June 17, 2019
Dear Clients & Friends:
School is letting out and the tourists are arriving, a definite sign that summer is upon us. If you get a free moment between the hustle and bustle of kid’s activities, vacations, and work, please take a few minutes to read the enclosed summer edition of our quarterly financial planner.
Once your 2018 tax return has been filed, you will have a better understanding of the effects of the new tax bill. As you may have heard on the news, some taxpayers ended up owing on their tax return when they typically received a refund. While the overall tax may not have changed, the withholding tax tables generated by the IRS were incorrect and less was withheld from paychecks throughout the year. You can correct the withholding from your paycheck or retirement by completing a W-4 for employees and W-4P for pension and annuity recipients. Adjusting your withholding throughout the year can ease the burden of owing taxes when it’s time to prepare your tax return. If you need assistance with the Form W-4 or Form W-4P or if you expect any changes to your tax situation, please contact us so we can help you plan accordingly.
While discussing the new tax law, did you know that most states did not adapt the federal tax bill changes? The state of Delaware is an example. We remind our clients to still keep track of their itemized deductions as they can be used on your state tax return.
Please remember that the IRS will never contact you by email or by phone. It is important to not give anyone claiming to be from the IRS any information over the phone or through email. You do not owe these callers an explanation, simply hang up if they say they are from the IRS or report the emails to your spam. Identity and tax theft scams are certainly evolving and so are their tactics to get information from you. Please call us if you have any concerns that you may have answered one of these phone calls or emails and given your personal information to them.
Important dates to remember for this quarter are June 17, July 31 and September 16. June 17 is the due date for the second installment of 2019 individual estimated tax, July 31 is the due date for filing 2018 retirement or employee benefit plan returns and September 16 is the due date for extending Corporate and Partnership tax returns and the third installment of estimated individual tax for 2019.
We are working faithfully to complete the tax returns we have on extension. If you have not dropped off your 2018 information, please do so as soon as possible. During the busy tax season, we sometimes forget to tell our clients how much we appreciate their patronage. We enjoy interacting and assisting you with your individual and business tax and financial needs. We appreciate any comments you have on the services we provide and welcome any referrals. If you haven’t already, please check out our website. We have recently made changes and welcome your feedback.
Starkey & Company, CPA’s
February 16, 2019
Dear Clients & Friends:
Here it is the middle of
February and tax season is in full swing. We are meeting with our business
clients to get started on corporate returns and many of our individual clients
have received and are bringing their information in. In January, we mailed
organizers to our individual clients. If
you did not receive one but would like to, please call our office today.
Enclosed, please find our quarterly
newsletter. The spring edition, released during tax season, contains quite a bit
of beneficial information. The newsletter has a new look. The company we used
to get our newsletter from was bought out and this is the new offering we have
As you know, the tax year
2018 is a year of change. The Tax Cuts and Jobs Act of 2017 signed into law on
December 22, 2017 goes fully into effect for this tax year. The main focus of
the new law was to reduce corporate tax rates from a high of 38% to a flat 21%.
For individual taxpayers, tax rates declined on average by 4%. The biggest
impact for individuals is what is deductible. The standard deduction basically
doubled. It is $24,000 for married individuals and $12,000 for singles. The
increase is offset by a loss of personal exemptions. Each exemption was worth $4,100,
now the deduction is zero. For taxpayers that itemize, there are major changes.
The deduction for state and local taxes is now limited to $10,000. Interest on
Home Equity loans is no longer deductible and deductions for employee business
and investment expenses has been eliminated. With all the changes to itemized
deductions, many taxpayers will use the standard deduction at the federal level
but will continue to itemize on the state level because the state did not
increase its standard deduction.
After you digest the new
laws’ effect on your 2018 return, we will talk about what to do in 2019 to take
full advantage of the new laws’ provisions. Our newsletter contains information
and ideas to help you manage your 2019 tax obligation. The 2019 retirement plan
contribution limits have increased, so you may want to increase your pension
withholding. These changes are detailed on the enclosed newsletter.
Did you know that the portion
of the Affordable Care Act that requires you to have health insurance or pay a
penalty will be suspended beginning with the 2019 tax year? You can still
purchase insurance on the exchange and many taxpayers qualify for subsidies to
pay part of the premium.
Additionally, if you pay
alimony, beginning in 2019, it is no longer a tax deduction for those paying
it. It will also no longer be income for those receiving it. This change only
effects new divorce agreements.
Also, the standard mileage
rate increased from 54.5 cents to 58 cents for 2019 for every business mile
driven, 20 cents per mile for medical and moving miles and 14 cents per mile
for miles driven in service of a charitable organization.
Please call our office for an
appointment as soon as you receive all of your tax information. We try to use the first-in, first-out method
when preparing returns, so the sooner you bring in all your information, the
sooner we will be able to prepare your return and get it back to you. We are looking forward to meeting with you in
the coming weeks and assisting you with your financial and tax preparation
Thank you for your continued
patronage. As always, we welcome any feedback you may have on the services we
offer and we also welcome any referrals you may have.
Starkey & Company, PA