How Does a Stock Sale Affect Your Taxes?

Hudson, NH Resident Seeks Clarity

Stock shares sold from a regular brokerage account will be subjected to capital gains tax.  If the assets were owned for less than a year, this is short-term capital gains.  For assets that you have had longer, you will need to pay long-term capital gains on the profit.  Short-term capital gains are typically the same tax rate as your current tax bracket, while long-term capital gains can be anywhere from 0% to 20% depending on your taxable income and filing status.

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What to Do if You Can’t Pay Your Tax Bill

Hudson, NH Resident Has Concerns

If you cannot pay your tax bill when it is due, the outstanding amount owed will begin to accrue interest and penalties.  If time goes on without any payment to the IRS, they may put liens on your property or garnish your wages.  In extreme cases of tax evasion, violators may be subjected to jail time. 

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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.

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When Do You Stop Paying Social Security Tax?

Nashua, NH Residents Looks for Answers

Social Security taxes are taken out of an employee’s paycheck in the form of FICA (Federal Insurance Contributions Act).  This tax covers both Social Security and Medicare.  In general, everyone working and earning a paycheck will need to pay this tax.  Very high earners will max out their Social Security contribution before the end of the year, only to have it resume after the new calendar year.  The maximum taxable wage for 2022 is $147,000.  Any income in excess of this will not have the FICA tax withheld.

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Are COVID-19 Tests and PPE Tax Deductible?

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.

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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.

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How to Prepare Your Taxes for an Income Increase

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.

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How Will the Child Care Deduction Affect Your 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. 

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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.

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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.

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(603) 429-2009

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405 Daniel Webster Hwy
Merrimack, NH 03054
(603) 429-2009

Regular Hours

Sunday: Closed
Monday: 9AM-4PM
Tuesday: 9AM-4PM
Wednesday: 9AM-4PM
Thursday: 9AM-4PM
Friday: Closed
Saturday: Closed

Tax Season Hours (Feb 1 - Apr 15)

Sunday: Closed
Monday: 9AM-5PM
Tuesday: 9AM-5PM
Wednesday: 9AM-5PM
Thursday: 9AM-5PM
Friday: 9AM-4PM
Saturday: 9AM-2PM