Understanding Your Tax Filing Status: Why It Matters and How to Choose the Right One

Understanding Your Tax Filing Status: Why It Matters

Your tax filing status is more than just a box to check—it can significantly affect your tax liability and refund. The right filing status can lower your tax bill, increase your refund, or help you qualify for valuable tax credits. Let’s break down why it matters and how to choose the correct one for your situation.

Your filing status tells the IRS how to treat you when filing your taxes. There are five possible filing statuses to choose from:

• Single

• Married Filing Jointly

• Married Filing Separately

• Head of Household

• Surviving Spouse with Dependent Child

Single: This is the simplest filing status, typically for individuals who are unmarried or considered unmarried on the last day of the tax year. If you’re not married and don’t have any dependents, this is likely the option for you.

Married Filing Jointly: Married couples often choose this status because it typically results in a lower tax rate, a higher standard deduction, and eligibility for more tax credits. Filing jointly can also simplify the process, as you file one return for both spouses.

Married Filing Separately: This option might be necessary if you want to keep your tax liabilities separate or if one spouse has significant medical expenses or other deductions that are easier to claim individually. However, keep in mind that you could lose some tax benefits by choosing this option.

Head of Household: If you are unmarried and support a dependent, such as a child or elderly parent, you may qualify for this filing status. It comes with a higher standard deduction and better tax rates than Single status.

Surviving Spouse with Dependent Child: If your spouse passed away during the tax year and you have a dependent child, you can continue to use the Married Filing Jointly tax rate for up to two years following your spouse’s death.

How to Choose the Right Filing Status

When selecting your filing status, consider your marital status, dependents, and any household expenses. If you are divorced, you might qualify for Head of Household status if you meet specific criteria. Also, keep in mind that your filing status can affect your eligibility for credits like the Child Tax Credit, Earned Income Tax Credit, and the Child and Dependent Care Credit.

Life changes such as marriage, divorce, or having a child can also impact your filing status from year to year, so it's important to review it annually. Choosing the right status ensures you're taking full advantage of tax benefits and potentially lowering your tax bill.

In conclusion, understanding your tax filing status is a key step in filing your taxes correctly. Making the right choice can result in a lower tax bill or a larger refund, while an incorrect filing status could lead to delays, penalties, or missed credits. If you’re unsure which status is best for you, our Tax Pros at Puma Accounting are here to help guide you through the process.

FILING TAX EXTENSIONS PUMA ACCOUNTING CAN DO IT FOR YOU FOR FREE

IT'S FREE AND EASY 

As the tax season approaches, many people may find themselves struggling to get their finances in order to file their tax returns on time. However, sometimes unforeseen circumstances may arise that can make it difficult to meet the April 58th deadline. Fortunately, there is a way to get more time to file your taxes with a Tax Extension. Puma Accounting can file your Tax Extension for FREE!

Keep in mind this extension is for time to file, not pay. If you owe money, you need to file your income tax by April 15th, 2024 or there will be a series of penalties that the IRS will enforce.

HERE IS A LITTLE BIT OF INFORMATION ABOUT TAX EXTENSIONS

WHAT IS A TAX EXTENSION?

A tax extension is a request made to the Internal Revenue Service (IRS) to extend the deadline for filing personal income tax returns. This extension allows taxpayers to gather necessary documents, organize their finances, and accurately complete their tax returns. You will get an additional 6 months to file your return. By filing an extension, taxpayers can avoid late filing penalties, which can be as much as 5% of the unpaid taxes owed per month, up to 25% of the total amount owed.

Who Should File a Tax Extension?

Anyone who anticipates not being able to file their personal income tax return by the April deadline should consider filing a tax extension. This can include individuals who have experienced a significant life event, such as a job change, marriage, or divorce, as well as those who have complicated financial situations that require additional time to prepare their tax returns accurately.

Additionally, those who are self-employed or own a small business may benefit from filing a tax extension, as it can allow them more time to gather the necessary documents and ensure that their tax returns are accurate.

HOW PUMA ACCOUNTING CAN HELP

At Puma Accounting, we understand that tax deadlines can be stressful, and that's why we offer a free tax extension filing service. Our experienced tax pros can file a tax extension on your behalf, allowing you more time to prepare and submit your personal income tax return accurately. 

FILE YOUR TAX EXTENSION TODAY AND AVOID THE IRS LATE FILING PENALTIES!

Call us today 315-336-8226 or book an appointment at https://www.pumaaccounting.com/make-appointment  have your Taxes done or file a Tax Extension

The Power of Retirement Contributions and Tax Savings

NOW IS THE TIME TO SECURE YOUR FINANCIAL FUTURE

Planning for retirement is a crucial aspect of financial stability, and it's never too early to start. By making informed decisions about retirement contributions and taking advantage of tax-saving opportunities, you can build a more secure future for yourself and your family. In this blog post, we'll explore the benefits of contributing to a 401(k) or IRA and how it can lead to significant tax savings, along with the importance of seeking professional guidance.

401(k) Contributions:

Imagine a married couple earning a combined income of $30,000 per year. By contributing $3,000 each to their 401(k) accounts annually, they not only secure their retirement but also enjoy substantial tax benefits. This contribution saves them $510 in Federal and NY Income Taxes. Furthermore, they qualify for the Saver's Credit, amounting to $413. In total, they save an impressive $923.

Traditional IRA Contributions:

Now consider another scenario where a married couple earns $40,000 per year. They wisely contribute $3,000 each to their traditional IRAs annually. As a result, they save $570 in Federal and NY Income Taxes. Additionally, they qualify for the Saver's Credit, amounting to a generous $1,000. Their total savings add up to a substantial $1,570.

The examples above highlight the potential tax savings and benefits of contributing to retirement accounts. However, choosing the right retirement plan and contribution strategy requires careful consideration of individual financial circumstances. That's where a qualified Tax Professional comes in. Consulting with an expert can help you make informed decisions that align with your goals and maximize your savings.

Planning for the Future:

Once you've made contributions to your retirement accounts, it's essential to plan for the future. A financial advisor can provide invaluable guidance on managing your investments and ensuring they align with your long-term goals. This proactive approach will help safeguard your financial future.

Exploring Retirement Options:

While 401(k)s and IRAs offer significant tax advantages, there are other retirement options to consider, such as annuities. It's important to note that not all retirement vehicles provide tax savings. Therefore, choosing the option that best suits your needs and goals is crucial.

With over 25% of Americans lacking adequate retirement savings, it's essential to take action now to secure your financial future. By contributing to retirement accounts like a 401(k) or IRA, you can not only save on income taxes but also build a nest egg for retirement. Is that you? Or Are you able to set a bit more aside to help your future? Our economy is struggling hard. We at Puma Accounting can help you save now and for the future. Pumaaccounting.com

Don't wait; start planning for a brighter future today

Understanding Business Meal, Entertainment and Travel Deductions in 2023

As we enter the new tax year, businesses and self-employed individuals need to stay informed about changes in tax regulations that can impact their bottom line. In 2023, there are important updates regarding meal, entertainment, and travel deductions that you should be aware of to maximize your tax benefits. Let's dive into the details.

Meal Deductions:

One of the key changes for 2023 is related to meal deductions. For most business meals, such as those with clients, meals while traveling for work, food items for the office, and meals at conferences, the deduction remains at 50%. This means you can deduct 50% of the cost of these meals from your taxable income. However, there is a bright spot—food for company holiday parties remains 100% deductible. So, go ahead and celebrate with your team knowing that it won't impact your tax benefits.

Entertainment Deductions:

In 2023, there will be a significant change regarding entertainment activities. Separately stated food expenses related to an entertainment activity are now deductible to the extent of 50%. This change highlights the importance of keeping detailed records and separating out meal expenses when they are part of an entertainment event. Proper accounting can help you accurately claim these deductions while staying compliant with tax regulations.

Travel Deductions:

For those who frequently travel for business, the news in 2023 is mixed. While travel expenses themselves remain 100%  deductible, the deduction for travel meals is limited to 50% of the cost. This means that when you're on the road for work, you can deduct half of your meal expenses as long as they are related to your business activities.

Additional Deductions:

In addition to the standard meal, entertainment, and travel deductions, there are other specific situations where deductions vary. For example, food and beverages given to the public, often associated with promotional events, remain 100% deductible. Similarly, providing dinner for employees working late at the office is fully deductible.

Understanding the deductions of meal, entertainment, and travel deductions for 2023 is crucial for businesses and self-employed individuals. While some deductions have remained consistent at 50%, others have changed.  Keep in mind that 100% deductions are still available for certain situations, such as company holiday parties and public giveaways. To ensure you're making the most of these deductions while staying within the bounds of tax regulations, consult with a tax professional who can provide expert guidance tailored to your specific circumstances.

Our Tax Pros at Puma Accounting will be able to help you navigate your deductions and make tax filing easier for you. Call us today 315-336-8226 or book an appointment at https://www.pumaaccounting.com/make-appointment 

Divorced in 2023? Your Taxes and What You Need to Know

In today's world, where half of marriages end in divorce, splitting up involves more than just feelings – it also gets complicated when it comes to money. When people go through a divorce, they need to think about how it affects their taxes, especially if the divorce isn't finished by the end of 2023. It's important to understand these tax things as you navigate through the difficulties of getting a divorce.

Filing Choices: Married Filing Jointly vs. Married Filing Separately

Each individual faced with an impending divorce has two crucial tax options – filing Married Filing Jointly or Married Filing Separately. While the latter may seem emotionally and tangibly appealing, in most cases, Married Filing Jointly emerges as the superior tax choice.

Drawbacks of Married Filing Separately:

1. Lowered Standard Deduction: This may lead to an increase in taxable income.

2. Taxation of Social Security Benefits: 85% of Social Security Benefits become automatically taxable, impacting retirees' income.

3. Earned Income Tax Credit (EITC): Filing separately disallows eligibility for the EITC, affecting those accustomed to significant refunds due to lower income.

4. Child and Dependent Care Credit: Expenses for childcare may no longer qualify for this credit.

5. Limited Child Tax Credit: Filing separately imposes a cap on the Child Tax Credit, limiting potential benefits.

Exploring the Head of Household Option

For those with children living with one spouse, filing as Head of Household presents an alternative. However, specific qualifications must be met:

1. Living Apart: The couple must have lived apart for the last six months of the year.

2. Primary Residence: The home must be the primary residence of the child for at least half the year.

3. Financial Support: More than half of the household costs must be provided by the filing spouse.

Your Financial Future Matters

While acknowledging that a split is never easy, understanding the financial implications and making informed choices is crucial. If your divorce is impending and you want to explore your tax options or run hypothetical scenarios tailored to your situation, our team is here to help.

Contact Puma Accounting today at 315-336-8226 for help navigating your taxes during your divorce. Taking control of your financial well-being during this challenging time can pave the way for a smoother transition into the next chapter of your life. Let's ensure that your tax choices align with your financial goals, providing stability and clarity as you navigate the path forward.

New York State Volunteer Firefighters and Ambulance Workers Tax Credit

New York State Volunteer Firefighters and Ambulance Workers Tax Credit: A Financial Boost for Local Heroes

In the great state of New York, community heroes are often found among us, serving as volunteer firefighters and ambulance workers. Recognizing their invaluable service, New York offers a special tax credit to show appreciation for these brave individuals. At Puma Accounting Tax Pros, we believe it's essential to shed light on this tax credit and help eligible individuals make the most of it.

Eligibility Criteria:

To be eligible for the New York State Volunteer Firefighters’ and Ambulance Workers’ Credit, you must meet two simple criteria:

• Active Volunteer: You must have actively served as a volunteer firefighter or volunteer ambulance worker at any time in the tax year. Your dedication to safeguarding your community makes you eligible for this credit.

• A resident of New York State: You must be a resident of the state of New York. This credit is designed to benefit those who contribute to the safety and well-being of their local communities within the state.

Exemptions:

It's important to note that you cannot claim this credit if you already receive a real property tax exemption related to your volunteer service. However, there's a silver lining for those with shared property ownership. If your property has multiple owners, and your volunteer service wasn't the basis for the exemption, you may still be eligible to claim the credit.

Credit Amount:

Now, let's talk about the financial aspect of this credit. The New York State Volunteer Firefighters’ and Ambulance Workers’ Credit is worth $200. For those who are married and file joint tax returns, and both spouses are eligible volunteers, the credit doubles to $400. This extra incentive recognizes the commitment of families who volunteer together to ensure their community's safety.

What Makes This Credit Special:

What sets this credit apart is that if it exceeds your total tax liability for the year, any excess amount will be refunded to you, without interest. In essence, this credit isn't just about reducing your tax bill; it can put money back into your pocket. This financial benefit can be a well-deserved reward for your selfless service to your community.

At Puma Accounting our Tax Pros, don’t want you to miss out on this credit if you meet the eligibility criteria. Don't miss out on this opportunity to receive a credit of up to $400 for your dedication to keeping your community safe. We encourage all eligible individuals to explore this credit and ensure that you receive the financial recognition you deserve for your volunteer service.

Tax Extensions 2024

PUMA ACCOUNTING CAN DO IT FOR YOU

IT'S FREE AND EASY 

As the tax season approaches, many people may find themselves struggling to get their finances in order to file their tax returns on time. However, sometimes unforeseen circumstances may arise that can make it difficult to meet the April 58th deadline. Fortunately, there is a way to get more time to file your taxes with a Tax Extension. Puma Accounting can file your Tax Extension for FREE!

Keep in mind this extension is for time to file, not pay. If you owe money, you need to file your income tax by April 15th, 2024 or there will be a series of penalties that the IRS will enforce.

HERE IS A LITTLE BIT OF INFORMATION ABOUT TAX EXTENSIONS

What is a Tax Extension?

A tax extension is a request made to the Internal Revenue Service (IRS) to extend the deadline for filing personal income tax returns. This extension allows taxpayers to gather necessary documents, organize their finances, and accurately complete their tax returns. You will get an additional 6 months to file your return. By filing an extension, taxpayers can avoid late filing penalties, which can be as much as 5% of the unpaid taxes owed per month, up to 25% of the total amount owed.

Who Should File a Tax Extension?

Anyone who anticipates not being able to file their personal income tax return by the April deadline should consider filing a tax extension. This can include individuals who have experienced a significant life event, such as a job change, marriage, or divorce, as well as those who have complicated financial situations that require additional time to prepare their tax returns accurately.

Additionally, those who are self-employed or own a small business may benefit from filing a tax extension, as it can allow them more time to gather the necessary documents and ensure that their tax returns are accurate.

HOW PUMA ACCOUNTING CAN HELP

At Puma Accounting, we understand that tax deadlines can be stressful, and that's why we offer a free tax extension filing service. Our experienced tax pros can file a tax extension on your behalf, allowing you more time to prepare and submit your personal income tax return accurately. 

FILE YOUR TAX EXTENSION TODAY AND AVOID THE IRS LATE FILING PENALTIES!

Call us today 315-336-8226 or book an appointment at https://www.pumaaccounting.com/make-appointment  have your Taxes done or file a Tax Extension