how many allowances to claim. The
more allowances claimed, the fewer taxes will be withheld from your paycheck. However, if this
number is not correct for your tax filing at the end of the year you may be surprised with a hefty bill in
taxes that you owe. If you are single with one job or married filing as the of household you may want to
claim 1. Single individuals with more than one job or those married and dividing total allowances may
choose to claim 2. Those married with minor children living at home, will often choose three
allowances.

How are Dividends Taxed?

Written by Paul Belfiore on June 16, 2023. Posted in Blog, Taxes.

Nashua, NH Resident Wants to Be Prepared for the End of the Year

Dividends are typically considered taxable income for the year that they are received and will be taxed
at the end of the tax year. Even if the money was not received in cash, being reinvested buying more
shares, it will still need to be reported and will most likely be subject to taxes. How this money is taxed
depends on your taxable income and filing status. The dividends will be considered either nonqualified
or qualified. Qualified dividends usually have a lower tax rate, 0% 15%, or 20% depending on your
income level. Nonqualified dividends are taxed at the same rate as your regular income.