by Viktoriya Khusit | Oct 13, 2016 | Blog |
Form 941 is an Employer’s Quarterly Federal Tax Return. Employers use this form to report income taxes, social security tax, and Medicare tax withheld from employee’s paychecks, and pay the employer’s portion of social security or Medicare tax.
This form is filled out every quarter and has to be filled with IRS by April 30, July 31, October 31 and January .
If all the deposit for taxes due made timely, than employer has 10 more additional days after January 31 to file 4th quarter employer’s quarterly federal tax return- form 941 Q4.
If you are using payroll provider, it will be done by them. If you use Quickbooks Online and process payroll via Intuit, this form already pre-populated for you. But if you are using a desktop version of accounting software and process payroll manually, click here and use this video as a guide on how to fill 941 Employer’s Quarterly Federal Tax return up. I used my company name in the header just an example.
See below where to mail your 941 Employer’s Quarterly Tax return.
Please leave comments and ask questions.
by Viktoriya Khusit | Oct 9, 2016 | Blog |
So I am one of those lucky parents whose child needs braces. After shopping around for a while (my insurance doesn’t have ortho coverage) we picked a doctor. Our bill was around $5500.00. In addition during a year we had some prescription medication totaling $300 and dentist visits of $600. Total medical expenses of $6400. A lot of money, right? You would think we would be able to deduct it. For a lot people it’s a wrong assumption
Medical expenses are deductible only when you itemize, meaning you owe property and paying mortgage and real estate taxes, have some sort of donations, and may be have some work dues (not your country club dues). If you itemize then you can calculate how much of your medical expenses is deductible. It’s not 100%. In short you can claim only difference between what you spent on medical expenses and 10% of your AGI. For example, if your family AGI is $55,000.00 your 10% is $5500.00. In my scenario medical expenses were $6400-$5500=$900. Here is a catch: your combine itemized deductions on Schedule A should be more than your standard deduction
Single and Married filling separately $6300,
Married Filling Jointly $12,600,
Head of Household $9250
if you elect to still take itemize deduction that is less than your standard deduction, you will be paying more taxes as your taxable income will be more.
Yes, you might have substantial medical expenses, but it’s not necessarily you can deduct them and if you do not always its better than electing to take a standard deduction.
See how to do it on your tax return HERE.
by Viktoriya Khusit | Sep 27, 2016 | Blog |
Health insurance, health plans and tax-favored arrangements that help to offset health care cost….
Let’s look at Health Saving Plans: how many are there, what do they offer and why would you want to have one.
Tax-favored arrangements are:
Archer Medical Savings Accounts (MSA)
Medical Advantage Medical Savings Accounts (MSA)
Health Reimbursement Arrangements (HRA)
Flexible Spending Arrangements (FSA)
Health Saving Accounts (HSA)
Archer MSA is a first generation of HSA. Both employer and employee can contribute to the plan, but not in the same year. Contributions made by employee is deductible on tax return. However, this plan is available only for employees of small employers and self- employed individuals.
Medicare Advantage MSA is an Archer MSA run by Medicare. Account holder has to be enrolled in Medicare and contributions done by Medicare only.
Only employer can contribute to Health Reimbursement Arrangements on behalf of employees.
Flexible Spending Arrangements are funded via a voluntary salary reduction and are considered a reimbursement for medical expenses. It’s not a health plan, but only a way to reimburse for qualified medical expenses.
Health Savings Account (HSA) is a newest medical savings plan. Employee contributions can be used as adjustment to income, contributions can be carried over from year to year until are used. HSA are portable, and they stay with a taxpayer regardless of place of employment. HSA created by enrolling in a high-deductible health plan and opening a tax-exempt trust or custodial account with a qualified HSA trustee (bank, an insurance company or anyone already approved by IRS to be a trustee of IRA or Archer MSA)
by Viktoriya Khusit | Sep 24, 2016 | Blog |
This year one of my clients had to move to a different city because he got a job offer, he could not resist. After excitement from landing a dream job went a way, reality of moving his household settled in. My client, let’s call him John Doe is a single taxpayer without any dependents, so he packed his suitcase, started his car and drove for a couple of days from city A to city B. New employer reimbursed him $300 for the moving expenses. Let’s just pretend transportation of his expenses cost him $100 and hotel $500. Total move was $600, of which $300 was reimbursed by the employer and reported on W2 box 12. Mr. Doe can deduct $300 on line 26 of Form 1040. This is above the line tax deduction, which will make his taxable income $300 less. If there was no reimbursement from employer, the whole moving expense amount is deductible, i.e. $600 in this example; and of course if employer reimburse him in full for the moving expenses, Mr. Doe cannot claim this deduction.
In order to see how much is deductible, one needs to fill out form 3903 (click here to see a short video that shows how to do it) and then transfer final number from form 3903 to line 26 on form 1040.
So, did you move this year? Want to see if you can benefit from this deduction? Follow steps in the video.
But before you even start filing out form 3903 you need to satisfy a few tests:
- Your move need to be close to the start of new job. You move has to be within one year from the date you started your job.
- Distance from your NEW home to a new job has to be NOT longer then from FORMER home to a new job.
- 50 miles rule. If you had 10 miles distance from your old home to your old job, your new job must be 60 miles or more from your old home. If you did not work before, your job needs to be at least 50 miles from your old home.
- Time test. For employees: you have to be employed full time for at least 39 weeks in the 12 months period following start of your new job. For self-employed: 39 week in the first 12 months and for a total of 78 weeks in the first 24 months
And, if you want to claim this deduction, please keep all your receipts. By the way, your meals during move are not deductible.
by Viktoriya Khusit | Sep 21, 2016 | Blog |
If you have a place that you rent out, you have to report your income.
What is included in Rental Income? EVERYTHING!
In addition to rent payment, you have to include in the income
– any type of advance rent,
– payment to lease cancellation,
-security deposit (unless you are planning on returning it to your tenants at the end of the lease, but if you are keeping a part of the security deposit because tenants did not live up to the term of the lease, then you have to include that portion as your rent income.)
-if instead of the money you receive services or property, fair market value needs to be included as a rent income.
On a bright side, you can deduct pretty good list of expenses. Such as interest on your mortgage, real estate taxes, advertising, maintenance, utilities, insurance and homeowners dues and mileage.
You can deduct repairs that were done to keep a property in good operating condition.
If you did improvements that add value to the property such as change roof, add a pool, new fence, changed AC, etc these expenses have to be depreciated on a form 4562
And yes, if your expenses exceed your income, you can report loss up to $25,000; amount goes down for filers who AGI is above $100,000
