Filling out a W4

Filling out a W-4 form, also known as the Employee’s Withholding Certificate, is a standard procedure when starting a new job or when you want to update your tax withholding information with your employer. Here are the steps to fill out a W-4 form:

  1. Personal Information: Enter your personal information, including your full name, address, Social Security Number (SSN), and filing status (single, married filing jointly, married filing separately, or head of household).
  2. Multiple Jobs or Spouse Works: If you have more than one job at the same time or if you’re married and your spouse works, you’ll need to decide whether to check the box in Step 2. This step helps adjust the amount withheld from your paycheck to account for your total income.
  3. Dependents: In Step 3, you can claim dependents if you have any. This will affect the amount of tax withheld from your paycheck. Each dependent you claim reduces your taxable income.
  4. Other Adjustments: Step 4 allows you to adjust your withholding further. If you expect to claim deductions other than the standard deduction and want to reduce your withholding, you can enter the amount here.
  5. Extra Withholding: Step 5 allows you to specify any additional amount you want withheld from each paycheck. This might be useful if you have additional income not subject to withholding or if you want to ensure you don’t owe taxes at the end of the year.
  6. Sign and Date: Finally, sign and date the form to certify that the information you’ve provided is accurate.

Remember, the W-4 form can be a bit complex, especially if you have multiple sources of income or if your tax situation is more complicated. If you’re unsure about how to fill it out, you may want to consult with a tax professional or use the IRS’s online withholding estimator to help you determine the appropriate withholding allowances. Keep in mind that you can update your W-4 form at any time if your circumstances change.

Backdoor Roth IRA

A Backdoor Roth IRA is a strategy used by high-income earners to contribute to a Roth IRA even if their income exceeds the limits for direct contributions. Here’s how it works:

  1. Income Limitation: Roth IRAs have income limitations. In 2022, if you’re single and your modified adjusted gross income (MAGI) is above $144,000 (or $214,000 if married filing jointly), you’re not eligible to contribute directly to a Roth IRA.
  2. Traditional IRA Contribution: With the Backdoor Roth IRA strategy, you first make a nondeductible contribution to a traditional IRA. Nondeductible means you don’t get to deduct this contribution from your taxable income.
  3. Conversion: After making the nondeductible contribution to the traditional IRA, you then convert the traditional IRA funds into a Roth IRA. There used to be a rule that prevented high-income earners from converting traditional IRAs into Roth IRAs, but as of 2010, that restriction was lifted, allowing anyone, regardless of income, to convert traditional IRA funds to Roth IRA funds.
  4. Tax Implications: Since you’ve already paid taxes on the money you contributed to the traditional IRA (because it was nondeductible), you won’t owe taxes on the amount you convert to the Roth IRA. However, if you’ve made any earnings on your traditional IRA contributions before converting, those earnings will be subject to income tax in the year of conversion.
  5. Pro Rata Rule: It’s essential to be aware of the pro rata rule, which may affect the tax consequences of a conversion if you have any existing traditional IRAs with pre-tax contributions or earnings. This rule considers the total balance of all your traditional IRAs when calculating the tax owed on a conversion.
  6. IRS Reporting: When you file your taxes, you’ll need to report the nondeductible contribution to the traditional IRA on Form 8606. This form helps the IRS keep track of the basis (nondeductible contributions) in your IRAs.

Overall, the Backdoor Roth IRA strategy allows high-income earners to take advantage of the benefits of a Roth IRA, such as tax-free growth and tax-free withdrawals in retirement, despite the income limitations. However, it’s crucial to understand the tax implications and rules surrounding this strategy and, if necessary, consult with a tax professional or financial advisor to ensure it’s the right approach for your financial situation.

It’s 2024. Here’s some changes for the 2023 Tax Season

Adjusted Income Tax Brackets:

  • The income tax brackets for 2023 have undergone slight adjustments to accommodate inflation. Despite still maintaining seven tax rates, each rate’s income ranges (tax brackets) have shifted.

Increased Standard Deduction:

  • After adjusting for inflation, the standard deduction for 2023 has slightly increased. It stands at $13,850 for single filers, married couples filing separately, and $20,800 for single heads of household. For married couples filing jointly, the standard deduction rises to $27,700.

Itemized Deductions:

  • Itemized deductions remain largely unchanged for 2023. Notable points include:
    • A $10,000 cap on deductions for state and local income taxes, property taxes, and real estate taxes.
    • A limit of $750,000 on the mortgage interest deduction.
    • Medical expenses are deductible only if they exceed 7.5% of adjusted gross income (AGI).
    • Deduction limits for charitable donations stand at 30% of AGI for contributions of non-cash assets and 60% of AGI for cash contributions. The overall limit is typically 50% of AGI for both cash and non-cash assets.

Increased Contribution Limits for Retirement Accounts:

  • Contribution limits for traditional IRAs, Roth IRAs, tax-deferred 401(k)s, and Roth 401(k)s have slightly increased for 2023. Individuals can contribute up to $6,500 to an IRA, with an additional $1,000 catch-up contribution for those aged 50 and older. Contribution limits for 401(k)s have risen to $22,500, with a $7,500 catch-up contribution for individuals aged 50 and older.

Expanded Health Savings Account (HSA) Contributions:

  • The maximum contributions to HSAs have increased for 2023. Individuals can now contribute up to $3,850, with an additional $1,000 catch-up contribution for those aged 55 and older. Family contributions have risen to $7,750.

Child Tax Credit:

  • The Child Tax Credit remains at $2,000 per child under age 17 for 2023. However, it is subject to phase-out starting at $400,000 for joint filers and $200,000 for single filers. A $500 credit is available for other qualified dependents.

Adjustments to Alternative Minimum Tax (AMT) Exemption:

  • The AMT exemption for 2023 has increased, affecting mainly households with incomes over $500,000. Exemptions stand at $81,300 for single filers and $126,500 for married taxpayers filing jointly. Phase-out thresholds are $1,156,300 for married taxpayers filing jointly and $578,150 for all other taxpayers.

Higher Estate Tax Exemption:

  • The estate and gift tax exemption for 2023 has risen to $12,920,000, indexed to inflation. The annual gift exclusion also increased to $17,000 per recipient.

2021 Preparation

Happy new year! I’m looking forward to working with everyone this year.

I will not be having in person appointments this year. I will be offering new preparation options this year.

Anyone who took an early distribution from retirement in 2020 under the special Covid rules should wait until Feb 18th to schedule – The IRS has not produced the necessary forms yet. This makes it impossible to finish returns until the forms are finalized.

Scheduled Zoom Appointments

Schedule a Zoom call as you would a regular appointment. The only difference is I will need your documents at least two days in advance. Documents can be dropped off through the mail slot at any time. They can also be mailed to the office. Additionally documents can be submitted online through Intuit Link.

If I do not receive your documents in advance, I may have to reschedule your appointment. I need to review them beforehand in order to maintain my time schedule.

Remote Appointments

Remote appointments will have a scheduled preparation time but will not have a Zoom component. Documents should be submitted at least two days in advance of preparation time. Documents can be dropped off through the mail slot, mailed in, or submitted online through Intuit Link.

Happy New Year!

I’m looking forward to working with everyone this year. Appointment booking and scheduling will be up this week. I will be working remote, but will be offering scheduled Zoom meetings.


You might want to file a 2019 return to receive your stimulus check

The IRS’s website currently does not have information available regarding how the stimulus checks will be distributed. I will make updates as more information is made available to us.

Who is eligible for a stimulus payment

  • Single taxpayers who have an adjusted gross income of $75,000 or less
  • Head of household who earns $112,500 or less
  • Married taxpayers who earn $150,000 or less
  • The credit is $1,200 per adult, and 500 per child

As income increases over these thresholds, the amount of credit received will diminish.

I didn’t file a 2019 tax return

You should be okay. If the IRS doesn’t have 2019 on file, they will base it on the 2018 return.

Who should consider filing a 2019 return

There are some instances where it may be in your best interest to file a 2019 return.

  • Your income was abnormally high in 2018. Maybe you unloaded stocks, sold property, or cashed in retirement to buy a house. If your income was over the threshold you won’t receive a payment.
  • You don’t normally file a tax return. This doesn’t apply to people receiving veterans benefits or social security. There are some taxpayers who don’t file a return. Maybe you graduated college and didn’t have income yet. The way I’m reading it, you won’t get a stimulus payment if they don’t have a return on record.
  • You closed your bank account that was used on your 2018 return. So far they’re saying if you provided direct deposit information on your return the stimulus payment will go into that account. When a direct deposit is rejected the IRS cuts a check and mails it to you. This usually takes months.
  • You moved after 2018 and didn’t have direct deposit. If the IRS mails a check to the wrong address a couple of things could happen. It might get forwarded if you still have a forward on your mail (might want to renew that if your in this situation). The check might also get returned. Again, there will probably be a lengthy process to have it reissued.

I’m currently prioritizing any clients who meet the above criteria. This process will probably change as the IRS provides more information.

What if I was underpaid or overpaid?

So far if your advance payment is LESS than what you’re owed when you compute your 2020 return, you’ll get the excess as a credit on that return. But if your advance credit is GREATER than what you’re actually owed when you file your 2020 return, there currently is no mechanism to 1) repay the excess payment, or 2) recognize the excess amount as income.

Remote preparation recommended. IRS Pushes Tax Deadline To July 15

All filings can be delayed until July 15. I’m also hearing from clients in emergency positions that a shelter and place order is going to be announced.

If there is a shelter in place order and it’s similar to New York I should be able to go back and forth to the office. I’d ask clients to utilize Intuit Link when possible. It’s safest and quickest.

I shifted to preparing returns from home. My wife is working at her job remotely and the kiddos can be a handful 🙂 All in all, we’re doing quite well. I hope you are as well.

Let’s work together for the best possible outcome.


Mailing in or Dropping off return materials

EDIT: I recommend working through Intuit Link. It’s fast and secure. The IRS and State has extended the deadline to July 15.

Covid 19 is quickly changing the way everyone does business. I am not having face to face appointments. 10-20 clients are submitting paper documents daily. So I’m observing social distancing, but is that enough?

I’ve asked several people who specialize in the field. I’ve received several different answers. Here’s what I’m doing. –

  • When documents come in they are quarantined for three days.
  • My work space (desk, keyboard, mouse) is sanitized between files.
  • I am changing disposable gloves between client files.

I’d like to wear a mask, but they are not available. I hope I’m over reacting, but I’m 44, and I have asthma. I also have a lot of clients who are high risk. I want to be proactive. I hope you do as well. Here’s a couple of ways you can help…

Submit your documents online

This is the safest way to do it. We have a secure system through intuit link. All you need is a phone camera or a scanner. Mike is working from home and will be happy to walk you through it. This also avoids us surcharging you for shipping.

Only send paper

Please, no plastic, staples, or paperclips. The virus lasts longer on those surfaces.

I’ll be updating as this progresses. So far, it’s going quite well. Thank you for your support in these matters.


Social Distancing Update

Out of concern for all I stopped having in office appointments last week. Clients can –

  • (Our Preference) Share documents online via Intuit Link. This is the safest way to do it.
  • Drop their materials through our mail slot
  • Mail their materials to my home office at 4 Alma Rd in Millis

How we’re handling returns

Documents received are processed 2-3 days after they arrive. They are returned to clients via priority mail with signature forms and an invoice.

How much will it cost for preparation

Except for unique circumstances where someones return changed you will be billed the same as last year plus $10 for shipping.

Can I just come in and sign?

No. That defeats the purpose of social distancing. We’re handling all documents individually and keeping things as sterile as possible. It’s our sincere hope that we are over reacting. But we’ve decided to be proactive in uncertain times.

There’s changes from last year. I need to talk to Jim about them.

No problem. Let us know what is going on and we will be happy to help.

Thank you for supporting this effort. We need to take measures to contain the virus. I’ve spoken to many healthcare workers, and they are concerned. Let’s do all we can to make their jobs manageable in these challenging times.

It’s 2024. Here’s some changes for the 2023 Tax Season

Adjusted Income Tax Brackets: Increased Standard Deduction: Itemized Deductions: Increased Contribution Limits for Retirement Accounts: Expanded Health Savings Account (HSA) Contributions: Child Tax Credit: Adjustments to Alternative Minimum Tax (AMT) Exemption: Higher Estate Tax Exemption:

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Our Office Has Moved!

I am working from my home office in Millis MA; near Medway, Holliston, Norfolk and Medfield. Street front office with plenty of on street parking. New Address is 4 Alma Rd, Millis, MA 02054