Due Date

The federal income tax returns are normally due on April 15th. This year, the 15th falls on a Sunday, so the due date should be Monday the 15th. However, Monday the 16th is Emancipation Day so the due date is Tuesday 17th. Some people aren't prepared to file. Others may be waiting for Form K-1's from their investments. Either way, if the return is not filed on time, an extension will need to be filed.

Federal Extension

An extension is filed by completing Form 4868. The extension will allow six months, or until October 15th to file the return. The extension will extend the time to file the return, it does not extend the time to pay the tax. Any tax that is due needs to be paid by April 17. Failure to pay by the due date will result in penalties and interest being assessed. more…

The Biggest Loser is a TV show where contestants attempt to lose the most weight for cash prizes. Full Disclosure: I don't watch the show and I have only seen short clips of it. I don't proclaim to fully understand the show. It appears to me however the biggest loser has nothing to do with losing weight. It's the self-employed in Connecticut. They are losing far too much to income taxes. And they certainly aren't getting any cash prizes for it. For this discussion, the self-employed include sole proprietors, single member limited liability companies ("LLC's) and partners in partnerships. It does not include owners of "C" Corporations or Subchapter S Corporations.

more…

Here are 4 ways to Help Your CPA and Reduce Your Taxes:

1) Have a Year End Planning Meeting with Your CPA

This meeting can be in person or over the phone, it really doesn't matter.  The only thing that matters is that it happens.  Most individual income taxpayers are on the cash basis.  This means, with some limited exceptions, for a taxpayer to take advantage of a tax strategy, it needs to happen in that tax year. This is where most of the heavy lifting is done, with the tax planning.    more…

1) Harvest Capital Losses

Capital gains property includes stocks, bonds and mutual funds.  Currently, the stated rate on long term capital gains is 15%.  If you have a net loss after netting all of your gains and losses, the tax deduction is limited to $3,000. Any excess capital losses can be carried into the future. more…

The State of Connecticut recently increased the state income tax rates.  Oh, and they made them retroactive to the beginning of 2011.  Don't you Connecticut income taxpayers just love this? more…