Tuesday, January 31, 2012

Fees for Tax Preparation

Question: Can you give me an estimate of how much you charge for Income Tax services.
My situation: Two working adults + one 5 year old daughter, own house, itemized deductions, no surprises.

Our base fee for the tax preparation is $200 for the 1040, Schedule A, and State of Delaware return. Additional schedules required will be in addition to this fee. We also offer a $35 discount for all new clients. I have attached our new client package for your review. We look forward to serving you, simply go to our website at www.saggioaccounting.com and click on “Book Now” or contact our office at 302-659-6560.
New Client Package

Monday, January 30, 2012

Introducing the new Billboard Ad - Locate it and get $50

Our new billboard ad launched today. The first person to send an email to ralph@askralph.com with the exact location and the slogan on the billboard will get $50 off their tax preparation. Be on the look-out and be the first to find it and get a great discount.

Streamlined installment agreement program modified

This is a positive change. For assistance with Internal Revenue Service installment agreements, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at (302) 659-6560 or visit our website at www.askralph.com

Streamlined installment agreement program modified

Select the "Best" Tax Accountant

Here is a great report about the importance of selecting a qualified tax accountant. When you are ready to file, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or visit our web site at www.saggioaccounting.com

Sunday, January 29, 2012

Ask Ralph Radio Ad

Here's the new Ask Ralph radio ad...just click on play.

Internet Based Business Structure

Question: Hey Ralph, I am an Australian Resident, but am working with a few folk in the USA and we are in the process of setting up an internet based business. We believe the business has quite large growth potential and have outside investors supporting the business. One of those investors is a US Citizen and will act as a US resident director. I was a VP at (omit)and (omit) and am quite used to taking small businesses and making them large. Important thing is that we have a good corporate structure in the USA for ongoing growth (different types of shares plus flexibility in corporation setup) and to keep the costs down at this stage of the game. Are you in this business? If so what are the fee structures/options available?

Answer: This is a great question. When it comes to corporation setup we will leave that to the legal guys. I will recommend someone to you in a private e-mail. Due to the complex nature of what you are looking to do, I would recommend you invest some time and effort in the set-up of the legal entity. It may be somewhat complex since you will have what appears to be both US and foreign investors. Once you have established the entity we could certainly work with you in developing the appropriate tax structure for your entity. We can work with your attorney as well in consultation as to the tax ramifications of the entity structure, but we will leave the legal side of this to the attorney.

For assistance with tax implications of your business entity, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or visit our website at www.saggioaccounting.com.

Can I deduct my dental expenses?

Question: My dentist just told me that I have to get a root canal and he said the cost would be over $4000. He also mentioned that since I don't have dental insurance I should check with my accountant and see if the dental expenses are tax deductible. Please help me so I can figure our if these dental expenses will be a tax deduction.

Answer: First a toothache and now you have a financial ache as well. Hope your root canal goes well, I have been putting one off for some time, I guess once the tooth starts hurting I will be forced to do something about it. Nevertheless, your question is a good one and a question we get routinely. Dental expenses fall under the "medical" expense category and they ARE a tax deduction with some limitations. First of all, medical/dental expenses are a Schedule A itemized deduction so you will have to itemize in order to take advantage of these expenses. You should also be aware that their is a 7.5% limitation based on your Adjusted Gross Income, so you cannot deduct these medical expenses until they exceed 7.5% of your AGI. On of the strategies which we suggest to our clients if they know they will need major medical/dental treatments is to load all of these into a particular year if possible, so they will reach the limitation without effort. This works were well for elective procedures, but of course that is on a case-by-case basis. Good luck with the dental work!

Ralph V. Estep, Jr., of Saggio Accounting+PLUS works to build life-long relationships with his clients. Call Ralph today at (302) 659-6560 or visit the website at www.askralph.com.

We are now on TaxBuzz

We are now participating on the TaxBuzz site, follow our link

Travel expenses on my tax return

Question: Ralph, I was just recently promoted to a sales position with my company and they now require that I travel throughout the East Coast visiting clients. My company picks up the costs of my airline flights and my hotels room, they even have been giving me $25 per day for meals. I was wondering if I have to report the $25 per day as income and if I can deduct my other expenses since I now have to pay for taxis from the airport, hotel laundry services and my meals generally cost more than the $25 per day since my clients are in the larger cities. Please help, this is very confusing to me.

Answer: First of all congratulations on your promotion. The move to a sales position can be difficult to manage at first, but most of our clients who take on sales positions find them very rewarding both for their career and financially. You must also take a closer look at your expenses because you will miss out on some deductible expenses. Since your employer is covering the costs of your airline and hotel and even giving you a modest daily meal stipend, they are probably taking care of most of the expenses. You will want to keep track of the balance of your expenses so at tax time we can take a deduction. Keep track of all of your unreimbursed expenses and make sure you mention them when you prepare your taxes. These deductions are Misc. itemized deductions and they are taken on your Schedule A of your tax return. These deductions are subject to a 2% limitation based on your Adjusted Gross Income, but with the amount of travel you will most likely undertake, you will find this to be a potentially fruitful deduction.

For navigating this tax issue as well as other tax complications, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or visit our website at www.saggioaccounting.com

Friday, January 27, 2012

$35 Coupon for New Clients

Shoebox of Receipts

Question: Ralph, My girlfriend already has her taxes done, and has a refund on the way. I just have a shoebox of receipts, which I know is not going to help you do my taxes. What do I need to do to get organized? Thanks

Answer: Well at least your better half is off to a good start. I would suggest you go to our website at www.saggioaccounting.com and click on the About Us tab and then select the Document Library, there you will find a "New Client Package" which contains a great Tax Organizer. We also have some great links to assist you with putting together your records under our "Information Center" tab. You will find numerous guides for handling your particular industry.

Since you say you have a shoebox of receipts, I assume you may have your own business. These returns can get very complicated and you need the services of a true professional to help reduce your potential tax exposure. You will want to start by totaling all of the income your received from your customers. This is your "Revenue" and this is where we will start the process. You will then need to sort your receipts by category and then total them up by category. These are your "Expenses." The difference between your Revenue and Expenses will by your net income. We will have some other ideas for you when you come in for an appointment, but you will want to also write down all of your "Business" mileage as well as any purchases of equipment, these are called "Assets" and they are treated a little different from expenses.

Like I said, these returns get complicated quickly and you don't want to end up paying more than your fair share, unless you feel like making a donation to the Internal Revenue Service, but that's no fun! When you are ready contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or visit our website at www.saggioaccounting.com and click on the "Book Now" icon to set-up an appointment. We are eager to start a relationship with you so let's hear from you soon.

Energy Crediits

Question: Good Morning, Mr. Estep

I'm preparing for our tax meeting and wanted to know, if there are any tax credits or deductions available this year for energy efficiency improvements?  We replaced 8 windows in our home, bought an Energy Star refrigerator and had additional insulation installed in our attic as well as having the basement sealed with foam insulation.  All together we spent approximately $9k.

Answer: Great question. Here is some excellent guidance right from the IRS web site.

Home Energy Credits Still Available for 2011

Special Edition Tax Tip 2011-08, November 21, 2011

The IRS reminds homeowners that they still have time this year to make energy-saving and green-energy home improvements and qualify for either of two home energy credits.
The Nonbusiness Energy Property Credit is aimed at homeowners installing energy efficient improvements such as insulation, new windows and furnaces. The credit is more limited than in the past years, but can still provide substantial tax savings.
  • The 2011 credit rate is 10 percent of the cost of qualified energy efficiency improvements. Energy efficiency improvements include adding insulation, energy-efficient exterior windows and doors and certain roofs. The cost of installing these items does not count.

  • The credit can also be claimed for the cost of residential energy property, including labor costs for installation. Residential energy property includes certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass fuel.

  • The credit has a lifetime limit of $500, of which only $200 may be used for windows. If the total of nonbusiness energy property credits taken in prior years since 2005 is more than $500, the credit may not be claimed in 2011.

  • Qualifying improvements must be placed into service to the taxpayer’s principal residence located in the United States before January 1, 2012.
Homeowners going green should also check out the Residential Energy Efficient Property Credit, designed to spur investment in alternative energy equipment.
  • The credit equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property.

  • No cap exists on the amount of credit available except for fuel cell property.

  • Generally, labor costs are included when figuring this credit.
Not all energy-efficient improvements qualify for these tax credits, so homeowners should check the manufacturer’s tax credit certification statement before they purchase. Taxpayers can normally rely on this certification statement which can usually be found on the manufacturer’s website or with the product packaging.

Eligible homeowners can claim both of these credits on Form 5695, Residential Energy Credits when they file their 2011 federal income tax return. Because these are credits and not deductions, they reduce the amount of tax owed dollar for dollar. An eligible taxpayer can claim these credits regardless of whether he or she itemizes deductions on Schedule A.

YouTube Videos:

For more specific information contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or visit our web site at www.saggioaccounting.com.

Documenting Charitable Contributions

Question: Good Evening Ralph. I donated a ton of clothes and other household items to the Goodwill in December. They told me that I could take a tax deduction on my tax return, but they just gave me a receipt that says I gave them 3 bags of clothes and a sofa. How do I go about taking this deduction on my tax return?

Answer: We get this question at least five times a day and it really does affect your tax return so this is important. Charitable contributions are a schedule A deduction. They are reported based on the type of donation. All cash/check donations are listed by the amount donated (less any goods/services received in the donation). When you donate some of your personal "treasures" you have to complete a separate tax form to the extent that the donation value exceeds a set amount. What we recommend for our clients is that they make an itemized list of the items which were donated and record a fair market value with each item. We then recommend that you attach this list to the receipt from the charity and put it with your tax papers for filing. If you have something which is of great value, you will want to have it appraised and you will want to retain this appraisal.

Tax returns can get very complex quickly, so it's really a great idea to find a qualified professional accountant to prepare your taxes plus give you great advice moving forward. Contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS for expert advice. "We are all about building relationships with our clients," says Ralph. Contact Saggio Accounting+PLUS at 302-659-6560 or www.saggioaccounting.com today.

Thursday, January 26, 2012

IRS Warns of Tax Refund Delays: Accounting Today

Great article about IRS refund delays. A must read.

IRS Warns of Tax Refund Delays: Accounting Today

Divorce is Unfair!

Question: Ralph, I was instructed by your staff to send you an E-mail question.

I am recently divorced (2010), with two kids.  I had 50% custody of my kids until late August 2011.  Due to proximity of school to mom, she now has kids more during school time (9 days in rolling 2 week schedule).   I have 50% time in summer.  I pay significant child support, including half of the Daycare costs.

The way I read the federal tax code last year, if parents have equal time with children, the parent paying child support (and higher income) may have all child credits. When I filed in April 2011, I gave my exwife one of the child tax credits since she asked, and i took one, since this seemed fair.

Now my ex wife is refusing to allow me to have the same arrangement this year.  She is planning to take both credits this year. 

Is there any way you can prepare a tax filling for me this year, which will allow me to have at least one child tax credit.  Our divorce papers are silent on this, and my lawyer said a good tax account may be better than a legal court argument.

Please help.


Answer: This is a really tough situation, but a situation we seem to see more often these days. Here is a great answer that I found on About.com

Qualifying Children

To be claimed as a qualifying child, the person must meet four criteria:Relationship — the person must be your child, step child, adopted child, foster child, brother or sister, or a descendant of one of these (for example, a grandchild or nephew).
Residence — for more than half the year, the person must have the same residence as you do.
Age — the person must be
  • under age 19 at the end of the year, or
  • under age 24 and a be a full-time student for at least five months out of the year, or
  • any age and totally and permanently disabled.
Support — the person did not provide more than half of his or her own support during the year.

Some Tips about Claiming Qualifying Children

The qualifying child must live with you for more than half the year. More than half a year means, at minimum, six months and one day. If you share custody, you may want to keep a log of where the child spends the night in your calendar or day planner. The new rules state that the qualifying child must not provide more than half of his or her own support. This is different from the old rules. Under the old rules, the taxpayer had to provide over half the support for the child. The change makes it easier for families relying on public assistance, charity, and gifts from family members to claim a dependent.
You might still be able to claim the child as a qualifying relative if the child does not meet the criteria to be a qualifying child. But the qualifying child rules always prevail over the qualifying relative rules. So you'll want to make sure the dependent would not qualify as a qualifying child for someone else before claiming a qualifying relative on your tax return.

Tie-Breaker Tests for Claiming a Qualifying Child

If two or more taxpayers claim a dependent as a qualifying child in the same year, the IRS will use the following tie-breaker tests to determine which taxpayer is eligible to claim the dependent. The tie-breaker tests are listed in order of priority.The child will be the qualifying child of:
  • the parent,
  • the parent with whom the child lived for the longest time during the year,
  • if the time was equal, the parent with the highest adjusted gross income,
  • if no taxpayer is the child's parent, the taxpayer with the highest adjusted gross income.

Some Additional Tips for Tie-Breaker Situations

A child can be the dependent of at most one taxpayer. If you qualify to claim the child, then be ready to submit documentation to the IRS to support your claim.Chances are the child will spend at least one day more with one parent than the other parent, since there are usually 365 days in a year. Consider keeping a log of where the child spends the night.
If the child spends exactly equal time with both parents, the parent with the higher income will be able to claim the dependent. Both parties can prevent an IRS audit by reviewing these tie-breaker rules in advance, and agreeing on who gets to claim the dependent.
The non-qualifying parent can claim the dependent ONLY IF the qualifying parent releases his or her claim to the dependency exemption. You accomplish this by using IRS Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents (PDF document). You can indicate on this form for which year or years you agree to release the exemption. You can also revoke the release if you later change your mind.

For more specific assistance with this and many other tax issues, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or you may visit our web site at www.saggioaccounting.com.

Lucky at the slots?

Question: Good evening Ralph. I was wondering about gambling winnings. The other night at the casino I won $1600. When the bells rang and the winnings were paid a casino employee came up and told me that I had to go to the cashiers window to claim my winnings. When I got to the window they asked for my name, address, and social security number. They also asked if I wanted to have any federal taxes withheld from my winnings. I was so shocked by all of this that I told them to just give me the money and don't take out any taxes. I usually never win, so this was quite an experience. What do I do now?

Answer: Congratulations! Lucky at the casino may not mean you are so lucky at tax time. Gambling winnings are reported as ordinary income on your tax return. Since you were compelled to share your information, you can expect to receive a form W-2C from the casino at tax time which will report the winnings. They also will file this form with the IRS, so you MUST report this on your tax return. The good news is that you may be able to partially offset your winnings based on your reportable losses. When we have clients who report to be gamblers the first thing I tell them is to keep track of their losses. The best way to do that normally is to get one of those customer/loyalty cards from the casino. When you use this card, they will track you winnings/losses and they will make available to you at year-end a statement which you can use to determine the gambling losses you can claim on your Schedule A of your tax return. Remember - you can only deduct gambling losses up to the amount of winnings you claim and if you are not able to itemize deductions then the losses will be of no consequence, so you will need the experience of a tax expert. Keep those gambling loss receipts and save them for tax time.

For more specific guidance on reporting gambling winnings and losses contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at (302) 659-6560 or visit our website at www.saggioaccounting.com. All new client's receive a $35 discount.

Wednesday, January 25, 2012

IRS Audit Red Flags: The Dirty Dozen - Kiplinger

Here is a great article, a must read. For specific guidance contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or www.saggioaccounting.com

IRS Audit Red Flags: The Dirty Dozen - Kiplinger

How does E-Filing Work?

Question: Ralph, I was wondering if E-filing is safe. I am always concerned about identity theft and I want to make sure my information is secure.

Answer: We are now mandated to file all tax returns electronically, quite frankly we have been doing this routinely since we the Internal Revenue Service initiated E-filing. In my view, it really is the most efficient and safest means of filing your tax returns. When we create your tax returns, rather than providing a copy for your to mail, we develop an electronic file which we submit through our tax preparation software provider. That file includes all the traditional tax return information in an electronic format. Several times per day, the host providers dumps that data to the IRS and the IRS will process the return and provide a receipt signifying their receipt of the tax return. I view this as being the best means of filing because it not only provides proof that the tax returns was filed timely, but it also undergoes many basic checks for accuracy. The return is reviewed for completeness, names, social security numbers, dates of birth, and other information is reviewed. These checks substantially reduce the risk of errors in data entry as compared to paper filing. The process is also more secure in my view since you are not using the mail system.

The IRS has recently mandated that any accountant preparing tax returns generally must e-file their client's returns unless they can demonstrate a reason for not e-filing. We are now also required to file a special form with any "paper" returns we file stating the reason for not e-filing. All in all, it's really a great system and our clients are really pleased with the response time. In most cases, refunds are directly deposited to client's accounts with 7-10 days of filing.

When you are ready to e-file your tax returns, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS either by telephone at 302-659-6560 or visit our website at www.saggioaccounting.com. We are offering a $35 discount for all new clients, so don't delay.

Monday, January 23, 2012

When just being a babysitter is not that simple

Question: I have a question for you Ralph. I took a job as a babysitter for a family on the other side of town. They just told me that they intend to take a deduction for the money they paid me. How does this impact me?

Answer: I get this question at least a few times per day. You have a complicated situation. When you decided to go to work for this family, you probably assumed that this would be some extra money to put in your pocket. The families decision to take a deduction for the money they paid you has complicated the situation. So here's what we have. First of all, you were an employee of the family and they should have set you up as a "household" employee. They should have paid you with normal payroll checks and taken the appropriate taxes from your wages. I would suspect they probably considered you an "independent contractor," but I can assure you that this is not the case. Since you are working at their home, with their children, using their toys, etc., you are not a contractor. I would guess you don't have a business license, business insurance, etc., as well. You are an employee and now you find yourself in the situation where all of the money that was paid to you is income reportable on your personal tax return. You will now be responsible for not only the federal and state income tax, but also the self-employment tax burden on this income. In other words, you had better plan on taking 45% of the money you earned and put it aside for taxes.

If you are still in this "work" relationship,  I would suggest you have a clear discussion with the family and explain to them that you are an employee and you expect to be treated as such. It is their responsibility to handle your payroll taxes and provide you with the appropriate documentation. If they are interested in having someone assist them with the payroll function, we can certainly help.

For more information about this issue and other tax related issues, contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS at 302-659-6560 or visit our website at www.saggioaccounting.com. We will help you navigate the payroll process and provide you with advice in these somewhat complex issues.

Sunday, January 22, 2012

It's not a gift it's your money!

Question: Hey Ralph. Here is a question for you. How can those big tax preparation chains claims that they can get me a greater refund then what someone else can get? I just don't understand the whole refund thing.

Answer: I saw that commercial this morning from the "green" tax preparation franchise. I am sure everyone knows the Block I am referring to. I thought it was interesting that their ads now feature people openings envelopes which look like gifts with refund amounts written inside. This drives me crazy! A refund is not a gift from the government, it is YOUR money. I will never understand how someone gets so excited about a refund, when it's nothing more than the federal government giving you back your own money which was paid through your payroll checks each payroll period. Effective tax planning works to reduce your overall tax burden which is not necessarily a game of getting you the largest refund at tax time. When we effectively manage your tax situation, we set your payroll withholding to reach your tax liability and not a penny more. Why should the government take an interest-free loan from you. What sets our firm apart is our goal in not only preparing your tax returns, but also going the extra mile to provide a tax plan for the current year which will result in the lowest possible tax burden and may even give you more take-home pay throughout the year. At Saggio Accounting+PLUS, the PLUS is providing a framework for our clients to maximize their current year refund, but also to reduce their tax burden moving forward. It's no gift - it's your money and we will provide effective plans to help you keep more of it. It's tax breaks - without an act of Congress.

If we can assist you with your tax planning and preparation today, call us at 302-659-6560 or visit our web site at www.saggioaccounting.com. When you have a tax question, e-mail ralph@askralph.com.

Friday, January 20, 2012

Friday Update - January 20, 2012

The Saggio Accounting+PLUS Friday Update

It's tax filing season and we are already filing for refunds for our clients. Call today 302-659-6560 or visit our web site at www.saggioaccounting.com and click on Book Now.

Have a wonderful Friday and a great weekend. My best, Ralph V. Estep, Jr.

Thursday, January 19, 2012

Choosing a Tax Preparer

Question: I am wondering about hiring someone to do my taxes, but I want to make sure I am making a good decision. How should I look for?

Answer: We get this question all the time. Here is a great article right from the Internal Revenue Service.

Ten Tips to Help You Choose a Tax Preparer

IRS TAX TIP 2012-06, January 10, 2012

Many people look for help from professionals when it’s time to file their tax return. If you use a paid tax preparer to file your return this year, the IRS urges you to choose that preparer wisely. Even if a return is prepared by someone else, the taxpayer is legally responsible for what’s on it. So, it’s very important to choose your tax preparer carefully. This year, the IRS wants to remind taxpayers to use a preparer who will sign the returns they prepare and enter their required Preparer Tax Identification Number (PTIN).

Here are ten tips to keep in mind when choosing a tax return preparer:

Check the preparer’s qualifications. New regulations require all paid tax return preparers to have a Preparer Tax Identification Number. In addition to making sure they have a PTIN, ask if the preparer is affiliated with a professional organization and attends continuing education
classes. The IRS is also phasing in a new test requirement to make sure those who are not an enrolled agent, CPA, or attorney have met minimal competency requirements. Those subject to the test will become a Registered Tax Return Preparer once they pass it.

Check on the preparer’s history. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for
attorneys; and the IRS Office of Enrollment for enrolled agents.

Ask about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Also, always make sure any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer’s bank account.

Ask if they offer electronic filing. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. More than 1 billion individual tax returns have been safely and securely processed since the debut of electronic filing in 1990. Make sure your preparer offers IRS e-file.

Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.

Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.

Do not use a preparer who is willing to electronically file your return before you receive your Form W-2 using your last pay stub. This is against IRS e-file rules.

Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.

Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.

Make sure the preparer signs the form and includes their PTIN. A paid preparer must sign the return and include their PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.

Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 from www.irs.gov or order by mail at 800-TAX-FORM

Ralph V. Estep, Jr., the accountant at Saggio Accounting+PLUS is a Delaware Licensed Public Accountant. As members of the National Association of Public Accountants, Saggio Accounting+PLUS is subject to professional education requirements. We electronically file all of the returns we prepare which are eligible for e-filing. Call today to schedule an appointment at 302-659-6560 or visit our web site at www.saggioaccounting.com.

Are Unemployment Benefits Taxable

Question: Hello Ralph, I was wondering if Unemployment Benefits are taxable?

Answer: What a great question and very relevant in these times of high unemployment. Yes they are taxable as ordinary income. In 2009, the IRS allowed you to exclude $2400 from tax, but that was only for that tax year. You must include all unemployment benefits on your tax return. Many states, such as Delaware, allow you to voluntarily elect to have federal income taxes withheld from your benefits.

For more answers to your tax questions and for ideas to improve the bottom line, contact Saggio Accounting+PLUS and Ralph V. Estep, Jr. Call today and book for your tax season appointment. Join us at www.askralph.com or call 302-659-6560.

Wednesday, January 18, 2012

Romney Tax Questions

Question: Ralph, I am confused about all the talk in the press about Presidential Candidate Mitt Romney and his admission that he only pays an effective 15% tax rate. I seem to be paying more like 30% federal tax. What does he know that I don't know?

Answer: While I am not going to delve into the political aspects of this question, the tax question is very compelling. In this case, it appears the Mitt Romney has moved his income producing items away from normal compensation (i.e. W-2 income like most of us receive) and into what we call "passive" investments. These investments produce income in the form of interest, dividends, and capital gains which are taxed at a much lower rate. When someone has significant wealth and they are not in need of traditional "compensation" they can shift their income producing assets (investments) into these tax friendly areas. This is perfectly legal and is a great way to shield income from tax. It is not feasable during your working years for most of us because we have to work for compensation to earn wealth, but it's a great strategy once you have attained the wealth. We will see how this plays out in the political arena, but anyone with substantial personal wealth is no doubt taking advantage of this strategy.

To reduce your tax costs, contact Saggio Accounting+PLUS and see how Ralph V. Estep, Jr., in Smyrna, Delaware can assist you in reducing your tax obligation and maximizing your refunds.

Tuesday, January 17, 2012

The official start of Tax Season!

Today is the official start of the tax filing season. Starting today we are able to electronically file your tax returns. We are ready to bring you the refunds you deserve. We have many convenient appointment times still available to meet your needs. You may go to our web site at www.saggioaccounting.com or call our office at 302-659-6560 and schedule your appointment.

We are also starting our "Ask Ralph" link today. If you have a tax or accounting question just send an email to ralph@askralph.com and I will provide an answer. I will even publish the answers to non-client specific questions. Here's the first question for today.

Question: I was wondering how long it takes to get my federal refund once my return is filed?

Answer: That is a great question. Once we complete your tax return and we submit it electronically, it generally takes 10-14 days to receive your refund. When you choose direct deposit, it's even quicker. File your return today and have your refund fast.

Here's another question:

Question: I would like to know the average costs associated with tax preparation.

Answer: This is a great question. According to a study I just read from the National Society of Public Accountants, the average price for tax preparation (Federal 1040. Schedule A and 1 State) in the Delaware region is $268. I have some great news regarding this average fee, Saggio Accounting+PLUS fees for the same return starts at only $200, and with our $25 discount for new clients, our fees are almost $100 less than the average. Of course, all returns are different and we cannot quote the exact expected fee, but I will assure you that our tax preparation fees are very reasonable and the results of meeting with a licensed professional accountant for a whole hour, will certainly exceed your expectations. Call today or visit our web site at www.saggioaccounting.com

Updated Welcome Message

Take a look at our new welcome Video.

Friday, January 13, 2012

Ask Ralph!

Tax filing season officially starts on the 17th. We are ready to start filing. Please feel free to e-mail ralph@askralph.com with any tax questions or other accounting questions and watch this blog for the answers. Call today and schedule your appointment with Saggio Accounting+PLUS.

Thursday, January 12, 2012

Fwd: http://www.saggioaccounting.com/19637/Congress-Extends-Tax-Breaks/

This is a great year end recap. We have more great information on our web site. It is almost filing season. It starts on the 17th. Call today or go to our website and book now. $25 discount for all new clients, let's start a lifelong relationship.

Ralph V. Estep, Jr.
Sent from my iPhone

Begin forwarded message:

From: Ralph Estep Jr <ralph@saggioaccounting.com>
Date: January 12, 2012 8:48:51 PM EST
To: Ralph Estep Jr <ralph@saggioaccounting.com>
Subject: http://www.saggioaccounting.com/19637/Congress-Extends-Tax-Breaks/

Wednesday, January 11, 2012

Tax Cut Extension

Payroll Tax Cut Temporarily Extended into 2012
The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the
two percentage point payroll tax cut for employees, continuing the reduction of
their Social Security tax withholding rate from 6.2 percent to 4.2 percent of
wages paid through Feb. 29, 2012. This reduced Social Security withholding will
have no effect on employees’ future Social Security benefits. Employers should
implement the new payroll tax rate as soon as possible in 2012 but not later
than Jan. 31, 2012. For any Social Security tax over-withheld during January,
employers should make an offsetting adjustment in workers’ pay as soon as
possible but not later than March 31, 2012.