tax returns

Marriage or Divorce

Marriage or divorce tax tips from a westchester CPA

It’s important to make sure your name matches your social security number and tax returns to avoid problems at tax time.

Westchester tax preparation experts at Herman & Company CPA’s have all the answers to your personal finance questions!

Newlyweds and the recently divorced should make sure that names on their tax returns match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could cause your tax return to be rejected by the IRS.

For newlyweds, the tax scenario can begin when the bride says “I do” and takes her husband’s surname, but doesn’t tell the SSA about the name change. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the SSN.

Similarly, after a divorce, a woman who had taken her husband?s name and had made that change known to the SSA should contact the SSA if she reassumes a previous name.

It’s easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency’s Web site, www.ssa.gov, by calling toll free 1-800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.¬† Alternatively, please contact our Westchester tax preparation firm as we can be of even greater assistance with your spousal situation.

Westchester tax preparers at Herman & Company can help you with:

  • 2013 Financial Planning for your Westchester-based business
  • Retirement planning, business valuation and bookkeeping for your small or medium-sized firm
  • Proudly serving all the towns of Westchester County, including White Plains NY, Mamaroneck NY, New Rochelle NY, Mt. Kisco NY, Scarsdale¬† NY and beyond.

How to File a Tax Return Extension Request

Westchester tax preparation in White Plains Herman and Company CPA’s have all the answers to your personal finance questions!

Unable to file your income tax return in time? You can request an automatic six-month extension to file from the IRS using Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return. An extension allows extra time to send paperwork to the IRS, but any tax due is still payable. An accurate estimate of any tax due is required when you request an extension. You may also send a payment for the expected balance due, but this is not required to obtain the extension. Interest will be owed on any amounts not paid by the due date, plus a late payment penalty is incurred if you have paid less than 90% of your total tax by that date.

There are three ways to request an automatic extension: online, mail or phone. You can file Form 4868 and make an extension-related payment online or you can mail the form to the IRS. Form 4868 can be filed by phone anytime through the tax due date using the special toll-free phone number: 1-888-796-1074. Use Form 4868 as a worksheet to prepare for the call and have a copy of your federal income tax return available as you will need to provide certain information from it. The system will give you a confirmation number to verify that the extension request has been accepted. Note this number on your copy of Form 4868 and keep it for your records. Do not send the form to the IRS if you have filed it by phone.

As filing tax extension requests is an area of our expertise, please contact us for more detailed information on how to file an extension correctly.

Retirement Contribution and Other Limitations for 2013

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Westchester tax preparers at Herman & Company CPA’s have all the answers to your personal finance questions!

The IRS has announced cost-of-living adjustments affecting the dollar limitations for retirement plans, deductions, and other items. Several of the limitations are higher for 2013 because the increase in the cost-of-living index met the statutory threshold. However, some limitations did not meet that threshold and remain unchanged from 2012.

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increased from $17,000 in 2012 to $17,500 in 2013. The catch-up contribution limit for those age 50 and over remains unchanged at $5,500.

The contribution limit for both Roth and traditional IRAs has increased $500 from 2012. You can contribute up to $5,500 ($6,500 if you are age 50 or older by year-end) to your IRA in 2013 if certain conditions are met (i.e., sufficient earned income). For married couples, the combined contribution limits are $11,000 ($5,500 each) and $13,000 ($6,500 each if both are age 50 by year-end) when a joint return is filed, provided one or both spouses had at least that much earned income.

Keep in mind that contributions to traditional IRAs may be tax-deductible, subject to specific limitations that increase for 2013. When you establish and contribute to a Roth IRA, contributions are not deductible, but withdrawals are tax-free when specific requirements are satisfied. In addition, there are no mandatory distribution rules at age 70 1/2 with a Roth IRA, and you can continue to make contributions past age 70 1/2 if you meet the earned income requirement.

The 2013 limitation for SIMPLE retirement accounts increased $500 to $12,000. However, the SIMPLE catch-up contribution for those age 50 by year-end is unchanged from 2012 at $2,500.

The 2013 contribution limit for profit-sharing, SEP, and money purchase pension plans is the lesser of (1) 25% of the employee’s compensation-limited to $255,000, an increase of $5,000 from 2012 or (2) $51,000, an increase of $1,000 from 2012.

The social security wage base, for computing the social security tax (OASDI), increases to $113,700 in 2013, up from $110,100 for 2012. The additional $3,600 for 2013 represents an increase of 3.3% in the wage base.

Finally, the annual exclusion for gifts increased by $1,000 and is $14,000 in 2013.

Please contact Westchester tax preparation firm Herman & Company CPA’s if you have any questions!

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.