Tag: turbo tax

Married Filing Separate vs. Filing Jointly

I have spent the entire Saturday analyzing my tax returns, both Federal and State, first I did a Joint return with the Federal we came out even that is we do not owe the tax man and he owes us very little, not even enough for a very good bottle of wine. However with the sate that was different we owe almost five hundred dollars, so I decided to evaluate the option of Married Filing Separate, at the back of my mind I know that in the Federal Tax return this is the most expensive option, but there could be savings on the State return.

I allocated all the income between my wife and I, that is whatever income is attached to her social security number belongs to her, then I analyzed the Schedule A deductions, this gets a little tricky, like the mortgage interest expense and Real Estate Taxes is attached to my social security number therefore I had to split those between us. Expenses such as medical, dental, eye glasses we have our separate bills for the year and as faith would have it all the medications are mine. I had to pay special attention to the medical expenses because we are residents of Ohio and there is a credit for medical expenses on Ohio Tax Line 47. Please note there are many good Tax Return software on the market which could have done this automatically, if I had use one like TurboTax it would have taken me a lot less time, but it snowed today and I am confined to the basement of our home.

After refiguring both federal and State, the result shows it would be a very bad idea to file Married Separate for the Federal return, however on the State return was completely different, we both ended up with small refunds instead of a liability of almost five hundred. On our combine return filing joint we had an effective Tax Rate of almost 5% while on the Married Filing Separate return my effective tax rate is 4.5% and hers 3.5% although collectively we have a total higher rate on the Separate returns we did not owe any State Tax as in the Joint Return which has a lower rate.

I was very amazed and I checked it several times, then I logged on to the State of Ohio Tax Web page and entered the information for two separate returns and Walla I was right all that work pays off sometimes it is better to File Married Filing Separate for the State return. Although I am not a Tax Expert I found the process was not that difficult our return was a simple clear cut return with just my wife and I, can I claim the dog?, OH the dog belongs to my youngest child Dang remember a pet is not a dependent.

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Online Accounting Services

Bookkeeping and accounting services work hand in hand when it comes to dealing with the financial aspects of the business. These are important activities for any business if the business wants to function well. Accuracy in the financial statements of any business, whether it is a small or large size company, is very important because a single mistake can harm the entire business.

Bookkeeping is important to a business, but most business owners don’t like handling financial records. Because owners don’t like bookkeeping a lot of businesses today often look for a web based accounting company that offers bookkeeping services. There are a lot of online bookkeeping providers available that offer a lot of accounting features with speedy processing and low prices. Some accounting activities that are offered online include bookkeeping, financial statement preparation, and tax filing.

Accounting deals mainly with all the financial data of the business and it requires knowledge of the proper record keeping function. Even the internal accounting staff of a company should have at least a basic knowledge on the proper accounting of their financial records and reports. However, if you don’t want to hire a full time accountant many companies are choosing to outsource their accounting services to a certified online accounting company. Online accounting delivers accurate services that can be quite a bit cheaper than hiring a personal certified accountant.

If companies choose online accounting services, they are assured that they will get an accurate recording of their finances, high quality work, and organized financial records.  The company will also have a lot of time and energy to focus more on the other problems and concerns within the organization. With an online accounting company, the management team will rest assured knowing that they have a quality and certified accountant who will aid them in their financial record keeping.

So if your company wants to save extra money in their accounting process but still wants to get high quality results regarding their financial records and reports, the best option is to outsource. You might want to look for a web based accounting company that will handle all the financial records of the company including bookkeeping services, payroll, and taxation services. Nowadays you can even find companies that will help you in the preparation of your financial statements. Leave the accounting to the accountants so that your company can focus on its core competencies.