Accounting & Tax News

 

Publication 17
Tax-filing information and tips on what income to report and how to report it, figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions and using IRAs to save for retirement


Residential Renewal Energy – Federal Tax Credit

If you are considering making a solar, wind or other similar renewable energy improvement to your home, don’t forget to figure in the 30% Federal tax credit into your calculation of the overall net cost of the project.  The tax code still allows for this significant tax credit for the installation of solar electric, solar water heating, small wind, geothermal heat pumps and fuel cell improvements to your primary residence, at least through 12/31/16.  This Federal tax credit applies to the overall installed cost of the equipment, including the cost for new wiring, piping, etc., in the year the improvement is made.  Also, if you aren’t eligible for the full credit in the tax year that the improvement is made the credit balance can be carried ahead and applied to a subsequent year’s tax return filing.  There are some additional requirements that must be met in order to qualify for the credit, so please refer to this Department of Energy newsletter for these additional specifications.  Please contact us, if we can assist you in determining whether making a renewable energy upgrade to your home would make sense for you!

 Posted June 26, 2015/wittenbergcpa.com

Wittenberg CPA’s 20th Anniversary!

This year marks our 20th year in business serving our clients in Mason and Thurston Counties. We have much to be thankful for and much to look forward to as we move ahead, so stay tuned for news of future plans.  In the meantime we wanted to summarize our services, so you will keep us in mind as your and your company’s needs change.  As a CPA firm we offer everything from one time consulting engagements to full charge accounting services, where we maintain your company’s accounting, prepare payroll, as well as all of the required excise and payroll tax reports. But why hire a CPA firm like ours? It’s because our firm can give you as the owner confidence that the accounting and compliance aspects of your company are in good order, allowing you as the owner to focus on the business operations of the company, instead of worrying about whether the company is in compliance with the myriad of reporting responsibilities, which can bog a company down, or worse, if not done properly. Additionally, when we review a company’s accounting, we make sure that the company’s accounting system is adjusted properly, so it reflects the company’s current financial position and operations. With access to the company’s fully adjusted and current financial information, the owner can adequately evaluate the company’s performance, and it can also be accessed by a potential third party user, such as a bank, for loan qualification. Please refer to our client’s testimonials to review what some of our business clients are saying about us, and please contact us to discuss how we can help you and your business succeed. Thank you clients and friends for 20 wonderful years! Mike and Staff

Posted June 10, 2015/wittenbergcpa.com

Roth versus Traditional IRA’s

While both types of IRA’s (Individual Retirement Accounts) can be beneficial, each type has very unique qualities.  First off, the Roth IRA is contributed on an “after tax” (non-deductible) basis, whereas the Traditional IRA is contributed on a “pre-tax” (deductible) basis.  So while the contributor to a Traditional IRA is allowed a deduction for contributions made, upon withdrawal the account holder must pay regular income taxes on distributions, whereas the contributor in the Roth IRA account does not pay income taxes on future distributions, as long as the account holder has held the account for at least 5 years and has reached retirement age (59 ½ years old).  Furthermore, while both types of IRA’s are intended to be held until retirement age, the holder of a Traditional IRA must begin withdrawing funds, under the RMD (required minimum distribution) rules, at age 70 ½, whereas the holder of the Roth IRA isn’t required to distribute their funds, and in fact upon the holder’s death the Roth IRA funds can readily transfer to beneficiaries without any specific distribution requirements.  As a general rule, Roth IRA’s are the preferred type of IRA accounts, especially the longer the time in which the account is allowed to grow.  However if the taxpayer desires to have a tax deduction upon contribution, then the Traditional IRA, even though taxable upon distribution, may be preferable.  Please contact us if you’d like to discuss IRA’s, as well as which type of account would be best for your particular circumstances.

Posted May 21, 2015/wittenbergcpa.com

Five Things to Know if You Need More Time to File Your Taxes

The April 15 tax deadline is coming up. If you need more time to file your taxes, you can get an automatic six month extension from the IRS. Here are five things to know about filing an extension: Use IRS Free File to file an extension. You can use IRS Free File to e-file your extension request for free. Free File is only available through IRS.gov. You must e-file the request by midnight on April 15. Don’t forget to come back to Free File to e-file your taxes for free. You can access the program at any time through Oct. 15.

  1. Use Form 4868. You can also request an extension by filling out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. You must mail this form to the IRS by April 15. Form 4868 is available on IRS.gov/forms at any time.
  2. More time to file is not more time to pay. An extension to file will give you until Oct. 15 to file your taxes. It does not give you more time to pay your taxes. You still must estimate and pay what you owe by April 15 to avoid a late filing penalty. You will be charged interest on any tax that you do not pay on time. You may also owe a penalty if you pay your tax late.
  3.   Use IRS Direct Pay.  The safe, fast and easy way to pay your tax is with IRS Direct Pay. Visit IRS.gov/directpay to use this free and secure way to pay from your checking or savings account. You also have other electronic payment options. The IRS will automatically process your extension when you pay electronically. You can pay online or by phone.
  4. IRS helps if you can’t pay all you owe.  If you can’t pay all the tax you owe, the IRS offers you payment options. In most cases, you can apply for an installment agreement with the Online Payment Agreement tool on IRS.gov. You may also file Form 9465, Installment Agreement Request. If you can’t make payments because of a financial hardship, the IRS will work with you.