(301) 365-­1974 info@cpa-maryland.com

speak with a cpa

Tag Archives: IRS Tax Day

tax preparation

How to Save Money on Your 2021 Tax Returns

Leave a comment


Tax season has already started. Many people are scrambling to get all of their documents together for their 2021 tax returns.

If you’re one of those people gathering their tax documents, keep in mind some of the following four ways you can save, now, on your 2021 tax returns:

  1. Contributing to your retirement account, such as an IRA, may reduce your tax bill by reducing your taxable income (depending on your tax bracket). This works especially if you haven’t maxed out on your 2021 IRA contributions. Your tax deduction is determined by your total income and filing status. You or your spouse may be covered by a retirement account at work- which limits your tax deduction. You can contribute to your IRA until April 15, 2022, so you have time! The limits are $6,000 per year for 50 years old and under and $7,000 per year for people over 50 years old.
  2. Charitable donations: Donations to qualified charities last year may help you save on your 2021 tax returns. Taxpayers who don’t itemize can also benefit. For the tax year 2021, individual taxpayers may deduct up to $300 in contributions to qualified charitable organizations. Married couples filing together can deduct up to $600 in cash donations made to approved charities. Donations must be made by Dec. 31, 2021. This deduction may reduce your taxable income for 2021 and, in turn, lower your federal tax bill.
  3. Deduct eligible business expenses: Self-employed business owners must keep detailed business expenses. These expenses may include business meals, business travel, legal fees, computer purchases, subscription fees (Microsoft Word, etc.), accounting fees (QuickBooks, etc.), marketing/advertising costs, and other eligible business expenses. Business deductions lower taxable income, which results in a lower tax bill for 2021.
  4. Earned Income Tax Credit (EITC): this is available for the 2021 tax year dependent on your adjusted gross income (AGI). Income limits vary depending on your filing status, AGI, and the number of dependents. If you qualify for this credit, it may offer significant tax savings. 

As you prepare to file your 2021 tax return keep these 4 tax savings tips in mind. Please consult your tax preparer for more information.

AK Burton, PC, knows the current tax laws and how to work with the IRS. Our experienced tax preparers can file your business and personal tax returns and represent you to the IRS. Call us at (301) 365-1974 for a consultation. Our office is open. Covid protocols if requested. We serve the Bethesda, Rockville, and Montgomery County, MD area.

Tax Advice

Why You Need a CPA to Do Your Tax Returns in 2020

Leave a comment

Albert Einstein once said, “The hardest thing to understand in the world is the income tax.”

Even Einstein, the smartest man in the world at that time, didn’t even understand how income taxes work! So, why does the average person tackle their income tax returns every year, thinking they can do it? 

We are not elitists here as we know most people do their tax returns to save money and also to keep their earnings confidential. However, most tax filers miss important information or commit several common errors. ***

So, as July 15, 2020, (the new Tax Day date due to the COVID-19 crisis) draws closer, you may want to consider having a certified public accountant (CPA) complete and file your taxes for these reasons:

  1. The tax laws are always changing: Every year, Congress makes changes to the tax laws which are then sent to the Internal Revenue Service to enforce. Most people do not have the time or patience to keep up with these laws. CPAs keep up with all these new laws and changes and can advise you on them.
  2. Earn $200,000 or more: Top income earners are always in the bullseye for the IRS. Thus, they are more likely to be audited. CPAs can assist the high-earner in filing everything correctly and also in watching for any red flags that might bring an audit.
  3. Back taxes are owed: Your CPA will help the client find out how much they owe, how they can pay in installments and how to avoid future issues. The CPA can also contact the IRS for you, represent you to them and work out a reasonable payment plan if it is needed.
  4. Saving for children: Children may go to college or need a trust. A CPA can help you set up a trust or financial investment.
  5. Inheritance: A large inheritance of cash or property can be both a blessing and a curse. A CPA can figure out how much needs to be paid to the IRS (if any) due to inheritance taxes. They can also advise on how much to pay in the future.
  6. Side-hustle or second job: Many people have side jobs now such as Uber or Lyft or rent out a room as an Airbnb. CPAs can determine how much is owed to the IRS and then advise for future earnings and withholdings.
  7. Save money…lots of money: As we discussed earlier, many people do their own tax returns thinking they can save money from having to pay an accountant. Unfortunately, they may end up losing money by not filing complete returns or listing all their write-offs. So, they end up paying the IRS thousands of more dollars than they should have. CPAs can save them a lot of money by filing correct and accurate tax returns. 

These are just a few of the reasons you may want to hire a CPA to do your 2019 tax return and your tax returns in the future. They have the knowledge, experience, and credibility. And, they do what is best for you. 

A.K. Burton, PC, has experienced certified public accountants (CPA) on staff who can file your tax returns and represent you to the IRS. Call us at (301) 365-1974 for a consultation. We serve the Bethesda, Rockville and Montgomery County. MD area.   

**For more about common errors on tax returns, visit this page at the IRS website.

Tax Advice

It’s Tax Day Already?: Income Tax Preparation for Procrastinators

Leave a comment

So, it’s “Tax Day” and you are still rifling through your tax documents form last year. The baby is crying. Your spouse is irritated that the papers are still strewn all over the kitchen table. They haven’t been able to eat at that table for weeks since you last poured all your papers out on it. Still nothing has been done.

Oh, did we say that it’s “Tax Day” today?

You are really, really late. In fact, your accountant hasn’t even heard from or seen you since last year.

You are hours away from missing the deadline to send your tax return to the IRS. Your family is sick of seeing a pile of unorganized receipts and statements gathering dust on the kitchen table. And, finally, your accountant is looking up your name in the local paper obits to see if you’re still around.

You’re late to file. All seems lost. Will you ever recover from this incredible example of “Tax Filing Procrastination”?

Actually, all is not lost and, yes, you can recover. However, you need to act now. Here are Five Ways to Do Your Tax Preparation and Filing after you have passed the Tax Day deadline:

  1. Don’t panic: Losing your cool and bashing your head against the wall only compounds the mistake. Admit to yourself and everyone in your household that you are late this year filing your/their tax returns. There may have been circumstances that caused it (i.e. illness, surgery, family tragedy, etc.) or you may have just been flat-out neglectful. Whatever the cause, admit to it and then calmly get your tax filing plans in place.
  2. Organize your documents: You cannot file accurately if you don’t have all of your previous tax year papers organized. Now is the time to staple them all together or photograph them and store them on a flash drive. Clear the kitchen table and place all these documents in a hard file folder and/or electronic file.
  3. Contact the IRS: This is the scariest step to do, we know. However, the Internal Revenue Service has customer service people on call 24/7/365 to assist you with your questions to help you with your income tax preparation. Give them your contact information so they can note that you will be filing late.
  4. Request a Tax File Extension: Filing an extension pushes the due date for your tax returns up giving you time to get it completed. Just keep in mind that and extension for you to complete your income tax preparation protects you from likely possible late-filing penalties. Those penalties can be five percent (5%) of the amount due with your return for each month that you’re late.
  5. Consult with your licensed bookkeeper/accountant: Your accountant can be your best friend during these high-stress times. You may believe you’re the only client who has ever done this, but we can assure you, we have seen it all! So, get your documents in order and bring or send them to us. We recommend that you set up an appointment with your trusted accountant to help you with tax preparation,tax filing and, most importantly, communications with the IRS. You need to make sure all of your communications with the IRS are documented and your accountant will do that for you. We are your advocate.

So, as you can see, procrastination in filing your tax returns is not the end of life as we know it. You do have a “second chance.” Just get moving now and try not to let it happen in the future. (While this blog may be helpful, we also advise that you read the IRS specific instructions if you are filing late.)

If you need help with late tax preparation and tax filing, contact our A.K. Burton, PC offices in Bethesda, Maryland. Our experienced and licensed tax lawyers and accountants can answer all your questions and also assist you with your communications with the IRS. We serve clients in the Washington, D.C., Bethesda, Maryland and Northern Virginia region.