Blog Archives - Page 6 of 13 - Merrimack Tax Associates

How Can Retirement Contributions Lower Your Tax Bill?

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

Amherst, NH Residents Looks for Advice

Contributing a portion of your income into a tax-deferred retirement savings account, like an IRA, can reduce your total income. This may be able to put you into a lower tax bracket, saving money while still putting aside money for retirement. A 401(k) works much the same way, allowing contributors to defer paying income taxes on contributions. This can make a big difference for those that are in a high tax bracket, since when the income is withdrawn you will likely be at a much lower tax bracket.

How Can a Health Savings Account (HSA) Help You Save on Taxes?

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

Amherst, NH Resident Has Questions

An HSA (Health Savings Account) allows you to invest pre-tax money into an account that can be used to pay for qualified health care related expenses. The tax-free contributions deposited into the HSA will reduce your overall taxable income. The money in the account can be rolled over from year to year while earning interest, depending on the type of account.

What Tax Documents Should You Collect at the End of the Year?

Written by Paul Belfiore on January 14, 2022. Posted in Blog, Taxes.

Brookline, NH Resident Looks to Plan Ahead

Employers and financial institutions have until January 31^st to send your end of year tax documents. Knowing that this will be coming soon, it is a good idea to keep an eye out for these critical items. This includes a W2 from employers, 1099-INT and 1099-DIV from financial institutions documenting interest and dividends earned throughout the year, Form 1098 outlining any mortgage interest paid, and additional 1099 forms for other income earned.

How Does a Stock Sale Affect Your Taxes?

Written by Paul Belfiore on December 31, 2021. Posted in Blog, 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.

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

Written by Paul Belfiore on December 17, 2021. Posted in Blog, Taxes.

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.

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.