Blog Archives - Page 9 of 13 - Merrimack Tax Associates

How Will Freelancing on the Side Affect Your Taxes?

Written by Paul Belfiore on October 30, 2020. Posted in Blog, Taxes.

Amherst, NH Resident Seeks Advice

It isn’t uncommon today, in this gig economy, for people to have side work beyond their full-time employment. It is important to report, and pay taxes on, this additional income. If your freelancing clients are paying you in excess of $600 per year each, should be sending out a Form 1099-MISC at the end of the calendar year as a record of this money paid. When you file your taxes, all of this additional income made from freelancing should be reported to the IRS.

When Does Your Child Need to File Income Tax?

Written by Paul Belfiore on October 16, 2020. Posted in Blog, Taxes.

Parents in Milford, NH Have Questions

A rite of passage for any working teen is the filing of their first income tax. A status as a dependent does not exempt your child from filing income taxes. If the child’s earned income reaches $12,200 or unearned income, from investment interest, above $1,100. For those that are self-employed generating income, if the net earnings exceed $400 an income tax return must be filed.

How are Life Insurance Payouts Taxed?

Written by Paul Belfiore on September 25, 2020. Posted in Blog, Taxes.

Milford, NH Resident Looks for Advice

When money is paid from a life insurance policy upon death, the money is not considered taxable income and the beneficiary does not have to pay taxes. If the money is not immediately paid out but is held by the insurance company for some reason, interest that is generated during that time may be subject to taxes. If the insurance is paid to the estate, as opposed to a beneficiary, you may have to pay an estate tax on the money.

What are the Reasons to Amend a Tax Return?

Written by Paul Belfiore on September 11, 2020. Posted in Blog, Taxes.

Nashua, NH Resident Asks for Advice

Amending a tax return in your favor can give you money back that you had not been entitled to before these changes. Amendments such as claiming overlooked deductions, IRS rule changes, miscalculations and a corrected 1099 or W2 can all work in your favor, giving you a larger return. You will want to make changes to past tax returns if there are errors that may be flagged by the IRS, including unreported income.

How Will the Stimulus Package Affect Your Taxes

Written by Paul Belfiore on August 28, 2020. Posted in Blog, Taxes.

Bedford, NH Resident Has Concerns

The government’s recent stimulus package was distributed to millions of Americans. The stimulus money is not considered income by the IRS and will not be taxed. While the money itself is not taxed, this will count toward your household’s adjusted gross income for 2020. For some, this additional income may be enough to put you into a higher tax bracket.

How to Prepare for an IRS Audit

Written by Paul Belfiore on August 14, 2020. Posted in Blog, Taxes.

Hudson, NH Resident Seeks Advice

While the number of individuals audited is small in comparison to returns, it does not necessarily imply a suspicion of criminal activity. Tax returns that have any unusual deduction, conflicting calculations or are missing paperwork may be flagged for an audit. After you receive a letter from the IRS indicating that you are being audited you will have thirty days to respond. In the letter, the IRS will indicate the paperwork that is needed and these 30 days should be used gathering this information and supplying it to the IRS.

How Will My Inheritance Be Taxed?

Written by Paul Belfiore on July 24, 2020. Posted in Blog, Taxes.

Amherst, NH Resident Seeks Advice

An inheritance can be taxed through an inheritance tax and an estate tax. The estate tax will come directly out of the estate before it is divided and distributed, leaving recipients only responsible for the inheritance tax. There is no federal inheritance tax and only some states, New Hampshire not being one of them, collect an inheritance tax. In most cases, taxes will already be taken out of the estate before it is given to the benefactors.

Who Needs to Pay Estimated Taxes?

Written by Paul Belfiore on July 10, 2020. Posted in Blog.

Bedford, NH Resident Has Questions

Anyone who owns a business or works as a freelancer, earning non-wage income, is required to make estimated tax payments. This self-employed income has no automatic tax withholdings. Salaried employees who have completed a W2, have taxes withheld directly from their paycheck. However, if you are not a W2 employee these deductions will not be made and you will instead need to pay estimated taxes.

Are Health Insurance Premiums Tax-Deductible?

Written by Paul Belfiore on June 26, 2020. Posted in Blog, Taxes.

Self-Employed Milford, NH Resident Has Questions

Self-employed individuals are able to deduct all premiums paid for health insurance. This deduction is not available if the individual is eligible to participate in an employer’s health care plan but chooses to decline. If you qualify for coverage under a spouse’s healthcare plan but decline this also, the tax deduction is ineligible. Keep in mind that self-employed individuals are not able to deduct more than their generated income in a single calendar year.

How Will Working from Home Affect My Taxes?

Written by Paul Belfiore on June 12, 2020. Posted in Blog, Taxes.

Can a Home Office Be Considered a Business Expense

Windham, NH Resident Seeks Advice

Employees working from home are no longer able to deduct business expenses, as this deduction was eliminated in 2018. Only self-employed individuals can qualify for home office deductions. Self-employed workers can claim either $5 per square foot of home office space up to 300 square feet, or a percentage of the home and costs to maintain it as a deduction.