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Income tax deadline draws closer

Preparers keep up with changes

POSTED: April 3, 2014 12:03 a.m.
 

CUMMING — If you haven’t already, it’s time to start thinking income taxes.

The deadline to file those returns with the Internal Revenue Service is less than two weeks away.

Unlike some recent years when the April 15 deadline fell on a Sunday or was impacted by Emancipation Day, a holiday celebrated in Washington, D.C., resulting in a slight extension to filers, this year’s deadline is firm.

“The 15th is actually on the 15th this year,” said Judy Pair, a franchise owner of three H&R Block locations in Forsyth County. “So we don’t get any free days this year.”

Pair said each year brings additions and changes to federal tax law, so it’s important for people to take advantage of professional preparers who can help them submit the best possible return.

“It is more and more complicated every year and there are things that the average, normal person might not be aware of that could come up,” she said. “Things like the one we’re seeing right now a lot when parents have children in college who have scholarships.

“There are ways to structure those scholarships to maximize the benefit and the computer software that’s out there doesn’t even really address that.”

Pair said some big changes to the law this year revolve around the Affordable Care Act and changes to the Medicare tax.

“The health care [law] is kicking in, so people need to be thinking about getting their health insurance coverage,” she said, noting that everyone was supposed to be covered by Tuesday of this week.

“But [penalties] are based on how many months they’re late. So if they can get health coverage, the sooner they can get it the better.”

In addition, she said capital gains rates are being calculated differently.

“There’s a net investment income tax that is actually an additional Medicare tax, but it’s invoked on the return if people have more than $250,000 worth of net income and they have investment income,” Pair said.

Also, she said, people who have wages more than $200,000 per year are going to pay an additional 0.9 percent in Medicare taxes.

“It’s something that their employer will start withholding once their W2 hits $200,000,” Pair said.

Pair also said she and her staff of about 40 preparers throughout the county are seeing more start-up businesses.

“People who are starting a new business need to come in when they start or are thinking about starting and talk with us about the different options on the form of the business for tax purposes, what form is going to work best for them and how they need to keep their records,” she said.

“If they start that business from the beginning with the proper kinds of record-keeping then it will be much easier down the road.”

 

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