Friday, January 6, 2017

IRS Sets Rules for 1099's

The Internal Revenue Service (IRS) requires you to report certain payments you make as part of your business (including rental properties) to both the payee and IRS.  There are new tax law changes regarding 1099-MISC forms that we felt you needed to be made aware of.

If you paid anyone $600 or more during 2016, you and/or your business may need to issue Form 1099-MISC to the individuals or businesses that you paid.  This memo will explain your requirements and the penalties for not following the new regulations.  We will also explain the costs to engage Northeast Financial Strategies Inc. to prepare these forms for you.

When is a 1099-MISC Required?

You are required to report on Form 1099-MISC when payments are made in the course of your trade or business.  This business can be from general business, farming, rentals or any trade or business in which you own with intent to operate for gain or profit.

Tuesday, January 3, 2017

IRS Standard Mileage Rates Starting January 1, 2017

Instead of using the business portion of the actual expenses of operating a vehicle, IRS permits taxpayers to use a standard mileage rate.  The rates have now been released for travel on or after January 1, 2017.

Business rate is 53.5 cents per mile (down from 54 for 2016).  The depreciation portion of this rate is 25 cents per mile (up from 24 for 2016).

Charitable rate is 14 cents per mile and is set by Congress therefore will not change until Congress makes such a change.

Medical and moving rate is 17 cents per mile (down from 19 for 2016).

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Sunday, January 1, 2017

Happy New Year from NFS





Here's to a Happy, Healthy and Prosperous New Year!

"Always bear in mind that your own resolution to succeed is more important than any other."
-Abraham Lincoln

Friday, December 23, 2016

Happy Holidays from NFS


Your friends at Northeast Financial Strategies want you to know how much your loyalty and friendship are appreciated this year and in all years past. At the holiday season, our thoughts turn gratefully to those who have made our success possible. It is in this spirit we say ... thank you and best wishes for the holidays and a happy new year.

From all of us here at NFS, THANKS!!

Monday, November 28, 2016

Tax Aspects of Divorce and Separation


When it comes to legal separation or divorce, there are many complex situations to address. A divorcing couple faces many important decisions and issues regarding alimony, child support, and the fair division of property. While most courts and judges will not factor in the impact of taxes on a potential property settlement or cash payments, it is important to realize how the value of assets transferred can be materially affected by the tax implications.

Dependents

One of the most argued points between separating couples regarding taxes is who gets to claim the children as dependents on their tax return, since joint filing is no longer an option. The reason this part of tax law is so important to divorcing parents is that the federal and state exemptions allowed for dependents offer a significant savings to the custodial parent, and there are also substantial child and educational credits that can be taken. The right to claim a child as a dependent from birth through college can be worth over $30,000 in tax savings.

The law states that one parent must be chosen as the head of the household, and that parent may legally claim the dependents on his or her return.

Example: If a couple was divorced or legally separated by December 31 of the last tax year, the law allows the tax exemptions to go to the parent who had physical custody of the children for the greater part of the year (the custodial parent), and that parent would be considered the head of the household. However, if the separation occurs in the last six months of the year and there hasn't yet been a legal divorce or separation by the year's end, the exemptions will go to the parent that has been providing the most financial support to the children, regardless of which parent had custody.

A non-custodial parent can only claim the dependents if the custodial parent releases the right to the exemptions and credits. This needs to be done legally by signing tax Form 8332, Release of Claim to Exemption. However, even if the non-custodial parent is not claiming the children, he or she still has the right to deduct things like medical expenses.

Child support payments are not deductible or taxable. Merely labeling payments as child support is not enough -- various requirements must be met.

Alimony

Thursday, November 24, 2016

Happy Thanksgiving from NFS



From All of us here at

Northeast Financial Strategies, Inc.

WE GIVE THANKS...

... For Our Families
... For Our Friends
... Four Our Clients
... For Our Communitiy
... For You

HAPPY THANKSGIVING!

Wrentham Thanksgiving, Wrentham Outlets, Wrentham Black Friday

Wednesday, November 16, 2016

How to Avoid an IRS Tax Refund Delay; Plan Ahead

WASHINGTON – As tax filing season approaches, the Internal Revenue Service is reminding taxpayers about steps they can take now to ensure smooth processing of their 2016 tax return and avoid a delay in getting their tax refund next year.

The IRS reminds taxpayers to be sure they have all the documents they need, such as W-2s and 1099s, before filing a tax return. You may also need a copy of your 2015 tax return to make it easier to fill out a 2016 tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income amount from a prior tax return to verify their identity. Learn more about how to verify your identity and electronically sign your tax return at Validating Your Electronically Filed Tax Return. The IRS will begin accepting and processing tax returns once the filing season begins.

Under the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), any Individual Taxpayer Identification Numbers (ITIN) issued prior to 2013 or that haven’t been used for tax-years 2013, 2014 and 2015 will no longer be valid for use on a tax return as of Jan. 1, 2017. Individuals with expiring ITINs who need to file a return in 2017 will need to renew their ITIN. This process typically takes 7 weeks to receive an ITIN assignment letter, but the process can take longer - 9 to 11 weeks if taxpayers wait to submit Form W-7 during the peak filing season, or send it from overseas. Taxpayers who do not renew an expired ITIN before filing a tax return next year, could face a delayed refund and may be ineligible for certain tax credits. For more information, visit the ITIN information page on IRS.gov.

If you claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) on your tax return, the IRS must hold your refund until February 15. This new law requires the IRS to hold the entire refund — even the portion not associated with EITC or ACTC. This change helps ensure that you receive the refund you are owed by giving the agency more time to help detect and prevent fraud.

Friday, November 11, 2016

Happy Veterans Day From NFS





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