Page 110 - issue
P. 110
year. been paid in full. This is done with a apply it.
form MW507.) Q: Can everyone do this?
Wait! There’s more: You can also A: Homeowners have to pay their
Let me address some of your ques-
double your state taxes every year. Let’s tions: mortgage each month and prepaying
does not work for several reasons.
say you decide to bunch in 2016. A per- Q: Is this legal? Therefore, this strategy generally works
A: Yes. You are allowed to give char- only for people not paying a mortgage.
son earning $55,000 would owe ity whenever you feel like it. And the
government has penalties for paying Q: Aren’t you losing investment
$3,908 in Maryland state taxes. At the taxes late, but paying taxes early is cer- income by paying taxes early?
tainly legal.
end of December 2016, she pays an Q: Does this mean I will give no A: That is a valid point with regard
charity in for 2017? That does not feel to state taxes. But realize that your
extra $4,000 in charity, pays the $3,908 right. early payment of $4,000 is earning a
A: You can give money to organiza- return on investment of 50% per
state taxes, and mails the State of tions at the end of 2016 with instruc- annum tax-free on a sure bet.
tions. For example, you could give
Maryland a check for an additional Ahavas Yisrael $1,000 and request that Q: What else can you prepay?
it be allocated to various causes in A: I have seen people prepay real
$3,908 – for 2017 income taxes. This 2017: e.g., 500 for (matanos la’evyonim estate taxes a year early. In addition,
and 500 for maos chitim, etc.). In addi- using this strategy for medical expens-
may be done with a simple coupon that tion, you can purchase Agudah scrip at es can offer profound savings due to
the end of year one and distribute it in the high “floor” for medical expenses.
is used for people who make estimated year two. (The math is too complicated for this
Q: How does the state know what to article.)
tax payments. do with my money when I mail them Conclusion: Even in a seemingly
this big check? simple situation, there is much to do to
Now we have a whole new picture: A: You send the check with form reduce your tax liability.◆
502D 2017. This tells them how to
For 2016, Miss Nurse will claim deduc- Eli Pollock CPA can be reached at
elipollock2@yahoo.com
tions of
$3,908+$3,908+$4,000+$4,000, which
equals $15,816. The following year, she
will simply take the standard deduc-
tion. This will save her over $1,500
every other year, or $750 per year. A
married couple earning $100,000 can
save over $1,200 per year playing this
game. (Note: When you prepay your
income taxes, you need to tell your
employer to stop withholding income
taxes, since the taxes will have already
Professional piano teacher ©WWW
available to come to
your home.
Experienced, references,
flexible summer hours.
Call Mrs. Hirshowitz
443-544-7770.
First Lesson Free
106 u www.wherewhatwhen.com u
form MW507.) Q: Can everyone do this?
Wait! There’s more: You can also A: Homeowners have to pay their
Let me address some of your ques-
double your state taxes every year. Let’s tions: mortgage each month and prepaying
does not work for several reasons.
say you decide to bunch in 2016. A per- Q: Is this legal? Therefore, this strategy generally works
A: Yes. You are allowed to give char- only for people not paying a mortgage.
son earning $55,000 would owe ity whenever you feel like it. And the
government has penalties for paying Q: Aren’t you losing investment
$3,908 in Maryland state taxes. At the taxes late, but paying taxes early is cer- income by paying taxes early?
tainly legal.
end of December 2016, she pays an Q: Does this mean I will give no A: That is a valid point with regard
charity in for 2017? That does not feel to state taxes. But realize that your
extra $4,000 in charity, pays the $3,908 right. early payment of $4,000 is earning a
A: You can give money to organiza- return on investment of 50% per
state taxes, and mails the State of tions at the end of 2016 with instruc- annum tax-free on a sure bet.
tions. For example, you could give
Maryland a check for an additional Ahavas Yisrael $1,000 and request that Q: What else can you prepay?
it be allocated to various causes in A: I have seen people prepay real
$3,908 – for 2017 income taxes. This 2017: e.g., 500 for (matanos la’evyonim estate taxes a year early. In addition,
and 500 for maos chitim, etc.). In addi- using this strategy for medical expens-
may be done with a simple coupon that tion, you can purchase Agudah scrip at es can offer profound savings due to
the end of year one and distribute it in the high “floor” for medical expenses.
is used for people who make estimated year two. (The math is too complicated for this
Q: How does the state know what to article.)
tax payments. do with my money when I mail them Conclusion: Even in a seemingly
this big check? simple situation, there is much to do to
Now we have a whole new picture: A: You send the check with form reduce your tax liability.◆
502D 2017. This tells them how to
For 2016, Miss Nurse will claim deduc- Eli Pollock CPA can be reached at
elipollock2@yahoo.com
tions of
$3,908+$3,908+$4,000+$4,000, which
equals $15,816. The following year, she
will simply take the standard deduc-
tion. This will save her over $1,500
every other year, or $750 per year. A
married couple earning $100,000 can
save over $1,200 per year playing this
game. (Note: When you prepay your
income taxes, you need to tell your
employer to stop withholding income
taxes, since the taxes will have already
Professional piano teacher ©WWW
available to come to
your home.
Experienced, references,
flexible summer hours.
Call Mrs. Hirshowitz
443-544-7770.
First Lesson Free
106 u www.wherewhatwhen.com u
