Skip to main content

How Lifetime Giving Can Help Reduce Estate Taxes

Amherst, NH Family Plans Ahead for Their Children’s Inheritance

If you have a sizable estate, it can be beneficial to start giving it to your loved ones now, rather than waiting until you pass away. You can give any number of people up to $17,000 each year without incurring the gift tax. For couples this amount is $34,000. This can allow families to begin accepting their inheritance while their loved ones are still alive, receiving money without having to pay estate taxes. Another benefit of this type of lifetime giving is that you can have the joy of sharing your wealth with family now.

Continue reading

How to Determine Your Tax Rate

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.

Continue reading

Can I Electronically Pay My Estimated 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.

Continue reading

What Are Above-the-Line Tax Deductions?

Hudson, NH Resident Seeks Clarification

Above-the-line tax deductions are those qualified items that are deducted from gross income to
calculate adjusted gross income. The most common above-the-line deductions include IRA and other
qualified retirement contributions, healthcare expenses, business expenses, and student loan interest.
Above-the-line deductions can be taken even if you are not itemizing deductions when filing taxes. This
allows those who have more advantage taking the standard deduction versus itemizing to still take
advantage of these above-the-line tax savings. To calculate this, all above-the-line deductions are
combined and are then used to determine your adjusted gross income, reducing overall taxable income.
This is separate from the standard deduction or itemized deductions, which can then be taken from the
adjusted gross income.

Continue reading

How to Get Copies of Past Tax Returns

Londonderry, NH Taxpayer Seeks Advice

The IRS can provide copies of tax returns for the past seven years. You can request a copy of your tax
return by submitting Form 4506 to the IRS. There is a fee of $43 associated with this request and should
be submitted at the time of sending the form. It may take the IRS up to 60 days to process this request.
Once processed, the tax documents will be mailed to you. If you had a third-party assist in preparing
your tax return, they may have copies and be able to provide you with this information without needing
to wait for the IRS.

Continue reading

Tax Benefits for Real Estate Investors

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.

Continue reading

How Are Monetary Gifts Taxed?

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%.

Continue reading

How Many Allowances Should I Claim on My W4?

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.

Continue reading

How are Dividends Taxed?

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.

Continue reading

Bedford, NH Resident Seeks Help

Finding out that you owe the IRS a large sum of money in outstanding tax bills can be a very daunting
experience. For many, it can be difficult to come up with this unexpected amount. It is possible to
compromise with the IRS on the amount of outstanding taxes that you owe, finding an amount and
payment schedule that is more manageable. Using Form 433-A, you will provide information about your
finances, including income, assets, and investments. You will also note any outstanding debt and your
household’s monthly expenses. You will need to include supporting documents for this and a copy of
the completed Form 656. This form will outline the compromised resolution for your tax debt, including
whether this will be paid as a lump sum or monthly payments.

Continue reading