Everything You Need to Know and More About Tax Season 2021

2021 Tax Season

With the ups and downs of the past year, believe it or not we are rapidly approaching a new Tax Day, Thursday, April 15, 2021. That means that we are currently in the midst of tax season 2021. So, if you’re wondering about some of the changes from the past year, our accounting experts have all the information that you’ll need to know and more.

Important Information about Tax Season 2021

The Start of Filing Season

One of the first things that everyone should know about tax season 2021 is that it’s start will be later than usual. In fact, that the IRS will start accepting and processing tax returns on Friday, February 12, a bit later than previous years that started in January.

Tax documents, money and calculator on a table

Recovery Rebate Credits and Economic Impact Payments

If you’re one of the taxpayers that received an Economic Impact Payment, make sure that you hold on to your Notice 1444 with your records for the year.

You may be able to claim the Recovery Rebate Credit on your federal income tax return if:

  • You didn’t receive an Economic Impact Payment
  • The payment was less than $1,200 ($2,400 if married and filing jointly in 2018 or 2019), in addition to $500 for every child had in 2020

Taxpayers who didn’t receive the full amount of the Economic Impact Payment they were eligible for can claim the Recovery Rebate Credit when they file in 2021.

Calendar with the 15th highlighted

Changes to Charitable Donations

Another new wrinkle in tax season 2021, taxpayers that aren’t itemizing deductions are eligible to take a charitable donation up to $300 for 2020 cash contributions to qualifying organizations. Click here for more information about the eligible organizations.

For any other questions or concerns about tax season 2021, leave it up to the pros at Calabrese & Associates, P.C. to take care of your filing. Our team of expert accountants have the experience and knowledge to get the most out of your returns.

How to Choose the Right Tax Preparer for You and Your Needs

Tax Preparer

With the end of a tumultuous 2020 approaching, tax season is right around the corner. And with the topsy-turvy nature of that last year, it’s never been more important to get the right tax preparer services for you and your individual needs. Therefore, take it from the pros. Here are a few tips and tricks to use in order to find the right accountant for your situation and finances.

Tips for Find the Right Tax Preparer

Check the Credentials

One of the best ways to determine you’re enlisting the efforts of a qualified tax preparer is by checking their credentials and affiliations. Ideally, you want to search for certified public accountants (CPA) like Calabrese & Associates, P.C.

Likewise, it helps if, like us, they are members of the American Institute of Certified Public Accountants, the New York State Society of Certified Public Accountants, and/or the National Association of Tax Professionals. Ultimately, experience and association memberships are key as these organizations usually have a code of ethics and many certification requirements.

2021 Taxes calculator on papers

Ensure you’re Getting the Right Attention

In terms of choosing the right tax preparer for you and your needs, it’s important to consider the level of attention and care you’ll be receiving. When you enlist the services of a big, corporate firm, you might feel like just another number or account for them.

However, with an accounting team like Calabrese & Associates, P.C., you can rest easy knowing that you’ll be receiving highly personalized attention for your taxes and preparation. There will always be a real person to call or contact that will know all about your situation and be prepared to give you the right financial solutions.

Magnifying glass over a calculator

Do your Homework

Generally, you want to ensure that your tax preparer can take care of your needs in the account of an exam or audit. Whoever you research to become your accountant, you need to be able to ask these questions. And in the event they’re answered to your liking, you can begin a fruitful, professional relationship.

When you’re looking for a tax preparer, consider the hard-working, dedicated team of Calabrese & Associates, P.C. We have the knowledge and experience to take you forward into financial success. Check out our website to learn more and schedule a consultation today!

How Tax Rates May Change during the Upcoming Biden Presidency

Accountant filing taxes

No matter who is president, chances are that they will have different ideas on taxes that will change the amounts individuals and companies will have to pay. And, under new President-elect Joe Biden’s impending presidency, that doesn’t seem likely to change. Therefore, keep up with the latest changes to tax rates by checking out our quick, simple explainer blog on the topic.

Potential Tax Rates and Changes Expected under Biden

Corporate Tax Rates

One of President-elect Biden’s most touted tax rate changes includes an increase to the corporate tax rate to 28 percent. Biden reportedly intends to repeal President Donald Trump’s tax plan, which initially lowered the corporate tax rate from 35 percent to 21 percent.

However, according to the recent Q4 CNBC Global CFO Council Survey, the vast majority of corporate CFOs do not anticipate Biden’s business tax hike will go through as planned. In fact, they generally believe he will be more neutral to businesses and corporations, with more of a focus on pandemic spending and economic growth instead of changes to corporate tax rates.

Rates and money with a financial graph

Social Security

One of President-elect Biden’s most contentious proposed tax rates is an increase on payroll taxes for those earning over $400,000 a year. The plan ultimately aims to boost revenue to Social Security by imposing a 12.4 percent payroll tax on those higher earners.

Social Security card with balance sheet and cash

Deductions

Another one of President-elect Biden’s proposed changes to tax rates encompasses Qualified Business Income. If he goes through with his plan, his administration would phase out and eventually remove the 20 percent Qualified Business Income (QBI) Deduction on taxpayers making more than $400,000 per year.

Although there’s been a lot of chatter about these policies, there’s no telling what could actually happen during Biden’s administration in our current economic climate. Keep an eye on the news and our Calabrese & Associates, P.C. blog in the coming months for more information as it becomes available.

5 Savvy Real Estate Accounting Tips to Prepare for Year-End

Real Estate Accounting

As we near the end of a tumultuous 2020, many businesses, including real estate firms, are planning for the upcoming year ahead. It’s certainly been a topsy-turvy year for anyone selling or buying residential and commercial properties, so year-end preparations might be a little different this time around. Therefore, our expert team has you covered with all the real estate accounting tips you need to end 2020 strong.

End the Year Strong with Professional Real Estate Accounting Tips

1.      Check Financial Statements

Ensure that you have a complete balance sheet of all your assets, liabilities and more by verifying your financial statements. By providing your accountant with these update reports, they will be able to, if needed, point out discrepancies and rectify their accuracy before year-end.

Financial Statements

2.      Update Software

Throughout the year, there might have been new and improved software available for your real estate firm. New real estate accounting software, along with your tax team, will guarantee access to the latest tax forms, regulatory changes and other important tools.

3.      Verify Employees

With as much that has happened in 2020, you may also have experienced additions, or potentially subtractions, to your staff. Therefore, to ensure that your year-end reports have the right information, you may need to audit your employees. That way, all the right people connected to your business will be accurately represented in the system for your accounting team.

Employee Verification

4.      Plan for 2021

One of the best, most tried-and-true real estate accounting tips we can give for year-end is actually planning for the impending year ahead. Far too often businesses, especially in real estate, will neglect to do any prior planning. And, when the new year rolls around, they will have the tools and prep work needed to succeed.

With that in mind, both residential and commercial real estate companies need a trusted accounting and tax partner like Calabrese & Associates, P.C. to end 2020 on the right foot and ultimately help them get ahead for 2021.

The Top Reasons Why Businesses Should be Outsourcing Payroll

Outsourcing Payroll

Although some companies choose to handle it in-house, there’s a reason that so many businesses continue to outsource their payroll service to a trusted, local accounting firm. So, if you’re trying to decide between the two, we can help. Check out these top benefits of outsourcing payroll services to accountants like Calabrese & Associates, P.C.

The Advantages of Outsourcing Payroll to an Accounting Firm

Calculations and Payments

When it comes to paying employees, you need to be able to complete the different calculations it takes to reach a final figure. Between totaling hours, verifying them and including the designated pay rate, while accounting for the appropriate deductions and benefits, there’s a lot that goes into it.

That’s why so many companies are outsourcing their payroll services entirely. With the amount of different math and knowledge involved in the process, business owners are taking a calculated risk when they put the task in the right, experienced hands. That way, they can ensure their employees are compensated accordingly.

Accountant using a calculator

Reduced Risk

While it might seem simple, payroll is not easy. Beyond all the knowledge required, you must also be aware of different regulations.

If you do not, your business could become the victim of steep penalties and fines, which can add up quickly. So, to guarantee you steer clear of these roadblocks, outsourcing payroll is as good of a start as any.

Payroll statement on a table

Lower Costs

With all the time it takes to learn how to do payroll and actually complete it twice a month, that’s a great deal of effort. And, when you consider the old saying “time is money,” doing your own payroll can cost you a lot more than you are saving.

With outsourcing payroll, you can turn your time and attention to other tasks and responsibilities. Even when you consider all the software, training and updates of the process, the savings can be immense.

If you’re interested in outsourcing your payroll to an accounting firm like Calabrese & Associates, P.C., you’re making the right choice. For more information or to schedule a consultation, visit our website today!

The Top Benefits of Tax Preparation Services for Businesses

Tax Preparation

As the end of the year comes into focus, so too does next year’s tax filing. And when you consider the craziness of the last year, there are many details that you might not think to consider. That’s where a local accounting firm comes in. By using professional tax preparation services for your business, you will ensure that your finances are in the right hands. If that’s not enough to convince you, check out these key advantages.

Why Companies Should Use Professional Tax Preparation Services

Expert Knowledge

One thing you can count on when using tax preparation services is knowledge crafted from years of experience. Since tax rules are often complicated, a tax expert will help you locate the proper credits and deductions that you qualify for.

Not to mention, they’re also a great resource for any tax advice and for ensuring you avoid any adverse consequences from a wrongful tax filing.

Person crunching numbers with a calculator

Increased Funds

When it comes to hiring tax preparation services, naturally it’s going to cost your business money. However, when weighed against the actual tax savings they can find you, the expense is usually negligible.

By knowing your unique situation and having an up-to-date understanding of the rules, tax professionals will find you the best possible savings. Besides, when compared against the value of the hours it would take to complete your own taxes, the decision is a no-brainer.

Man presenting a clipboard with a file on it

Peace of Mind

Another one the best things about hiring tax preparation services for your company or organization is the peace of mind it will bring. You won’t have to worry or stress anymore that your taxes aren’t done right or on time. With a seasoned professional, you can focus more time and energy on doing what it is that makes your business profitable.

If you’re interested in professional tax preparation services, look no further than Calabrese & Associates CPA. Our team can give you the personalized service your company needs to succeed. Visit our website to learn more!

Estate Planning Checklist: Everything you Need to Know

Estate Planning Checklist

Estate planning should never be taken lightly. So, if you’re beginning to take proactive steps to plan out yours, you might not be aware of all the different tasks you must complete along the way. Therefore, make sure you have everything covered by looking at our estate planning checklist. After all, it is essential to consider every detail.

Getting Started with an Estate Planning Checklist

Below are the most important steps to take to ensure your estate plan is prepared correctly and ready to be set in motion.

1.      Take an inventory of your items

This step of the estate planning checklist is self-explanatory, however crucial. Since everything you own in considered part of your estate, you need to take stock of it all.

From your home value and insurance policies to safety deposit boxes and physical assets, you need to account for everything to best preserve your estate as intended.

Accountant meeting with a client

2.      Consider your family’s needs

After you accurately tally all of your belongings, you must then start to account for your family and close ones’ needs. Although it might seem somber, it is important to answer questions like:

  • Do I have enough life insurance?
  • Who will be the guardian of my children?
  • How will my children be cared for?

By providing concrete answers to these significant questions beforehand, you will save your family from costly court fights that might drain your estate’s assets.

Estate planning documents

3.      Establish legal directives

When building out your complete estate plan, ensure that it includes comprehensive legal directives. A few of these might include a trust, medical care directive, durable financial power of attorney and limited power of attorney. Just be extra careful who you give it to, the position holds a lot of power!

4.      Identify beneficiaries

Even if you establish a will, it still may not be inclusive to all your wishes. To that end, you must individually assign beneficiaries and contingent beneficiaries for retirement plans, insurance accounts and other matters.

Document and pen on a desk

5.      Consider a professional

No matter which way you spin it, estate planning is a difficult, time-consuming task whether you have an estate planning checklist or not. Therefore, why not hire a trusted, experienced estate planning professional to take care of it for you?

That way, you know you’ll be receiving the highest level of expertise and that nothing important will fall through the cracks. And when you’re ready to get started, the team at Calabrese & Associates, CPA will be here to help! Contact us today to get started.

The Top Benefits of Using a Local Accounting Firm like Calabrese

Local Accounting Firm

When it comes to accounting firms, you typically have many choices, both for personal and business finance purposes. In this blog, we will spotlight the benefits of choosing a local accounting firm.

Why Go with a Local Accounting Firm?

When it comes to accounting, you are likely familiar with the “Big Four” names: Deloitte, PwC, KPMG and Ernst & Young. But what you may be unfamiliar with is your local accounting firm and how they may be more beneficial for your brand’s accounting needs.

Person typing on a laptop

Build a relationship with your accountant

When you turn to a large, corporate firm, there’s a greater chance of having to see a new accountant every time you need something handled. This creates a distance between you and your accountant, and your business dealings are never fully understood.

At a local firm, there is a shorter list of clients but a greater amount of focus on said clients. Local accountants will try to familiarize themselves with your business from top to bottom, and are a friendly face you recognize immediately when you need accounting services.

Person plugging in numbers

Flexibility

Due to the high volume of employees at corporate firms, there are usually a defined set of practices to follow. Clients cannot pick and choose what accounting services they require, or discuss a payment adjustment or plan. Instead, there are a list of packages and the client has to decide on one that is the most relevant, even if they don’t require all the services.

Local accountants can do all kinds of accounting services, or only a few depending on your needs. They can also be open to discussing different payments. Another positive is that all your services would be through one or two people, as opposed to seeing a different accountant in every department and keeping track of many people.

Chart with money behind it

Quality workers, quality work

For larger firms, quantity over quality is the end goal. They are focused on a multitude of clients and completing a lot of work at once. However, local accountants likely handpick their employees to ensure quality assurance. This, combined with less work, means more focus on your business’ needs.

Smaller firms may focus more on their hires as they need less employees – again, focusing on the quality over quantity. To be able to provide the best quality of work possible, it is important to have high quality employees willing to put in the work.

Go Local

While both local and corporate accounting firms can provide the services your company needs, there are many other details that you will only receive by choosing a local firm.

Looking for a local accounting firm based out of Long Island that will give your small business the attention it deserves? Look no further than Calabrese & Associates, CPA, P.C. We will ensure that your financial needs are fulfilled and have our full focus. Visit our website today to get started.

Payroll Tax Cut: What it Could Mean for Businesses

payroll tax cut President Trump has allegedly been urging for a payroll tax cut to be implemented. In today’s economic situation, it is important to fully understand any major decision made by the federal government. In this blog, we will cover what exactly this means and how this affects businesses going forward.

What is a Payroll Tax Cut?

This decision has had mixed reviews on whether it will help or hurt the economy in the long run. The most important step to take is to understand what a payroll tax cut would immediately do, both to benefit and to hurt those affected:

  1. There would be more money in workers’ paychecks – employees will notice more money in their paycheck, and programs such as Social Security and Medicare will not receive as much funding; however, this increase would be very gradual and not major.
  2. It creates a boost for businesses – since this tax cut reduces the amount paid by employers, there is more money for struggling businesses to stay afloat; however, COVID-19 is the reason most businesses have been struggling and it is still prevalent today, meaning eventually this money will run out.
  3. A reduction in federal revenue – when the payroll tax cut began in 2011, the government lost $112 billion, and $115 billion in 2012.
  4. Unemployment not affected – those that are unemployed will not receive any kind of benefit, as well as those that aren’t working on maternity leave and retirement; according to CNN, another stimulus payment would be more effective.

Fox Business estimated that with this implemented, the maximum amount of money that an average American could receive is $2,149.

dollar bill with three cubes one green arrow, one red arrow and a percent sign

What Will it Mean for Business?

Let’s delve a little deeper into the payroll tax cut’s effect on business. Of course, this is all still hypothetical, and it is unknown what would really happen in the event this was implemented.

However, the bigger picture shows that the real reason for the economy’s decline is the coronavirus pandemic. The pandemic jumpstarted months of economic insecurity as many lost their jobs or had to begin hybrid working situations where they either began to – and still do – work from home, or go in to the workplace some days and work at home other days.

So even with a payroll tax cut that likely wouldn’t last long, this just prolongs the life of some businesses that aren’t going to make it through an indeterminable amount of time of social distancing and forced closures. With no vaccine or promise of a return to the prior economy, the futures of some businesses are doomed whether there are tax cuts made or not.

person observing pie charts taking notes and using a calculator

Final Cut

Although there are many assumptions about what the payroll tax cut would do for employees and businesses alike, there is no guarantee until it is instated by President Trump.

For more information on payroll, taxes, or trending economic news, visit our website. Here at Calabrese CPA, we offer comprehensive financial services to suit your needs.

What is a Virtual CFO, and How can it Benefit your Business?

Virtual CFO

Now more than ever, businesses and startups are looking for new ways to cut costs while still maintaining the same level of production and success. From staff cuts to outsourcing, the options are seemingly endless. However, one method many New York-Metropolitan companies are exploring is the idea of a virtual CFO. What is a virtual CFO you ask, and how can they benefit your business? We have the answers.

What is a Virtual CFO: An Explanation

If you know what a regular CFO, short for Chief Financial Officer, does, then you pretty much know what a virtual CFO does. The primary difference being that this CFO is, well, virtual.

This important outsourced position covers a whole host of financial, accounting and monetary services. Some primary responsibilities that fall under the purview of a virtual CFO can include, but are not limited to:

  • Payroll services
  • Bookkeeping/write-up
  • Business consulting
  • Business entity selection
  • Buying or selling a business
  • Financial analysis
  • Tax planning and preparation
  • IRS representation

As a sounding board, coach and trusted source for financial services, a virtual CFO can be exactly what your business needs to reach that next level.

Person looking at a spreadsheet

The Business Benefits of Virtual CFO Services

A Remote Working Supplement

In on our current world of remote working, a virtual CFO can feel more natural than ever. With video conferencing apps like Zoom the norm, working with a virtual CFO will be a seamless transition. Not only that, but they can also help pick up some of the slack to get back to the pre-COVID-19 norm.

Industry Experience

When using virtual CFO services from a firm like Calabrese & Associates, you will benefit from years of multiple industry experience. By pairing with a virtual CFO who has worked with your industry, your business can enjoy multilayered insights from someone with relevant experience.

Digital handshake

Saving Money

Not only will a virtual CFO save your business money with their vast finance and accounting knowledge, they will also help you cut costs in other ways. First of all, they’re usually less expensive than an in-house CFO. Secondly, they don’t require any kinds of benefits or bonuses.

And besides, a virtual CFO like the ones at Calabrese & Associates will ensure that you’re receiving the highest quality services for your needs and budget. So, if you feel like a virtual CFO can be the difference maker for your business or startup, Calabrese can be the answer you’re looking for.