Latest News on Denver Accounting & Taxes

Denver Accounting Firm Breaks Down Your W-2


January 17, 2018

Your Denver accounting firm can help with getting a head start on filing for our taxes. After every year, employers must gather the wages paid to their employees and report them for the purpose of tax benefits and requirements. Prior to January 31, these figures must be recorded on a form known as a W-2 and mailed or issued to each respective employee. These are then in turn, used by individuals and those filing as a household in an effort to summarize their tax implications from the prior year.

Employees often receive these forms and pay little to no attention to their contents. These forms are sometimes even left unopened and instead just forwarded to a taxpayers accountant to deal with the results. Instead, employees should take time to ensure their forms are completed accurately as the withholdings included go a long way in determining the impact on a taxpayers responsibilities.

According to the Internal Revenue Service (IRS) a W-2 Form must be issued by, “every employer engaged in a trade or business who pays remuneration, including non cash payments of $600 or more for the year (all amounts if any income, social security, or Medicare tax was withheld) for services performed by an employee must file a Form W-2 for each employee (even if there is a familial relationship between the employee and employer) from whom:
  • Income, social security, or Medicare tax was withheld.
  • Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate.”
These papers, of which you should receive three copies include a wealth of information for different purposes. Boxes corresponding to letters A-F include identifying information such as an employee’s social security number, name, and address in addition to identifying numbers, name, and address of the issuing business where identified employee works.

Following are numbered boxes 1-20 which may or may not contain numerical figures and other identifying characteristics for tax purposes.

Box 1: Total taxable wages or reported salary
Box 2: Total amount withheld by the employer for federal income taxes
Box 3:  Amount of wages subject to social security tax
Box 4: Amount of social security tax withheld
Box 5: Amount of wages subject to medicare tax
Box 6: Amount of medicare tax withheld
Box 7: Any tip income reported to your employer
Box 8: Any tip income submitted by your employer
Box 9: Should be empty. Originally used for advanced Earned Income Credit reporting
Box 10: Reimbursed amount for dependent care (Taxable over $5,000)
Box 11: Amounts distributed by non-qualified deferred compensation
Box 12: Coded deferred compensation and benefits explained
Box 13: If subject to being a statutory employee, retirement plan, third-party sick pay the corresponding box will be checked
Box 14: Additional reported tax information
Box 15: Employers state and identifying number
Box 16: Taxable wages earned in the corresponding state
Box 17: Corresponding state income tax withheld
Box 18: Wages subject to other local taxes (i.e. city)
Box 19: Taxes withheld by localities above
Box 20: Description of entity being paid from local taxation

The experts at Bloch, Rothman, and Associates will be happy to help analyze your W-2, individual tax implications and filing status, assist you in determining which deduction would be right in your situation and answer any questions regarding individual or business income taxes. We can also assist with a variety of bookkeeping and other payroll options. It is recommended for those who are selected for an audit, that they enlist the services of a professional tax service before they begin engaging with the IRS auditor, especially before they submit any information.

Continuing further, associates at Bloch, Rothman can analyze and compile data for your unique tax situation, along with finding resolutions for your issues and estate complications. All services provided can and will be completed in a timely manner, and will account for any restrictions or tax deadlines. Whether you need a simple explanation on a random tax form, are in need of representation, or would like help in a variety of other services our tax experts are ready and willing to assist. Call 303-321-7160 or contact us for your initial free no obligation consultation.
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Denver Tax Specialist Filing Changes a Plenty for 2018


January 3, 2018

An election year and new President ushered in tax reform as one of his changes from the previous administration. After approximately a year in office, many of the changes go into effect immediately and will impact your tax returns for the upcoming year. While many are excited about the increased take home money from their paychecks with regards to the new taxes, some will be surprised to find out the lingering effects of a recently approved tax reform bill.

While some are familiar with the changes, many will be surprising according to their most recent returns. Some will be ready for the changes and others will be impacted when they decide to file their returns. For the best results, relying on the professionalism of an expert to navigate the ever changing tax landscape is one of the best pieces of advice available.

For example, significant changes have been made for mortgage interest, charitable contributions, and medical expenses. These 2018 tax changes include the following for an upcoming filing season and need to be noted for appropriate returns in the coming year.

Mortgage Interest

New deductions only apply to mortgages applied after December 15, 2017 as any other pre-existing mortgage will be grandfathered into the tax deduction principle. For new mortgages, the interest on home equity debt is no longer subject to deduction and the deduction can only be taken on those including $750,000 which is down from the prior years from $1 million.

Charitable Contributions

These donations have been raised from a cap of 50-percent of an individual or household income to 60-percent. This increase means individuals who donate more can deduct a larger portion, however there is also a significant change from prior years. Those taxpayers making charitable contributions to universities or colleges in exchange for athletic tickets are no longer allowed the monetary deduction.

Medical Expenses

Typically a beneficial deduction for those involved with making medical expense payments, the rate has decreased for the upcoming tax year. For 2017, the deduction has been reduced from 10-percent to seven and one-half percent of the adjusted gross income for the taxpayer. The reduction allows for individual’s to deduct a larger amount of their unreimbursed medical expenses.

The experts at Bloch, Rothman, and Associates will be happy to help analyze your individual tax implications and filing status, assist you in determining which deduction would be right in your situation and answer any questions regarding individual or business income taxes. We can also assist with a variety of bookkeeping and other payroll options. It is recommended for those who are selected for an audit, that they enlist the services of a professional tax service before they begin engaging with the IRS auditor, especially before they submit any information.

In addition, a fully detailed review of your tax situation can be completed alongside resolution to your issues and estate compilations. We understand that time is of the upmost importance to our clients, and all services provided will be completed, depending on your restriction and possible tax deadlines, with the utmost attention to time spent. Whether you need a simple explanation on a random tax form, are in need of representation, or would like help in a variety of other services our tax experts are ready and willing to assist. Call 303-321-7160 or contact us for your initial free no obligation consultation.
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Denver Tax Specialist Explains Federal Withholdings


December 20, 2017

A majority of individuals wake up, get ready, and go to work on a consistent basis. Wherever your place of employment, a number of hours are spent doing your job, returning home at the end of the day only to sleep and repeat the previous days activities all in an effort to earn money for the bills, necessities and potentially a little fun when all is said and done.

Every week or two, perhaps twice a month or at the conclusion a small piece of paper is provided to you with numbers on it - your evidence of a job well done. This check has money provided to you from the employer and if given a close examination, some disappears before it ever reaches you.

One part of this is the “Federal Withholding” which is composed of a few different things in order to provide various services both nationally and closer to home. Potentially comprised of social security, Medicare, income tax, unemployment, and workers compensation, these factors take regularly from your check and here is where that money goes.

Social Security

A federal program providing benefits to retired persons, the unemployed, and the disabled is contributed to by approximately 169 million Americans. Both the employer and employee are subject to Social Security based annually on a fixed percentile. The tax is also limited to a wage base at which point it will be removed for the remainder of the year.

Medicare

Similar to Social Security Medicare is a federal insurance program available to persons 65 or older with a few exceptions based on special circumstances. Unlike Social Security, the Medicare tax rate applies to every penny earned but is also contributed into by the employer and employee.

Income Tax

Determined by your W-4 form when hired, income taxes are the monies you select to be withheld from your paycheck based on an individual’s personal tax situation. These are the federal taxes which must be paid annually and are taken out each pay period, in addition to an annual filing.

Unemployment

This is a payroll tax typically footed by the employer on an employee's earnings up to the first $7,000 except in Alaska, New Jersey, and Pennsylvania.

Workers Compensation

Another program covering employees who are injured while performing job specific functions and is paid for by the employer.

The experts at Bloch, Rothman, and Associates will be happy to help analyze your pay stub more in-depth, assist you in determining which deduction would be right in your situation and answer any questions regarding individual or business income taxes. We can also assist with a variety of bookkeeping and other payroll options. It is recommended for those who are selected for an audit, that they enlist the services of a professional tax service before they begin engaging with the IRS auditor, especially before they submit any information.

A full detailed review of your tax situation can be completed in addition to resolution issues and estate compilations. All services will be completed in a timely manner, depending on your restrictions and possible tax deadlines. Whether you need a simple explanation on a random tax form, are in need of representation, or would like help in a variety of other services our tax experts are ready and willing to assist. Call 303-321-7160 or contact us for your initial free no obligation consultation.
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Actual Expense vs. Standard Mileage in Denver Tax Preparation


December 6, 2017

One of the most common deductions associated within a tax return is the company and personal use vehicle. Many small business owners and thanks to new ridesharing apps and services like Uber and Lyft, vehicles are commonly being used for both individual personal functions with business related circumstances.

Individuals who fall into this category often wonder what the tax implications are associated with their driving. Since they use the automobile for both work and play, how does it need to be addressed on the income tax return at the end of the year and what should they be keeping track of in order to prepare.

There are two standard forms of answering each of these questions and any others associated with personal and business use vehicles. First, a taxpayer will be better off tracking both throughout the course of a calendar year and then determining which method will provide the better deduction at year’s end, instead of opting for one over the other.

Since the two are somewhat related, some occurrences can be utilized in both cases, but one does provide an easier method of calculation than the other. These two methods used to determine the tax implications of a personal and business used automobile are the actual expense method and standard mileage deduction.

Actual Expense

This method involves keeping many receipts throughout the tax year associated with almost any and everything related to the automobile in question. Gas, insurance, oil changes, and tire replacement or repair payments must all be kept. While these are the main subjects in relation to actual expenses, other factors like car washes and any repair work can also be counted. If the vehicle is being leased, these payments may also be considered as well as depreciation for automobile owners.

These amounts are then added and divided by the amount of time a car was in business use. For example, if the yearly operating expenses equal $12,000 and the vehicle was used half of the time for personal means and half for business, the total amount included for business expense purposes would be $6,000.

While this method requires an inordinate amount of paperwork, it can be more beneficial depending on your vehicle use and driving style.

Mileage

The other method and arguably easier, or at least less time consuming, is to keep actual mileage tabs used for business purposes. Instead of having to keep up with tons of fuel receipts and maintenance bills, owners/operators use only the number of miles they have driven and multiply by the standard mileage rates for business administered by the Internal Revenue Service (IRS).

Compared with the actual expense model above, this user would record their mileage at the beginning and end of the calendar year and then apply the percentage of business or work related miles to the total. Actual miles should be kept for an even more reliable and potentially beneficial record.

If the vehicle moves 12,000 miles in a calendar year and half are associated with business, the calculation would be: 12,000 / 2 = 6,000 x IRS rate (0.54) = $3,240 for the standard mileage deduction.

Thus, the above method with actual operating expenses would provide a bigger deduction for tax purposes if both scenarios are associated with the same automobile. Keeping tabs on both throughout the year will allow you to have the best results when filling out your taxes and preparing the return.

The experts at Bloch, Rothman, and Associates will be happy to help you determine which deduction would be right in your situation and answer any questions regarding individual or business income taxes while assisting with a variety of bookkeeping options. In cases where the taxpayers are selected for an audit, it is recommended that they enlist the services of a professional tax service before any information is handed over to the IRS auditor.

A full detailed review of your tax situation can be completed in addition to resolution issues and estate compilations. All services will be completed in a timely manner, depending on your restrictions and possible tax deadlines. Whether you need a simple explanation on a random tax form, are in need of representation, or would like help in a variety of other services our tax experts are ready and willing to assist. Call 303-321-7160 or contact us for your initial free no obligation consultation.
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Denver Business Tax Preparation Specialist: Tips to Help Your Small Business Cut Costs


November 29, 2017

When it comes to your small business, every penny counts. This is why it is important for you to make sure everything you are doing is profitable—which includes the day to day tasks of your business. For many small businesses, it takes years to achieve financial goals and the best way to get there is to be diligent about your expenditures both large and small. Learn about the importance of going electronic with files and paperwork, top changes you can make to your property, and go-to ways to work with your local vendors from your Denver business tax preparation specialist.

Go Electronic

One way to cut costs, in some cases by 50 percent, is through switching physical paperwork to an electronic system. To take it a step further, protecting your important documents in a cloud system that is not hosted on one machine that could be destroyed is an excellent way to protect your documents. It also makes it easier for you to access when off-site, and can be shareable with your tax preparer when tax season rolls around. You can use electronic systems for a wide variety of tasks, from taking payments to using e-signatures for forms and documents.

Property Changes

Whether your small business is out of your home, or in its own building, it is important to make sure you are doing everything you can to cut costs. First place to start is with your a/c and heat costs, install a programmable thermostat. You primarily need a comfortable temperature during your business hours. Do not waste dollars on running heating and cooling while you are not in the office, as well as any lights or appliances. You want to make sure everything is off or powered down at the end of the workday. Also, it is important to make sure the quality of your building is sound. Check for air coming through the window, leaks in your roof and more to ensure you do not have any openings that keep air flowing in.  

Work with Vendors

Do you know if you are getting the best pricing when it comes to the services you are using? It is important to periodically check the prices you pay compared to similar services in your area. You can often find premier vendors that cost less than other businesses. Do your research then also have conversations with your vendors to see where costs can be cut. In many cases, some small businesses use bartering when it comes to paying the bills.

One of the ways to help cut costs is to utilize the help of an accountant in Denver. From finding ways to be more efficient in your day to day to assistance with taxes, Bloch, Rothman and Associates has you covered. While you work to make your small business more efficient, be sure to check out the four bookkeeping tips for small business owners from premier Denver accountants. To get started, contact Bloch, Rothman and Associates today.
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