Latest News on Denver Accounting & Taxes

Ever heard of the Alternative Minimum Tax (AMT)? If not, that's most likely because you have never had to pay the tax.

The original intent of this tax was to keep those who earn high incomes from using loopholes in the tax laws in order to avoid paying their fair share of taxes through the use of manuy write-offs and deductions. 

Basically, the tax requires tax payers to calculate their income under the regular tax system and under the AMT rules and then pay whichever tax owed that is higher. 

Over the years, the tax has started to hit the upper middle class since the AMT rules have not adjusted with inflation like the rest of the tax code. Recently, Congress has passed temporary legislation to increase the income threshold for the AMT. 

So, with all of that being said...who pays it? You may be subject to the AMT if your income falls between $150K and $750K per year. But- there are criteria that increase your chances of being subject to the tax:

• High gross income relative to taxable income
• Large number of dependents
• You exercise and/or hold incentive stock options
• You realize significant long-term capital gains
• You have large deductions on schedule A

If you're not sure if the AMT applies to you, work with an experienced Denver tax preparer and Denver accountant - Bloch, Rothman & Associates. We will help you navigatve through the often times confusing aspects of this tax and can assist in helping you strategize ways to minimize your exposure with the AMT. Depending on your income, there is an AMT exemption and even an AMT credit. Just another reason why working with an experienced Denver accountant can benefit you in this particular matter. 

Additionally, the IRS has a tool to help you find out before tax time if you can expect to pay the AMT. You can check it out here.

We recently read an article in Accounting Today that stated 74% (nearly three-quarters) of Americans are worried about having enough money for retirement. On top of that worry, the article goes on to state that a recent survey found 3/10 Americans are not saving for retirement. Of those surveyed, however, 69 percent said planning for retirement was a top priority.

The article delves deeper into statisical information of those surveyed by generation and what they are saving for. 46 percent of unretired U.S. adults say they live paycheck to paycheck and can't afford to put money in savings.

Among those who are saving, the top goals are rainy-day funds for unexpected costs (65 percent) and retirement (52 percent), according to Accounting Today.

You can read the full article from Accounting Today here.

If you are an avid saver for your retirement, whether it be through a Roth 401k, an IRA, or a Roth IRA, at Bloch, Rothman & Associates, we can assist in helping find you the best tax deductions and credits when preparing your return.

Call us today: 303.321.7160

Continuing with our series on how to get ahead for your 2015 taxes, we've got great tips for July as the third quarter approaches.

For the month of July: July is a great time to consider a mid-year review of all of your investments and savings. Also spend some time rebalancing and taking a look at your investment portfolio if you need to. This will help you to see where you stand in regard to capital gains by year end. If you need some more information on capital gains and if they apply to you, please read our last post - What Are Capital Gains?

July is also a great time to go ahead and make an appointment with us, professional Denver accountants, Bloch, Rothman & Associates, LTD. As Denver tax experts, we often provide reports to our clients at mid-year for review. This helps to aid in conversations with our clients about where they stand for next year's tax bill. 

Call us today and get ahead for 2015: (303) 321-7160.

Often times our Denver tax and Denver accounting clients assume capital gains are a tax that only apply to those that are wealthy. 

But truthfully, anytime you invest in anything beyond your 401K plan or IRA, you have the potentional to realize capital gains. 

Capital gains simply refer to the earnings on an investment that an investor receives when he or she sells it at a greater value than what was paid for it. Meaning, you don't need to be wealthy to realize a capital gain. You could sell a home for $200,000 but you had purchased the home for $175,000. You have realized capital gains of $25,000.

There are short-term and long-term capital gains, and they are both taxable. The rate at which you are taxed all depends on when you sell your item - whether it be a home, stock, or bond, for example.

If you buy something and then sell it within a year, that is considered a short-term capital gain. This is taxed at your normal income tax rate. If you wait longer than a year to sell that stock, bond, or home, it is considered a long-term capital gain, and the rate at which you will be taxed is determined on where you fall in the tax bracket. You must consider both state and federal taxes on capital gains. Often times at the state level, capital gains are taxed as normal income. 

Keep in mind that investment growth within your 401K plan or IRA grows tax-deferred until you start withdrawing money. And if you own a home, each tax payer receives an exemption on the first $250,000 gains on a primary residence. 

For additional information on capital gains, you can check out the IRS' "Ten Important Facts About Capital Gains and Losses". And please call us, experienced Denver accountants, at Bloch, Rothman & Associates, LTD if you have any questions on how capital gains pertain to your tax bill.

Have a wonderful Father's Day weekend from all of our Denver accounting staff at Bloch, Rothman & Associates, LTD.

We look forward to serving you for all of your Denver tax, Denver accounting, and Denver bookkeeping needs.