CLOSTER, N.J. -- Yes, the clock is ticking on filing your taxes, but Closter accountant Jeff Novack says that doesn't mean you have to panic. He offers five simple steps:
• Don’t miss the April 18 deadline to file a return -- or an extension. Many taxpayers bury their heads in the sand, especially if they can't cover what they owe. What they don't realize is that filing a return on time can save penalties of 5% of the unpaid taxes per month, up to maximum of 25%. Filing your return -- or an extension -- on time can avoid that.
• Establish a relationship with a tax professional and remain loyal if you're getting quality work. Some taxpayers try to accountant-shop for what they think will be a better price and end up losing work in the transition. And while tax software might save you some money in the short term, you could be leaving even more on the table. It takes a significant amount time preparing your own return or using a larger tax franchise -- leaves no ability for tax planning.
• Social Security isn’t always tax free: It can be up to 85% taxable if you have other taxable income. In addition, 13 states tax Social Security at the state level. This is usually a surprise to new retirees who don’t take federal withholding on Social Security payments.
• Newlyweds should consult their accountant the year prior to getting married to determine the tax implication of the combining their incomes. If your married on Dec. 31, you're considered married for the year. If both are working it is usually necessary to increase federal withholding to adjust for the additional tax burden.
• Business owners and self-employed taxpayers can deduct up to 25% of their compensation up to $53,000 by funding a SEP IRA. The deadline for funding is 4/18 -- or the extended deadline if a timely extension was filed.MORE: http://www.clostertaxpreparation.com/
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