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Tag: taxes

Amherst, NH Resident Has Questions

The standard deduction for 2023 is $13,850 for single filers and $27,700 for married couples filing jointly. If other eligible deductions exceed this amount, then you will want to itemize your deductions instead. These include mortgage interest, unreimbursed medical expenses exceeding 7.5% of your income, charitable contributions, property taxes, and state or local income tax. To determine whether you should use the standard or itemized deductions, you will first need to have an idea of how many deductions you will have and which offers the greatest amount of savings.

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Nashua, NH Homeowner Looks to Plan Ahead

When you sell your home, you will owe capital gains tax on any profit that you make. This is the difference between the price that you originally bought the house at and the amount that you get selling the property. If you have been at the property for a substantial amount of time, the taxable amount may be significant. Home improvement projects that add value to the property and / or prolong the home’s life can be subtracted from the sale price, reducing the amount that will be subject to the capital gains tax.

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What Does Tax Planning Involve?

Hudson, NH Resident Has Questions

Tax planning involves analyzing an individual or family’s current financial situation and making the necessary changes to ensure that they can pay the lowest amount in taxes for their circumstances. This may include manipulating the timing of income, purchases, investments including retirement plans and college savings. Through careful tax planning, you may be able to maintain or even reduce your tax bracket. This can make a significant difference to the amount of taxes that you wind up paying. Tax planning is completely legal, and a skilled tax professional can help you to best understand how to manage your finances.

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Litchfield, NH Resident Looks to Reduce Her Tax Burden

Maximizing 401(k) contributions, charitable donations, and selling underperforming investments are all ways to reduce your taxable income before the end of the year. Another option is to put money aside in a health savings account (HSA) or traditional IRA. You have until December 31st to make these moves, reducing your taxable income for the calendar year.

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Who Is Exempt from Paying Taxes?

Milford, NH Resident Asks an Important Question

There are some groups that are exempt from paying taxes. These include qualified 501(c)3 non-profit organizations, US citizens working abroad, and some low-income individuals. While most of us will have to pay some amount in taxes throughout the year, there are some circumstances when no taxes will be owed. For those with low or no income, lots of deductions, or many dependents taking advantage of the Earned Income Tax, you may wind up with no tax bill for the year.

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Nashua, NH Student Looks for Student Tax Breaks

The IRS offers several tax breaks for college students, as well as graduates who are paying off student loans. The American Opportunity Tax Credit (AOTC) is available for those enrolled in their first four years of college courses. Taxpayers paying for college, either the student themselves, a parent, or spouse, can claim a tax credit of 100% on the first $2,000 spent on eligible education expenses. The Lifetime Learning Credit is another advantage for current students. This differs from the AOTC in that graduate students can be eligible, and you are not required to be enrolled for at least half of the year. Those that have student loans, whether current or former students, can deduct the interest paid on the student loans from their taxes.

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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.

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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.

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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.

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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%.

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