Tag: Tax Rate

How Will the Child Care Deduction Affect Your Taxes?

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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How Will Receiving a Large Sum of Money Affect Your Taxes

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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How to Avoid Tax Penalties on a 529

How to Avoid Tax Penalties on a 529

Amherst, NH Parent Has Questions

A 529 is a great way to save for education expenses.  Withdrawals are tax-free when used on qualified education expenses.  However, if the money is withdrawn for non-qualified expenses or if there is money left over to be withdrawn after all expenses are paid this is considered taxable income.  In addition to paying taxes on the leftover amount, you will also incur a 10% penalty for these withdrawals.

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Child Tax Credit

Nashua, NH Resident Looks for Clarification

Currently taxpayers can claim a tax credit of $2,000 per child under age seventeen.  The American Rescue Plan raises that amount to $3,600 for children under age six and $3,000 for those between six and seventeen.  This change means additional tax credit per child, and it allows those that are seventeen to now qualify as well.  While the majority of families with minor children will qualify for this additional tax credit, there are income limits that will restrict others.

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What are Itemized Deductions?

Tax Lien

Back to the Basics for this Nashua, NH Resident

Itemized deductions are a range of expenses that are deductible on your taxes.  These include mortgage interest, property taxes, medical and dental expenses that exceed 7.5% of your adjusted gross income, charitable donations and more.  Itemized deductions reduce your taxable income significantly, resulting in less taxes paid and, in some cases, even a lower tax bracket.

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

Regular Hours

Sunday: Closed
Monday: 9AM-4PM
Tuesday: Closed
Wednesday: 9AM-4PM
Thursday: Closed
Friday: 9AM-3PM
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