Blog Archives - Merrimack Tax Associates

How Does Tax Debt Work Posthumously?

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

Nashua Resident Looks for Advice After Losing a Loved One

If there is an outstanding tax debt at the time of death, the IRS can place a federal lien against the
estate. The taxes must then be paid before any other debts or accounts. If this is not done, then the IRS
can pursue payment from the legal representative of the deceased person. Unpaid federal taxes have a
lifespan of ten years. If the tax debt exceeds ten years, then this is no longer able to be collected. If the
debt is under ten years, the family of the deceased will be liable for payment to the IRS.

What are the Tax Benefits of Owning a Home?

Written by Paul Belfiore on March 3, 2023. Posted in Blog, Taxes.

Amherst, NH Homeowners Looks for Future Tax Advantages

There are many tax advantages for homeowners, particularly when itemizing your taxes. If you have a mortgage on your home the interest paid each year can be deducted from your taxable income. This is only available if you are itemizing your taxes, as opposed to taking the standard deduction. If you have a home equity loan, this interest can also be deducted when filing your taxes. For those self-employed individuals, the space in the home used for business purposes can be deducted including heat, utilities, and insurance, saving you money on your overall tax bill.

How Can You Get Your Tax Refund Quickly?

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

Nashua, NH Resident Looks for a Fast Turnaround on His Return

One of the best ways to make sure you get your tax refund as quickly as possible is to file your return electronically. This eliminates the time during transit, getting your tax return at the front of the line. There is a significant backlog for paper returns and yours is unlikely to be prioritized. You should also request a direct deposit for your refund, instead of waiting for a check to be mailed.

Can Health Insurance Payments Be Deducted from Your Taxes?

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

Brookline, NH Resident Looks for Answers

For those who are self-employed, health insurance premiums paid throughout the year can be deducted on their taxes. Even if you do not item deductions on Schedule A, these health insurance premiums can still be deducted on your tax return. For W-2 employees you can deduct out-of-pocket medical expenses and health insurance premiums only if you take the itemized deduction on your tax return. Employees looking to take this deduction can only do so if these premiums and other medical expenses when the amount exceeds 7.5% of your Adjusted Gross Income.

Are the Wages Paid to a Family Member Tax Deductible?

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

Amherst, NH Family-Owned Business Looks to Hire Teenaged Family Members

Family-owned businesses have many tax advantages when employing family members. Money paid to family members reduces the net income of the business, thereby reducing the overall tax burden. In addition, insurance costs and other benefits offered to the employed family members can also be deducted from the business’ profits as an expense. When a parent is the sole proprietor and the business is not incorporated when children under the age of 18 are employed, neither the business nor the employed minor are required to pay FICA taxes. Having a family member on payroll, whether a minor child or spouse, can significantly reduce the amount of taxes owed at the end of the year.

How Will Cash App Payments Affect Your Taxes?

Written by Paul Belfiore on December 30, 2022. Posted in Blog, Taxes.

Brookline, NH Taxpayer Has Questions

With the prevalence of money exchanged on Venmo, PayPal, and other cash apps, the IRS has stated that it will be cracking down on those receiving cash app money exceeding $600 in the calendar year. The threshold for receiving third-party payments is $600. When the amount exceeds this, the recipient is required to file a 1099-K. In past years Form 1099-K was only required for gross income from cash apps exceeding $20,000 or more than 200 separate transactions during the calendar year. This change will affect many sellers who receive payment through these cash apps.

What Effect Do Stock Losses Have on Your Taxes?

Written by Paul Belfiore on December 15, 2022. Posted in Blog, Taxes.

Nashua, NH Taxpayer Has Questions

Capital losses from the sale of stock, mutual funds, and other investments can help to reduce your tax bill. If you had any capital gains over the year, this loss will first be used to offset the taxes paid on these gains. For those years where you are still at a capital loss, this deduction can reduce taxes on other income, including salary and interest. This excess deduction is capped at $3,000 per year. Any more than that amount can be carried over into subsequent years as a future tax deduction.

Which Charitable Contributions are Not Taxable?

Written by Paul Belfiore on November 25, 2022. Posted in Blog, Taxes.

Nashua, NH Resident Looks for Advice

Any charitable donation that offers you something in return as the donating person is not tax-deductible. This includes money spent on charitable fundraisers where there is a prize, such as a raffle or drawing, is not tax-deductible. Similarly, a donation that is to purchase a product for your own use, such as cookies, wrapping paper, or another item is not considered a charitable deduction. When itemizing charitable deductions on your taxes, keep in mind that these donations cannot be from which you have receive an item yourself, including a chance to win something.

How is the Home Office Deduction Calculated?

Written by Paul Belfiore on November 11, 2022. Posted in Blog, Taxes.

Self-Employed Brookline, NH Resident Has Questions

When claiming the home office deduction on your taxes you can use the simple or regular method for calculating your deduction. To determine which is the best calculation, you will want to determine which of the two will offer you the larger deduction. With the simplified method, you would complete a Simplified Method Worksheet, supplied by the IRS. This will require you to indicate the square footage of your business space in the home among other factors to determine the deduction amount. The regular deduction method uses Form 8829 and factors in mortgage interest, real estate taxes, insurance, and utilities to determine the deduction amount.

Can a Business Deduct Charitable Contributions on Their Taxes?

Written by Paul Belfiore on October 28, 2022. Posted in Blog, Taxes.

Goffstown, NH Business Owner Looks for Clarification

Only businesses classified as corporations can deduct charitable donations on their business tax return. These contributions to charity cannot be more than 60% of the adjusted gross income. Business owners for other types, including sole proprietorships and partnerships, can deduct charitable contributions on their own personal tax return.