Pace Accounting & Tax Services, Inc.

Saying Goodbye to a Tax Credit

Nick Tylipakis — Thu, 02 Feb 2012 01:52:32 +0000

For tax year 2011, employees had 2% less withheld from their gross paychecks from both social security and medicare tax withholdings. This gave these same employees a slightly higher net paycheck throughout the year.

Unfortunately, this immediate incentive took the place of the “Making Work Pay” credit that taxpayers enjoyed for tax years 2009 and 2010. The “Making Work Pay” credit was awarded in the amount of $400 for individuals and $800 for joint filers; with the latter amount doing one of two things for joint filers: it either increased their refund or decreased their tax liability at the end of the year.

But take note again that the “Making Work Pay” credit was only made available for the last two years of tax filing incentives, and has been discontinued for tax year 2011. Therefore, and again, considering all else stays the same, taxpayers will see a slight difference when they file their taxes for 2011. And this is mostly due to the 2% decrease in social security and medicare tax withholdings from employee paychecks.

What is Probate?

Raymond Pace — Thu, 26 Jan 2012 15:17:04 +0000

What is probate and when is it required?

We hear so often that when someone dies, their estate must be probated. Basically, what that means is that a state court implements a system to approve how the assets of the deceased are transferred to others.

Every state has different requirements as to what the value of the assets must be before probate is necessary. Generally, these requirements fall between $20,000 to $100,000 in what are termed “probate assets.” In New York State, for example, the probate asset amount is set at $30,000.

So, what are probate assets? Probate assets include a list of the following: assets owned solely by the decedent; any assets the decedent had a share of as a tenant in common or community property, and any life insurance, annuities or retirement assets that had either no beneficiary designation or the estate as the named beneficiary.

Any assets jointly owned with right of survivorship or trust designation will avoid probate. However, consider that even if you have a will, probate will be required if the probate assets value exceeds the state’s dollar threshold amount.

Maximizing Your Child Tax Credit

George Tylipakis — Thu, 19 Jan 2012 17:29:54 +0000

If you file as a married couple, have children and your annual combined gross income is greater than $110,000 but less than $129,000 (one child) or $149,000 (two children), you should be making a valiant effort to maximize the child tax credit.

Clients ask me for suggestions about ways to increase their refund and save their hard-earned money. You might be surprised by how many married filing joint taxpayers with two children who earn $150,000 lose the child tax credit due to phase-out rules. Many of them have a 401(k) plan at work into which they don’t contribute a penny. In some instances, the company they work for will match up to a certain percent – and they still don’t contribute.

If the above criteria applies to you, and you have the option to defer some of your income into an employee sponsored 401(k), do so. You will decrease your taxable income, save for retirement and now qualify for a portion of the child tax credit. The more you defer into your 401(k), the higher the child tax credit amount that you will qualify for.

Annual Gift Tax Exclusion for 2012

Jeanette Calabrese — Mon, 09 Jan 2012 16:51:41 +0000

“How much can I give someone as a gift before I have to file a gift tax return”? This is the typical question I get asked a lot in my years being an Accountant. The Annual Gift Tax Exclusion has not gone up from 2011, it will remain at $13,000 a year per donee (person who receives the gift) for 2012. The exclusion for a Married couple will be $26,000 a year per donee. If a taxpayer goes beyond the exclusion for a donee, then a gift tax return needs to be filed (Form 709). A married couple that are Citizen’s have unlimited exclusion and could transfer any amount of gifts to the other spouse without worrying about having to file a gift tax return. There are restrictions if it is a non-citizen spouse and in that case the gifts are limited to $139,000, which went up a little from last year.

Therefore, to give one example: You could give a gift of $13,000 a year each to your daughter, son, mother, a friend, a cousin, your Accountant…without having to file a gift tax return. Your spouse could do the same to the same people if you wish in the same year. Therefore, if you both gave gifts to the same people, they will receive a gift of $26,000 in that year and they can still receive gifts from more people within that year as long as it’s different people giving them the gifts. If you go over the $13,000 a year limit per donee, then a gift tax return will be necessary to file….and our firm will be able to handle that for you.

Please contact us if you have any questions or concerns regarding Gift Tax or any other questions that we could help you with.

Tax season is starting soon, please call us to schedule your appointment or to make it more convenient for you, you could mail, e-mail, fax or drop off your taxes. As always, we appreciate your business and greatly appreciate when you refer us to your family and friends.

Income Tax Filing for NYS Same-Sex Married Couples

Chris Pace — Thu, 05 Jan 2012 02:27:59 +0000

On July 24, 2011 the Marriage equality act was passed giving Same-Sex couples in NYS the right to marry.

Couples married as of December 31, 2011 in NY or in any other state or country that recognizes same-sex marriage will be considered married for the entire year, which means they MUST file a NYS Joint tax return or file as Married Filing Separate.

Not to spoil the excitement, but same sex married couples will not have it easy when filing their income tax returns for 2011. Filing taxes for same-sex spouses will be more complicated since the federal government does not recognize the marriage. To prepare your NYS Joint Tax Return, your tax accountant will need to prepare a “dummy” federal tax return using a married filing status so that your credits, income and deductions flow correctly. Many individuals will face higher tax preparation fees do to the complexity and time involved to file the tax returns.

The good news is that Same-Sex couples may have some tax advantages when filing their Federal tax returns. Some key strategies is shifting income to the spouse with the lower income or including deductions such as real estate taxes to the partner with the higher income. This shifting of income and expenses could generate significant tax savings for both partners. To best shift your income, consider holding your assets jointly. Your tax advisor will carefully consider these strategies when preparing your tax returns.

Please contact us if you have any questions or concerns.

Personal Services

sakinshrestha — Tue, 01 Nov 2011 08:16:25 +0000

At Pace Accounting, we take the time to understand your situation so that we can maximize returns for the biggest tax reward.

Tax Return Preparation
Amended Tax Returns
Co-op Financial Review
Estimated Tax Planning

Handling All 50 States
Consulting
Notary Public

Business Services

sakinshrestha — Tue, 01 Nov 2011 08:15:51 +0000

Your tax advisor should feel like an extension of your workforce. We take the tax burden off your shoulders so you can concentrate on building your business.

New Business Startup
Tax Compliance
Financial Review
Estimated Taxes
Annual Report Filings

Payroll
Sales Tax
Bookeeping
Income Tax Returns
and more..

See what our clients are saying.

sakinshrestha — Sun, 30 Oct 2011 09:50:32 +0000

We focus on helping our clients reach their goals while keeping them tax compliant and up to date with tax law changes.

Meet the people you trust.

sakinshrestha — Sun, 30 Oct 2011 09:48:43 +0000

Our team strives to provide you with the very best objective advice and solutions to help guide you towards your financial success.

Raymond J. Pace

sakinshrestha — Sun, 30 Oct 2011 09:47:44 +0000

Raymond J. Pace

Ray is our firm’s founder which he started as a sole proprietor in 1969. In the early days of Pace Accounting, we only prepared personal income tax returns. Today we have grown to a full service accounting and tax practice in which his son and daughter have joined. Ray has a BBA from Pace University and an MBA from St. John’s University.