Paldino Company CPA - "Success Starts with a Handshake"

Welcome to my blog page the purpose of which is to provide you with timely and relevant tax and accounting information. I intend to bring you information which you can use now to assist you in lowering you income taxes. I will when appropriate give you links to tax related web-sites, worksheets and check-list to assist you in meeting you recording keeping requirements and provide you with the information you need to prepare an accurate return and pay the least amount of tax you are legally required to pay. Please check back often and feel free to post your questions and comments















Monday, October 22, 2012

Social Security Benefits Announced for 2013



Social Security Benefits Announced for 2013



The Social Security Administration recently announced monthly social security and supplemental security income benefits (SSI) will increase in 2013 by 1.7%. This increase is based upon the Consumer Price Index over the past 12 months ending in September 2012. In addition, other figures based on the national average wage index will also be changed. A recap of the key amounts is outlined here:

2013 Key Social Security Benefits

2013 Social Security Benefits

What does it mean for you?

  • Up to $113,700 in wages will be subject to Social Security Taxes  (up $3,600 or $446 in additional tax per employee)
  • The average Social Security retirement beneficiary will receive an additional $252 in 2013.
  • For all retired workers receiving Social Security retirement benefits the average monthly benefit of $1,240/mo. in 2012 will become $1,261/mo. in 2013.
  • SSI (Supplemental Security Income) is the standard payment for people in need.  To qualify for this payment you must have little income and few resources ($2,000 if single/$3,000 if married).
  • A full-time student who is blind or disabled can still receive Supplemental Security Income (SSI) benefits as long as earned income does not exceed the student exclusion amounts listed above.

Warning: There’s also a 2% withholding increase!

Remember to plan for the expiration of the temporary payroll tax cut at the end of 2012. This will be automatically reflected in your paychecks beginning in 2013:
2013 Withholding Limits
Note: The above tax rates are a combination of Social Security (4.20% in 2012; 6.20% in 2013) and 1.45% for Medicare. There is also a Medicare .9% wages surtax that is scheduled to begin in 2013 for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in the 2013 figures. Please recall that your employer also pays Social Security and Medicare taxes on your behalf. These figures are reflected in the self-employed tax rates, as self-employed individuals pay both halves of the tax.

Friday, October 12, 2012

Tips to Maximize Your Mileage Deduction



Tips to Maximize Your Mileage Deduction





Each year standard mileage rates are set by the IRS. For 2012 they are:

Business Travel: 55.5¢/per mile
Medical/Moving: 23¢/per mile
Charitable Work: 14¢/per mile

Too often this deduction is overlooked because proper documentation was not followed. Here are a few tips to ensure you receive the full benefit of this tax deduction.

Tip 1: Track your applicable mileage in an auto log. This log is required to ensure your deduction is not disallowed during the course of an audit. Please make sure the business/charitable/medical purpose, date and distance is clearly noted.
Tip 2: Also keep track of parking, tolls and other miscellaneous travel expenses. These can often be deducted in addition to the standard mileage rate.
Tip 3: Submit expense reports if your mileage can be reimbursed. Most employers will reimburse you for business mileage at the approved rate, but many employees fail to ask for reimbursement. Remember, your employer can deduct this reimbursed expense on their tax return as well.
Tip 4: Keep track of medical miles. Even though you need to surpass a percent of your income prior to taking medical expenses as an itemized deduction, still keep track of qualified medical miles. It often only takes one major medical bill to make all your other excess medical expenses deductible.
Tip 5: Plan your business trips to ensure your miles are deductible. Commuting miles to and from work are not deductible. However, if you stop off at a supplier first, then the mileage from the supplier to your workplace is a deductible expense.
Tip 6: Do not forget charitable miles. This deduction is one of the most often overlooked deductions. Do you drive for Meals on Wheels or for a school function? Do you volunteer as a coach for a non-profit sporting group? These miles add up over time and are often not properly documented.