Congress Passes Extender Package

Flag-&-Gavel-ThumbnailCongress has approved the Tax Increase Prevention Act of 2014.  This new law retroactively extends “tax extenders” which had expired at the end of 2013.  This allows taxpayers to claim the popular but temporary incentives on their 2014 returns which will be filed in 2015.  These incentives affect individual and business returns in the following areas: [Read more…]

Save Twice with the Saver’s Credit

12.26_SaveIf you are a low-to-moderate income taxpayer, you can take steps to save two ways for the same amount. With the saver’s credit you can save for your retirement and save on your taxes with a special tax credit. Here are six tips you should know about this credit: [Read more…]

Back-to-School Tax Credits

canstockphoto3690161Are you, a spouse or dependent enrolled in college? If so, here’s a quick tip: some of the costs you pay for higher education can save you money at tax time.

Here are several important facts you should know about education tax credits: [Read more…]

Plan Now to Get Full Benefit of Saver’s Credit

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Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2012 and the years ahead, according to the Internal Revenue Service.

The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.

Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2012 tax return. People have until April 15, 2013, to set up a new individual retirement arrangement or add money to an existing IRA and still get credit for 2012. However, elective deferrals (contributions) must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees. Employees who are unable to set aside money for this year may want to schedule their 2013 contributions soon so their employer can begin withholding them in January.

[Read more…]

Expanded Tax Credit for Newly Hired Veterans

 

Time is running out for businesses that are planning to claim an expanded tax credit for hiring veterans, according to the IRS. The expanded credit is for businesses that hire qualified veterans who begin work on or after Nov. 22, 2011 but before Jan. 1, 2013. The maximum tax credit is $9,600.00 per worker for for-pofit businesses and $6,240.00 per worker for tax-exempt organizations. The credit amount is based on several factors: the length of the veteran’s unemployment, the number of hours worked, and the wages the veterans receives the first year of employment.

In order to apply, a company needs to file form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with a state workforce agency within 28 days of the veteran’s employment. Some states accept form 8850 electronically.

 

Tax Relief for Hurricane Sandy Victims

The Internal Revenue Service announced tax relief to affected individuals and businesses after the destruction that Hurricane Sandy unleashed. Those affected in Connecticut, New Jersey, New York, and other areas may qualify for this tax relief. If the location is deemed a disaster area, then any tax relief is automatically provided and contact with the IRS is not necessary.

Among the tax relief efforts are an extension of various tax filing and payments. The fourth quarter individual estimated tax payments are due February 1, 2013 instead of January 15, 2013. Payroll and excise tax returns and payments are also due now on February 1, 2013. Any late-payment or filing penalties will be abated for those in the affected areas.

[Read more…]

Act before 6/19 to get tax credit for hiring vets

Employers that hired unemployed veterans during late 2011 and early 2012 have an expanded period to request the required certification for claiming the expanded Work Opportunity Tax Credit (WOTC). That expanded period ends on Tuesday, June 19.

The IRS is reminding employers that for eligible veterans hired on or after Nov. 22, 2011 and before May 22, 2012, they have until June 19 to file certification forms with state workforce agencies.

Here are some important points to know about the credit and upcoming deadline: [Read more…]

Child Tax Credit – 11 Key Points

Parents, guardians and other taxpayers who are eligible to claim a child as a dependent on their tax return may also be eligible for a federal tax credit of up to $1,000 per child.  The Child Tax Credit is one of serveral tax-related benefits for families and children.  Remember that a tax credit is different (and in most cases better) than a deduction.  The Child Tax Credit is available to “eligible taxpayers” with “qualifying children” under age 17.  Be aware that there are additional criteria and not all dependents will qualify.

Amount
With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under age 17.

Qualification
A qualifying child for this credit is someone who meets the qualifying criteria of seven tests: age, relationship, support, dependent, joint return, citizenship and residence.

Age Test:  To qualify, a child must have been under age 17 – age 16 or younger – at the end of 2011.

Relationship Test:  To claim a child for purposes of the Child Tax Credit, the child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. An adopted child includes [Read more…]

10 Tax Benefits for Parents

Your kids can be helpful at tax time. That doesn’t mean they’ll sort your tax receipts or refill your coffee, but those charming children may help you qualify for some valuable tax benefits. Here are 10 things the IRS wants parents to consider when filing their taxes this year. [Read more…]

New Hire Retention Credit – FAQs

What is the new hire retention credit and what does it apply to?
This is a general business credit to encourage retention of new hires (retained workers). The employer may claim the credit for each retained worker. A retained worker is a qualified employee (as defined for purposes of the payroll tax exemption) who remains an employee for at least 52 consecutive weeks, and whose wages (as defined for income tax withholding purposes) for the last 26 weeks equal at least 80% of the wages for the first 26 weeks. The amount of the credit is the lesser of $1,000 or 6.2% of wages (as defined for income tax withholding purposes) paid by the employer to the retained worker during the 52 consecutive week period.  Here is a worksheet to aid you in providing information to us.

If an employer chooses to claim the WOTC for a qualified employee, can the employer still claim the new hire retention credit for that qualified employee?
Yes, an employer may claim the retention credit for a qualified employee even if the employer has also claimed the WOTC for the same employee. [Read more…]