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Our contribution to the latest thinking and advice on various current accounting and financial topics.

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Werner & Co. in the Media: PA Taxes and Gov. Wolf’s Budget

March 25 2015

For the last few weeks we have been inundated with discussion of Gov. Wolf’s proposed budget legislation in the newspaper, on TV and social media. Gov. Wolf promises to rebuild the middle class in Pennsylvania with his “gimmick-free budget.” He plans to balance the state budget by cutting property taxes and increasing the sales tax and income tax rates.

Werner WFMZPennsylvania has not seen an income tax rate increase since 2004. Coincidentally, that was also when then Gov. Rendell proclaimed that casinos would be responsible for the largest property tax relief in Pennsylvania. Well, here we are a little over 12 years later, and property taxes in PA are back or above those 2004 levels.

We had the chance to discuss Gov. Wolf’s proposed plan with Channel 69 News Anchor Jaccii Farriss and why Pennsylvania is ranked in the top 10 for states that pay the highest taxes. You can view the TV interview here.

Here is the text of Ms. Farriss’s interview:

Tax time can really sting for folks who find themselves in the red, but when it comes down to who pays the most, you might be surprised.

Pennsylvania is in the top 10 for states that pay the highest taxes, according to a pair of new studies. According to a study done by MoneyRates.com, Pennsylvania ranked in the top 10 states with the highest per capita federal tax burden. Why? Pennsylvania has a larger population, with some of the nation’s highest earners.

In another study, Wallethub.com broke it down in terms of state taxes. The numbers stay pretty consistent with the federal figures, with one noteworthy item. Lower income Pennsylvanians pay a higher percentage of their income in taxes than other residents, nearly 12 percent, while middle income residents pay roughly 10 percent and higher income individuals pay around 9 percent.

Werner WFMZ2So how does this happen? “The reason our taxes are high, I believe, is because we live in the northeast. We expect a lot from our government, and things cost more here than they do in Alabama,” said Andrew Werner, a certified public accountant with Werner and Company in Allentown.

Werner said it’s simple economics. Because lower income residents have less money, they use a bigger percentage of it for taxes.

Pennsylvania Gov. Tom Wolf is trying to ease the tax burden on residents by cutting property taxes and offering $3.8 billion in relief, but at the same time, he is proposing to raise the sales tax.

While food, clothing and prescriptions would be exempt, Kristofer Depaolo, a certified public accountant, said the higher tax could be a hardship for lower income Pennsylvanians.

“Anything of necessity that you or I would spend out money on because their income is a lower, a greater percentage is spent on that compared to a high income earner,” said DePaolo.

A spokesperson for Wolf said the governor wants to ease the blow for some residents by raising the income tax exemption from $32,000 to $36,500 for a family  of four.

In case you were wondering, Pennsylvania is one of five northeast states to make the top 10 lists for taxes paid per capita.

Copyright 2015 WFMZ. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Tax Planning & Strategy

December 19 2014

Currently, our company sign on Hamilton Boulevard reads “Plan your 2014 taxes now”. The truth is, taxes aren’t going anywhere but up so the best thing you can do is learn your options and make a plan.Continue

A New Home for Werner & Co.

August 26 2014

Our renovation dust is soon to settle. We are pleased to announce a new office for the “accountants you like as much as you trust.”

Werner & Co. is moving to our historic new home on September 1st. It’s in Wescosville, on Hamilton Boulevard near Brookside Road. We’re so excited that we’ve already signed in! (see photo) We love this building. The architecture is interesting – a mid-19th Century church, in fact. We completely renovated it, and our architects (Bonsall Shafferman) designed a great interior.

We're moving soon. The handwriting is on the wall!

We’re moving soon. The handwriting is on the wall!

The building is historic, but also new. Even the signage treatment on the outside of the building is an interesting blend of old and new aesthetics. That echoes our own special blend of old school values and new school methods.

We expect our new office to serve our clients and ourselves (plus a tenant, Express Sign Outlet Inc) very well. We hope that you will enjoy it as much as we do. Come visit. Bring friends. Bring new clients! Tours depart hourly.

Look for an invitation to our Open House in a few weeks.

2014 Mileage Rates

June 25 2014

The Internal Revenue Service issued optional standard mileage rates used to calculate the deductible costs of operating automobiles, vans and trucks for business, charitable, medical or moving purposes.  The 2014 rates for business, medical and moving are down 0.5 cent per mile.

Business miles:$0.560
Medical miles:$0.235
Charitable miles:$0.140

A taxpayer may not use the standard mileage rate for a vehicle after using the Modified Accelerated Cost Recovery System (MACRS) depreciation method or after claiming Section 179 deduction on that vehicle.  In addition, the business standard mileage rate may not be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicles rather than using the standard mileage rate.   Actual costs would include gasoline, oil, repairs, insurance, maintenance and depreciation of the purchase cost.   Use of the standard mileage rate in the first year of business use is considered an election to exclude the vehicle from MACRS depreciation.

We recommend that you keep a daily log of the travel and expenses for each of your automobiles to document such income tax deductions.   The IRS tax forms ask if you have written records of your mileage and if you’re ever audited you can be sure the IRS examiners will ask the same.  If you would like more details and advise, please call us 610.770.9236 or send us a message info@wernercpa.net.

Five Great Reasons to E-File

February 15 2014

Are you still doing your taxes on paper? If so, join the 122 million taxpayers who e-filed last year. It’s fast, it’s easy and it’s free.

Here are five great reasons why you should e-file your tax return:

  • Accurate and complete. E-file is the best way to file an accurate and complete tax return.The tax software does the math for you, and it helps you avoid mistakes.
  • Safe and secure. IRS e-file meets strict guidelines and uses the best encryption technology. The IRS has safely and securely processed more than 1.2 billion e-filed individual tax returns since the program began.
  • Faster refunds. E-filing usually brings a faster refund because there is nothing to mail and your return is less likely to have errors, which take longer to process. The IRS issues most refunds in less than 21 days. The fastest way to get your refund is to combine e-file with direct deposit into your bank account.
  • Payment options. If you owe taxes, you can e-file early and set an automatic payment date anytime on or before the April 15 due date. You can pay by check or money order, or by debit or credit card. You can also transfer funds electronically from your bank account.
  • E-file’s easy. You can also use commercial tax software or have us e-file your return. We have been e-filing tax returns since 2006. We would be happy to sit down with you and discuss your tax circumstances and help save where possible.
TAX ADVICE DISCLAIMER: In accordance with IRS Circular 230, any tax advice included in this communication, including attachments, is not intended or written to be used, and cannot be used by you or any other person or entity, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions, nor may any such advice be used to promote, market or recommend to another party any transaction or matter addressed within this communication. If you would like such advice, please contact us.

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