It's Tax Time

 

We hope the new year is off to a great start for everyone. We just wanted to touch on a few subjects before tax season gets going. 

We are conducting both in-person and virtual tax appointments.

Our intake forms have been updated and need to be completed before we may prepare your tax returns. This will ensure you do not miss any possible tax credits or deductions. There have been many changes to the tax code in the past couple of years.

We want to make it as easy as possible for you to get your taxes completed. So once you have gathered all the tax documentation, you may:

·  Mail your information to us, and we will contact you with any questions.

·  Stop by the office between 9-5 to drop off.

·  Use our client Secure File Portal

·  Schedule a time for either an in-person or virtual appointment by calling the office or clicking Appointments.

The filing deadline this year for corporate tax returns is March 15th, and for personal tax returns, it is April 18, 2023. To ensure your personal tax return is completed and filed on time, we must receive all your information by April 1st. We will not begin working on your tax return until we receive your information. 

If you require an extension to file, please e-mail Jessica White at jwhite@afitonline.com. There is a $25 fee for processing extensions. (The request must be in writing)

We are here to help, so please do not hesitate to contact us if you have any questions or if we may be of any assistance. 

We are truly thankful for the confidence and trust that you place in us, and we are looking forward to seeing you soon.

 

As always, we are in your corner.

 

Mike Mead, EA, CTC

Julie Naudet, AFSP

WARNING: IRS Audits Rapidly Increasing…

 How Confident Are You That Your Tax Return is Accurate?

Could You Be Missing Potential Deductions?

10 million taxpayers missed out on a chance to receive a bigger refund last year simply because they should have filled out one line on their tax return.  Will you miss a similar opportunity this year?

Today’s tax laws are increasingly complicated, and the rules for deductions and credits change yearly. Are you aware of all the deductions and credits that might be available to you this year, even on the most basic of tax returns? Perhaps you feel secure in your do-it-yourself tax preparation software, but let’s face it… There is no substitute for an experienced tax professional who can answer your questions and ask you the questions that might be key to saving you tax dollars.

With our tax return services, you get the following:

•         Assurance that your return has been checked and double-checked for mathematical accuracy and errors that are commonly flagged by the IRS, resulting in fewer chances for contact by the IRS.
•          Tips for better managing your payroll withholding so that you can have the advantage of greater income all year long, rather than loaning that money to the government and waiting for it to come back in the form of your yearly tax return.
•          A list of common deductions that may benefit you in the coming year and tips for limiting your future tax liability.
•          Electronic filing for a quicker refund. 

5 Financial Tips for Young Adults

As a young adult, it's easy to get caught up in the excitement of starting a career, exploring new opportunities, and building your future. However, it's also important to start thinking about your financial well-being early on. Money may not be the most glamorous topic, but it's an essential part of building a happy and secure future. That's why it's crucial to establish good financial habits and make smart financial decisions from the start.

In this post, we'll explore five financial tips that are especially important for young adults to consider. From saving early and regularly to paying off credit card balances and investing in your future, these tips will help you get on track and set yourself up for financial success.

1. Start saving early and regularly: The earlier you start saving, the more time your money has to grow. Even if you're just starting out and don't have a lot of money to save, it's important to establish the habit of saving regularly. Set up automatic transfers from your checking account to a savings account, and make sure you're contributing to a retirement account, such as a 401(k) or IRA.

2. Create a budget and stick to it: A budget helps you understand where your money is going and where you can cut back. It's important to track your spending and make sure you're not overspending in any one area. There are plenty of budgeting apps and tools available to help you stay on track.

3. Pay off your credit card balance in full each month: Credit cards can be a convenient way to pay for things, but they can also be a financial trap if you're not careful. Interest charges can add up quickly, so it's important to pay off your balance in full each month to avoid paying extra in interest.

4. Build an emergency fund: An emergency fund is a savings account set aside for unexpected expenses, such as a car repair or medical bill. It's important to have an emergency fund to fall back on so you don't have to rely on credit cards or loans in a pinch. Aim to save enough to cover at least three to six months' worth of living expenses.

5. Invest in your future: In addition to saving for the short-term, it's important to think about your long-term financial goals. Investing in stocks, mutual funds, or other types of investment vehicles can help you grow your wealth over time. It's never too early to start thinking about retirement, so make sure you're contributing to a retirement account, such as a 401(k) or IRA.

By following these financial tips, you'll be well on your way to a secure financial future. Remember to stay disciplined and make saving and budgeting a priority. With a bit of planning and effort, you can achieve your financial goals and set yourself up for success. It may not be the most exciting topic, but taking control of your finances now will pay off in the long run. Don't be afraid to seek help from a financial advisor or professional if you need it – it's never too early to start building a solid financial foundation.

Although this meme is a generalization, it's also reasonably accurate.

  

Many potential clients who call my office will inquire about my fee as their primary concern.

I understand this because none of us wants to be hit with a price tag beyond our means.  

I am okay with you inquiring about my price tag as long as it is not the first thing you ask. 

 

I want you to care about my quality, my education, the amount of experience I have, and my wonderful customer service.  

I charge a fair fee. I'm not the most expensive, but I'm also not the cheapest.  

These days with as many variables as there are, it is only possible to give an accurate estimate when we know what you need from a simple phone conversation.  

Since people tend to not know what they have, how will I know what it will cost? I charge by the form and by the amount of data you have.  

Does your mechanic tell you what it will cost before you bring your car in for a diagnosis? Will he charge the same for an oil change as for a transmission rebuild? 

Not likely.  

I will do my best for you, I will be available to you, and my fee will be reasonable for my level of experience and knowledge. 

If you base your automotive decisions on the lowest-cost mechanic, your car may break down again as you drive away. 

And, if you base your tax preparation decisions on the lowest-cost provider, you may wind up with IRS or state issues, but your tax pro is nowhere to be found.  

Trust your car to an expert, and trust your tax preparation to the Enrolled Agents at Alliance Financial & Income Tax.

Worth every penny.

How to Help Your Employees Embrace Digital Transformation

 

Digital technology can improve business operations in many ways. For example, cloud-sharing platforms simplify document sharing, while project management software makes it easier to track deliverables within teams. As a business owner, you want to harness the power of such tools. However, you don't want your employees to feel like they're being replaced or to resist digital transformation.

 

Alliance Financial and Income Tax explains how you can keep your workers happy while encouraging them to embrace new technologies.

 

Strategically Choose What Technology to Implement

 

Be smart when selecting technology for your company by choosing products that will serve your employees well. Enginess explains how you can do a technology assessment to see what tools will help your company. Start by understanding the technology's potential. Then identify which employees could use the tool and how. Next, assess how the technology would impact broader market dynamics beyond your own company. Finally, create your strategy to either capitalize on that technology or counter its effects.

 

Highlight How Technology Can Help Your Workers

 

If you want new technology to be successfully implemented in your company, you need worker buy-in. To this end, make sure you're telling teams how tech can help them. Communicating about innovation early on is essential. Help employees become more engaged with the tools by explaining and, ideally, demonstrating the benefits. For example, you might run a test pilot program or provide a case study of how software will save them time, energy, or stress.

 

Create a Comprehensive Onboarding Program

 

Nobody wants to have a new technology thrust upon them and then have to spend hours trying to figure out how to use it. Create a comprehensive onboarding plan when adopting new innovations. Make sure you communicate a deadline by which everyone is expected to use the new tool. Then, provide hands-on tutorials, giving people a chance to test out the product and ask questions. You should also create comprehensive training manuals and appoint a point person who is well-versed in the new tool to answer questions going forward.

 

To encourage buy in, explain that this new process will ensure that your new hires will be good fits for your teams and company culture. Taking the time to clarify position descriptions, prescreen applicants, and conduct background checks will actually save time in the long run because you will be more likely to find the right people the first time.

 

Embrace Business Process Management

 

If you're still struggling to get employees to embrace new innovations, consider business process management, BPM. With BPM, you can automate workflows and establish guidance for digital process automation, giving workers the opportunity to concentrate on more complex tasks instead of grunt work. BPM can help reduce errors and improve efficiency—and it's also useful for tech implementation. When you create your BPM framework, track progress to see how effective it is. With regular monitoring, you can continually improve output.

 

Make Employees Feel Appreciated

 

Taking the steps above can help improve employee satisfaction when it comes to new technologies in the workplace. However, you also want to take other steps to make sure workers are happy. Offering comprehensive benefits, like paid personal days and extra vacation, will make acquiring and retaining top talent easier. You can also look into less traditional benefits, such as gas reimbursements, fitness plans, treadmill desks, investment programs, free flu shots, and more.

 

It’s also important that you provide your employees with the tools they need to be productive and perform their duties properly. Asking team members to do tasks without adequately supporting them will foster resentment and frustration. Instead, get them what they need, whether it's a whiteboard for their office, a moderate allowance for team lunches, or a library of stock videos to help with marketing efforts.

 

While each requires some financial investment, putting money into, say, videography shows that you appreciate the effort your team puts into their projects and that you understand that video stock footage can help them do their jobs well. It’s an inexpensive way to properly gear up your staff, plus it’s a vote of confidence in your team’s skills and capabilities.

 

Solicit Feedback from Your Employees

 

There's only one way to make sure your workers are happy with new technology—and on the job in general. Ask them. There are many ways to solicit employee feedback. Officevibe provides tips for getting honest opinions, from ensuring their anonymity to establishing trust. Also, consider the medium you use. Face-to-face feedback can be tough, for example. Many people prefer providing feedback in a less personal format, such as via a written survey.

 

Solicit Feedback from Your Employees

 

Technology can help your business achieve great things. However, you don't want to implement cutting-edge tech at the expense of employee satisfaction. The above guide explains how to strike the right balance.

 

If you want to provide more benefits to your employees, but you aren’t sure if you can manage it financially, contact the experts at Alliance Financial and Income Tax. We can help you create a realistic plan that honors your staff and maintains your finances.

When to Hire a Tax Professional

Your income tax preparation needs are as individual as you are. Alliance Financial & Income Tax takes an active approach to our tax planning and tax preparation services, giving you the personalized guidance you need. Today's tax laws are so complicated that filing taxes, no matter how simple, can quickly become confusing.

10 million taxpayers missed out on a chance to receive a bigger refund last year simply because they neglected to fill out one line on their tax return. Will you miss a similar opportunity this year?

https://www.afitonline.com/p/income-tax-preparation

#AFITtaxprep

 

2022 Individual Taxpayers: The Year in Review

 

As we close out the year and prepare for tax season, here's what individuals and families need to know about tax provisions for 2022.

Personal Exemptions
Personal exemptions are eliminated for tax years 2018 through 2025.

Standard Deductions
The standard deduction for married couples filing a joint return in 2022 is $25,900. For singles and married individuals filing separately, it is $12,950, and for heads of household, the deduction is $19,400.

The additional standard deduction for blind people and senior citizens in 2022 is $1,400 for married individuals and $1,750 for singles and heads of households.

Income Tax Rates
In 2022 the top tax rate of 37 percent affects individuals whose income exceeds $539,900 ($647,850 for married taxpayers filing a joint return). Marginal tax rates for 2022 are as follows: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. As a reminder, while the tax rate structure remained similar to prior years under tax reform (i.e., with seven tax brackets), the tax-bracket thresholds increased significantly for each filing status.

Estate and Gift Taxes
In 2022 there is an exemption of $12.06 million per individual for estate, gift, and generation-skipping taxes, with a top tax rate of 40 percent. The annual exclusion for gifts is $16,000.

Alternative Minimum Tax (AMT)
For 2022, exemption amounts increased to $75,900 for single and head of household filers, $118,100 for married people filing jointly and for qualifying widows or widowers, and $59,050 for married taxpayers filing separately.

Pease and PEP (Personal Exemption Phaseout)
Both Pease (limitations on itemized deductions) and PEP (personal exemption phase-out) have been eliminated under TCJA.

Flexible Spending Account (FSA)
A Flexible Spending Account (FSA) is limited to $2,850 per year in 2022 and applies only to salary reduction contributions under a health FSA. The term "taxable year" as it applies to FSAs refers to the plan year of the cafeteria plan, which is typically the period during which salary reduction elections are made.

Long-Term Capital Gains
In 2022 tax rates on capital gains and dividends remain the same as 2021 rates (0%, 15%, and a top rate of 20%); however, taxpayers should be reminded that threshold amounts don't correspond to the tax bracket rate structure as they have in the past. For example, taxpayers whose income is below $41,675 for single filers and $83,350 for married filing jointly pay 0% capital gains tax. For individuals whose income is at or above $459,750 ($517,200 married filing jointly), the rate for both capital gains and dividends is capped at 20 percent.

Miscellaneous Deductions
Miscellaneous deductions that exceed 2 percent of AGI (adjusted gross income) are eliminated for tax years 2018 through 2025. As such, you can no longer deduct on Schedule A expenses related to tax preparation, moving (except for members of the Armed Forces on active duty who move because of a military order), job hunting, or unreimbursed employee expenses such as tools, supplies, required uniforms, travel, and mileage.

Business owners are not affected and can still deduct business-related expenses on Schedule C.

Individuals - Tax Credits

Adoption Credit
In 2022 a nonrefundable (i.e., only those with tax liability will benefit) credit of up to $14,890 is available for qualified adoption expenses for each eligible child.

Child and Dependent Care Credit
If you pay someone to take care of your dependent (defined as being under the age of 13 at the end of the tax year or incapable of self-care) to work or look for work, you may qualify for a credit of up to $1,050 or 35 percent of $3,000 of eligible expenses in 2022. For two or more qualifying dependents, you can claim up to 35 percent of $6,000 (or $2,100) of eligible expenses. For higher-income earners, the credit percentage is reduced, but not below 20 percent, regardless of the amount of adjusted gross income. This tax credit is nonrefundable.

Child Tax Credit and Credit for Other Dependents
For 2022, the child tax credit reverts to $2,000 per child, under the age of 17. The refundable portion of the credit is $1,400 in 2022, so that even if taxpayers do not owe any tax, they can still claim the credit. A $500 nonrefundable credit is also available for dependents who do not qualify for the Child Tax Credit (e.g., dependents age 17 and older).

Earned Income Tax Credit (EITC)
For the tax year 2022, the maximum earned income tax credit (EITC) for low, and moderate-income workers and working families increased to $6,935 (up from $6,728 in 2021). For taxpayers with no qualifying children, the maximum credit is $560.

The maximum income limit (three or more qualifying children) for the EITC increased to $59,187 (up from $57,414 in 2021) for married filing jointly and $53,057 for taxpayers whose filing status is single or head of household. The credit varies by family size, filing status, and other factors, with the maximum credit going to joint filers with three or more qualifying children.

Individuals - Education Expenses

Coverdell Education Savings Account
You can contribute up to $2,000 a year to Coverdell savings accounts in 2022. These accounts can be used to offset the cost of elementary and secondary education, as well as post-secondary education.

American Opportunity Tax Credit and Lifetime Learning Credit
The maximum credit is $2,500 per student for the American Opportunity Tax Credit. The Lifetime Learning Credit remains at $2,000 per return. To claim the full credit for either, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly).

Employer-Provided Educational Assistance
As an employee in 2022, you can exclude up to $5,250 of qualifying postsecondary and graduate education expenses that are reimbursed by your employer.

Student Loan Interest
In 2022, you can deduct up to $2,500 in student-loan interest as long as your modified adjusted gross income is less than $70,000 (single) or $140,000 (married filing jointly). The credit cannot be claimed if your modified adjusted gross income (MAGI) is more than $85,000 for single filers ($170,000 if married filing jointly).

Individuals - Retirement

Contribution Limits
For 2022, the elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is $20,500. For persons age 50 or older in 2022, the limit is $27,000 ($6,500 catch-up contribution).

Retirement Savings Contributions Credit (Saver's Credit)
In 2022, the adjusted gross income limit for the saver's credit for low and moderate-income workers is $68,000 for married couples filing jointly, $51,000 for heads of household, and $34,000 for married individuals filing separately and for singles. The maximum credit amount is $2,000 ($4,000 if married filing jointly). As a reminder, starting in 2018, the Saver's Credit can be taken for your contributions to an ABLE (Achieving a Better Life Experience) account if you're the designated beneficiary. However, keep in mind that your eligible contributions may be reduced by any recent distributions you received from your ABLE account.

If you have any questions about these and other tax provisions that could affect your tax situation, don't hesitate to call.