Tax Tips for EMT Professionals
Nobody likes paying taxes. But, unfortunately there is no way of getting around them. While this year’s tax season has already sailed, it is always beneficial to be prepared for the upcoming one. When it comes to taxes, based on your profession and income, your taxes can vary. This is especially true for EMTs and Paramedics. While one Pennsylvania municipality is looking to pass a bill that waives local income tax for EMS volunteers, it doesn’t seem like it will happen anytime soon, which is why below you’ll find some of the most important tax information for EMT’s and Paramedics for the next year’s tax season. You’ll be glad you are prepared.
Yes, you read right. EMTs and Paramedics are just a few professional personnel that qualify for an income tax deduction. Deductions come in many different forms, but just a few of the tax deductibles can occur through unreimbursed employee expenses, continuing education, and mileage. To begin with, unreimbursed employee expenses can include things like medical tools, safety equipment, uniforms, shoes, and the cleaning of the uniforms. All items need to be in an itemized list. Next, there is continuing education, which is always beneficial. Many states require EMT’s and Paramedics to have additional training or others in the field simply decide to pursue additional education in the area. Regardless, tuition and books and other fees are sometimes deductible. Lastly, some EMS services require the EMT to use his or her own private vehicle. If this is the case, the mileage can be deductible.
Things to Consider
When preparing your taxes, the best thing that you can do for your taxes is to be as organized as possible. This means keeping all your itemized receipts together, keeping track of your on-the-job expenses, and filling out any necessary forms. The forms that most EMTs fill out are F-1099 and your W-2 Form. Other forms include 1040, Schedule A, and Schedule B. These forms each pertain to deductions, itemized information, and any interest and dividends that you’ve earned on the job. Lastly, the final thing that you should put into consideration when filing your taxes is to start the task ahead of the game. The worst thing that most workers do is to begin filing their taxes late, causing a crunch on time, stress, and even mistakes.
Sometimes, if you are lucky, there may be a local service in your area that does your taxes for free as a sign of appreciation for the job that you do. For example, EMT’s in Ocean Springs Mississippi can take advantage of their Liberty Tax Service. Liberty Tax has offered to prepare the tax returns for free of charge for first time customers. It is worthwhile to check if you have such a resource in your area and if so, take advantage of it. It’ll make the entire tax process much easier and far less stressful than it needs to be. Overall, a career in emergency medical services is a great thing. It is a job that people happily do and the reward is endless. Just keep in mind that the job takes dedication, but it is a type of dedication that has a great moral return.
BC’s HST to PST Conversion
In British Columbia, the Provincial Sales Tax (PST) and the Goods and Services Tax (GST) were combined together to create the Harmonized Sales Tax (HST). The goal was to increase the overall revenue of the area by around 3 million dollars. The HST ended up being around 13%, due to the fact that the PST was 8% and the GST was 5%. Many people who were under this tax opposed it because it would make it harder for families who had low incomes and incomes in the middle to make ends meet, despite the tax credit of $1000 that was designed to help ease the transition.
Why Did the HST Fail?
The HST failed for the same reasons why tax systems tend to fail. The first is because it was implemented too quickly. When a tax change happens too fast, there is a huge chance that there will be technical and legal issues. This will increase resistance to the tax and make it less likely to be supported by voters. The second reasons why a tax system would fail is if it will get rid of too many exemptions. People who do not make a ton of money will be accustomed to the tax exemptions that they receive. Should a new tax system get rid of those exemptions, then those who are hurt by the transition will be less likely to support it and more likely to try to have it dismantled.
When Will the Change be Made to Go Back to the PST?
Although no specific date has yet been set for this change to be made, an Independent Panel Report states that the overall process will take about eighteen months. A plan is being developed by the provincial government that will allow for this process to take place.
First, a letter conveying a referendum regarding the HST will be sent from the provincial finance minister to the federal finance minister. Next, the federal government will assist the provincial government in creating all of the necessary rules and guidelines that will be put into place. The third step is for a plan to be determined for the funds that were provided under the Comprehensive Integrated Tax Coordination Agreement to help the provincial government transition to the HST to be returned. The fourth step is for all of the different rules and guidelines to be implemented slowly so that the economy can take time to adjust to the new taxes. A system for reporting needs to be created so that any information that is gathered can be organized and analyzed to make sure that the transition is going as planned. Computer systems, billing and auditing processes, and the assessment and appeals process will be developed to accommodate the new tax and make sure that it is able to be implemented without issue.
Why Can’t it Happen Immediately?
If the PST were to replace the HST immediately, none of the different computer systems in the area would be able to process the new payments, the tax credit system would be thrown into chaos, and there would be a very confusing time with regards to government collection that would be impossible to avoid. To keep this from happening, the government is planning to register 100,000 businesses as tax collectors before the PST is even reimplemented. Taking additional time will also allow businesses to set up their machines that are used to process sales so that they charge the correct amount of tax. The time will also allow both collecting procedures and transitional guidelines to be edited so that they are as effective as possible and will be able to accommodate any problems that crop up.
Will the HST be in Place Until the Change is Made?
The HST will be in place until the PST and the GST are returned. This is because it is necessary for the government to continue to collect revenue so that it is able to continue to function. This is important because, without the revenue, the government will not be able to provide its usual services. The HST will not be reduced throughout the transition process in order to keep things simple.
Will the HST Credits be in Place Until the Change is Made?
Yes. Until the PST goes fully into effect, there will be no PST credits. In order to ensure that those who depend on credits are able to stay financially solvent, the HST tax credits will remain functional. This should keep the transitional period easy and as stress-free. Once the PST has been put into place, the credits will transition to the agreed upon PST credits.
The fact that a referendum was voted on by the people shows that they are in favor of this change from HST to PST. As a result, the change will be supported and is likely to please many.
PHOTO CREDITS: Corey Burger
Sales Tax 101 for Small Business Owners and Entrepreneurs
If you’ve never run a retail or service business, you may wonder how sales tax works on the proprietor’s side of things. The tax money that businesses collect has no way of going straight to the government when a customer makes a purchase, and businesses are able to use the sales tax money they collect for their own needs in the short term. However, the government does require that a store, restaurant or other type of sales business, document and pay the sales taxes it collects on a regular basis. If the business owner fails to pay the taxes on time, the IRS has the right to seize the business in an attempt to collect the taxes owed. Separating Sales Tax from the Business’s Income during the course of everyday business, most business owners don’t separate out the money collected on the items or services they sell and the taxes they collect. Instead, most businesses use software that calculates and tracks sales tax collected versus actual income collected. Some very small businesses may skip the software and calculate taxes and revenue by hand, but this is a tedious task that can easily lead to errors as well as excessive paperwork.
Using Tax Funds for Operating Expenses
Because businesses pay taxes on a periodic basis rather than daily, business owners actually have that tax money available temporarily for their own use. It is up to you whether you want to set the money aside that your business has collected in sales taxes or if you prefer to use it as part of your operating capital and deal with the tax bill when it comes due.
Deciding How Frequently to Report and Pay
As a business entity, you may have the option to pay the IRS for the sales taxes you bring in on a monthly, quarterly or yearly basis, or the IRS may designate for you how frequently your business must pay. You also have the option to prepay your sales taxes, in which case you estimate how much you your business expects to collect in sales tax revenue. Knowing the ins and outs of your business’s finances may help you decide how frequently to pay. Restaurants and retail stores that do a lot of business during the holiday season may elect to pay yearly at the beginning of January because they know they’ll have the greatest amount of cash reserves at this time. New businesses without a lot of capital may elect to pay monthly so that they avoid receiving a bill they can’t afford.
Getting an Extension if You Can’t Pay on Time
In order to get an extension on paying your business’s sales tax when it is due, you must file and request an extension. If the IRS believes that you have good cause to request an extension, they will grant it, and you will have an additional month to pay, but you will have to pay interest on the amount owed during the time it remains unpaid. If the IRS denies your extension request, you must pay the taxes due immediately, and you may have penalties, fees and interest to pay as well.
Understanding the Penalties for Late Payment or Nonpayment of Sales Taxes
If you pay late or don’t pay at all, the IRS has the right to and most likely will charge you additional fees for not paying on time. Fees are typically a percentage of the amount owed. If you don’t pay at all, the IRS can take your business’s assets or seize your business’s bank account in an attempt to collect the debt your business owes the government.
The Basics of Sales and Income Tax
Sales and income taxes can be fairly difficult to understand. This is a simple explanation of how sales and income tax works.
The Marketplace Fairness Act of 2013 (MFA), on the off chance that it passes, may make it less demanding for states to oblige retailers to gather taxes on remote sales.
Our income tax framework is by and large depicted as a progressive, minimal rate framework. This implies that as we procure more income, we pay higher rates of tax on that income. At a later point, unfortunately, there are all the extra regulations to deal with.
For nearly 100 years, Americans have been paying elected income taxes. In exchange, the state has protected our way of life, assembled interstates, safeguarded our assets and financed projects that have helped all Americans. Over those same years, the income tax law itself and the tenets encompassing the law have gotten colossal, unpredictable and confounding. Numerous have observed that expert income tax guides and tax projects are key for planning tax returns and simply managing all the monetary issues connected with income taxes.
Your manager withholds elected income taxes from your paychecks and advances those bits to the administration. This is reflected in the Form W-2 alongside your income and Social Security. The measure of income tax they withhold is focused around the W-4 Form, on which you distinguish the amount of “exclusions” you guarantee. The bigger the amount, the less they withhold.
A few people additionally wind up paying in quarterly evaluated income tax installments in the event that they think their withholding won’t be sufficient. There could be interest and consequences if the aggregate of your withholding and assessed installments are excessively little.
You then contrast your income tax obligation and the aggregate installments you have officially paid and the distinction is the thing that you owe or the measure of discount you ought to accept.
PHOTO CREDITS: Tax - 401(K) 2012 flickr
5 Ways to Get the Most Out of your Tax Return
Tax season can be a stressful time of year. However, if you play your cards right, it could be a time for celebration. There are many steps you can take to get the most out of your tax return, from withholding more money on each one of your paychecks to deducting charitable donations. Regardless of your income level, there are always ways to increase your tax refund.
1. Take advantage of professional expenses
You may occasionally need to pay out of your own pocket for certain things that are work-related. For example, maybe you subscribe to a magazine that helps advance your skill set. This would be considered a work-related expense that can be deducted from your taxes. Other professional expenses could include a portion of your phone bill if you are making work-related calls, transportation expenses when attending work-related events, and office supply and/or computer purchases that you need to make in order to do your job. If you want to deduct professional expenses from your taxes, make sure to keep track of all receipts.
2. Withhold higher amounts from your paycheck
By changing the number of exemptions that you claim on your W-4 tax form, you can withhold more money from each one of your paychecks. While this means that each paycheck will be smaller, it also means that there is less of a chance that you will have to pay taxes in April. In fact, by withholding higher amounts from each paycheck, you are likely to see a refund when April 15th rolls around.
3. Deduct charitable donations
Any donation you make to a legitimate non-profit organization is eligible for a deduction. A legitimate non-profit organization is one that has official 501(c)(3) tax status. Most non-profits will disclose this information on their website or in other promotional materials. Remember to always ask for a receipt when making a donation to a non-profit organization.
4. Put more money into your retirement fund
Many accountants recommend increasing your contributions to your retirement fund as a way to reduce your tax burden. This is sound advice. You get to keep the money (you just can’t spend it right away), and you have a smaller tax bill, or in some cases, a refund. The best way to do this is by opening and funding an Individual Retirement Account (IRA). To do so, you can consult a tax professional or an accountant, who can advise you on contribution amounts and different deadlines.
5. Start a side business at home
While many people worry that self-employment can lead to a more complicated tax filing process, starting a small side business at home can greatly increase opportunities for deductions. In this case, phone, computer, and other home office expenses, are all deductible. A side business at home allows you to increase your overall income while lowering your tax bill.
There are many more ways to get the most out of your tax return, but it’s important to note that you should take precautions when trying to maximize your refund. It’s always a good idea to consult a tax professional in order to review all of your options. Also, remember to document all relevant expenses and store your receipts. While you may not need them for the tax return itself, you will need to present them if you are ever audited.
PHOTO CREDITS: Tax - 401(K) 2012 flickr