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Anne Powelson

Anne Powelson

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Wednesday, 15 January 2014 01:27

What's new with taxes?

Will you see a tax change this year? Probably; here are some significant changes:

Maine resident? 

Wednesday, 20 November 2013 19:56

Simplified home office deduction

For 2013, small businesses have a new option when deducting home office expenses. They can use the old method, or the new simplified method, which promises less record keeping.  

The requirements which must be met before claiming a home office deduction haven't changed. The office space must still be used regularly and exclusively for business (with the usual exceptions to exclusive use for daycare and inventory space.)

Wednesday, 09 October 2013 15:58

The Affordable Care Act and premium assistance

Did you know that premium assistance for individual insurance under the Affordable Care Act is an advance on a 2014 tax credit? If you are thinking of using the marketplace to buy insurance, that distinction is important, as are these other questions.

What is my family size for the ACA? 

Your family size is all people for whom you properly claim a deduction.

Tuesday, 13 August 2013 21:05

R.I.P. property tax and rent rebate

Looking for Maine Property Tax and Rent Rebate (Circuit Breaker) forms? Whether you always file or were hoping to file for the first time this year, you're not going to find them. Maine's legislature did away with the program in June of this year.    

In its place is a new tax credit, the Property Tax Fairness Credit. This new credit is part of your 2013 Maine Income Tax Return. It's refundable, so even if you don't owe Maine taxes, you might get money back. 

Wednesday, 13 March 2013 16:40

Where's my refund?

Where's my refund? You're not alone in wondering; the IRS site for checking on refunds cautions that heavy use may limit its availability.

Tax season has had an unusual start. Very few returns were accepted prior to Jan. 30. Returns requiring a depreciation form were not accepted until Feb. 11. Returns claiming educational credits were delayed until Feb. 14. Residential Energy credits and Adoption Credit returns weren't accepted until March.  

Wednesday, 13 February 2013 14:50

Tax questions everyone asks

Whether you've just gotten your first W-2 or have been filing for years, there are a few questions everyone asks.

Why did I get this 'Important Tax Form'? 

Every tax form you receive has also been sent to the IRS. Some forms, like W-2s and 1099s, list income you need to report.  Forms starting with '1098' or '5498' often list potential deductions. 

Wednesday, 09 January 2013 14:34

Remember the Maine (tax changes)

The Federal Tax Code and the impact of the fiscal cliff received most of the publicity recently. But Maine also has changes affecting your take home pay and 2012 tax preparation. Some of these changes affect everyone having taxes withheld. Others affect fewer filers, but can have a big impact on their Maine taxes.

Thursday, 13 December 2012 12:36

Stumbles ahead of the tax cliff

 Negotiations for the 'fiscal tax cliff' concern mostly 2013 tax rates, deductions and credits. But there are several stumbling blocks ahead affecting 2012 taxes; the taxes to be filed starting in January.

Wednesday, 12 September 2012 14:37

Tax cliffs

Many tax benefits gradually fadeout over as income increases. But not all: Tax cliffs have a hard and fast line where $1 more in income can cost far more in tax benefits. Don't believe me? Check out these three tax cliffs.

Earned Income Credit and Investment Income: Threshold not to pass: $3,200 in investment income. Benefit at risk: from $2 to $5,891. Earned income credit is a reward for working and is figured on four criteria: Adjusted Gross Income, Earned Income, Marital Status and Qualified Children. The credit is not a set amount; it varies from as little as $2 to as much as $5,891. But all along the range, if your investment income exceeds the cap ($3,200 in 2012) you're no longer eligible. Investment income can come from interest, dividends, sales of stocks, redeeming savings bonds AND rental property.

Here's a story that might make you feel better if you weren't one of the 10,000 Mainers receiving a rebate under the Affordable Care Act. Turns out, in some cases the rebates will be taxable.

Why might these refunds be considered taxable? If you are refunded an expense you deducted in a prior year, then the refund can be taxable. This is most commonly seen in state tax refunds. If you deduct state income taxes on your federal return and receive a refund from the state, that refund may be taxable in the tax year it is received. The taxable amount is never in excess of the amount which provided you with a tax savings. As an example, an individual with only one deduction has $6,700 in state taxes withheld in 2011. On her federal tax return, she itemizes state taxes withheld as shown on her W-2. But in this example, she owes $0 to the state, so in 2012 she gets all $6,700 back. The $6,700 is not all taxable, only $1,000, which is the difference between what she'd itemized that year and the standard deduction for 2011: $5,700.

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