Phillip Financial Tax & Accounting

IRS has delayed tax filings this year until February 12th.
This means that the earliest your tax preparer can officially submit your tax return is 2/12. If you are usually an early filer, note that you will be delayed a few weeks this year. Paula Mercure

What does it mean to file " married filing separately"

Many people opt to file separately even though they are married. Many times this is done in an effort to keep the finances separate from your spouse kind of deal. Additionally, if immigration paper work is in play then there are only two tax filing options: married filing joint and married filling separately in order to not jeopardize qualifications.

In these cases, it is NOT in your best option to file married filing separately because you become ineligible for certain credits:

1. If you own a home with tax deductible mortgage interest.

2. If you are a full time student in school.

3. If you have a dependent (you will lose earned income credit and child tax credit is reduced)

And it doesn't stop there, however those are the most common ones.

Give us a call to discuss or leave a question or comment below.

What does it mean to have a disallowance either by federal or state tax department?

Let's talk about Credits

Many times low to mid income families get what is called earned income credit. A credit is money that the government actually gives to you. "Not money they withheld from you". Consider it a gift.

Now, if the government is giving you money, there are strict guidelines that you must meet and you must be able to prove if asked in order to qualify.

Things to know:
1. If you get a tax letter, you must respond timely and accurately

2. If you are disallowed a credit, it'll follow you for years to come and haunt you like a plague 🤦‍♀️

3. IRS and state tax departments communicate. It may not happen immediately but I guarantee you, they are discussing you 😂

I clearly cannot discuss everything in this post but let's talk taxes.

Ask any tax questions you have in the comments and I'll be happy to respond. Chances are, someone else is wondering the same thing.

Ramifications of tax debt: HOMELESSNESS!!

You might be thinking, homelessness???? That's extreme! ....... Not quite!

You find me talking about retirement quite a bit because it is the area that we are most misinformed.
Withdrawing $50k from your 401k may leave you with a tax debt of up to appx $30k depending on your tax bracket. Not many people account for that because the average person thinks they can withdraw funds, the job withholds a portion and you are good to go. No such luck ......... If you are younger than 59.5 withdrawing from your 401k without major hardship and sound financial planning is a mistake.

Secondly, when you take from your retirement, you are affecting your future. That's really cash flow for when you are older as the amount you will get from social security is typically not enough for you to survive comfortably.

There are other options.

Discuss with us what those are.

Are you wondering which parent should claim the child on their taxes in order to receive the maximum refund and/or tax credits.

Tax tip for students
In order to be eligible for up to$2500 credit on your taxes if you are a college student, you must:
1. Maintain full time status (12 credits)
2. Be enrolled in at least one semester for the year
3. Enrolled in an accredited undergrad program
4. Your income is under $80k for the year.

Tip of the day: Withdrawing from your 401k

If you are under 59.5 years old, avoid making a withdrawal from your retirement account. The tax ramifications are deadly. Rather, consider taking a LOAN against it.

There are conditions where you may be eligible for hardship loans.

You do not need to live in New York in order for Phillip Financial to prepare your taxes.
We prepare taxes for residents of all states.

Why should you pay a tax professional as opposed to preparing your taxes yourself?
After all, there's turbo tax and other software that are less expensive or so called "free".

I can give you 10 reasons why you should not but I will only give you one for now.

YOU DO NOT KNOW TAX LAWS!!!!!!

Get a FREE estimate from us and then make an educated decision.

Tax Tip # sub topic: Green Card
If you are married, please do not file head of household.

Tax tip #2

The first day to Efile taxes this year is 1/27/20.
Your accountant can possibly prepare your taxes prior to this date but 1/27 will be the first day that IRS will accept.

Thank you to this awesome tax team. Job well done!!