With only two weeks left, Long Island tax preparers are busier than normal with year-end tax planning because of the tax-cut package President Barack Obama signed into law Friday.
Joseph Perry, partner in charge of tax services for Melville-based accountants Marcum Llp, said earlier uncertainty over the tax legislation made it tricky to advise clients on deferring income or estate planning.
Now, he said, "we're going to be revisiting our plans with our clients to make sure we advised them correctly to take advantage of the rates continuing to be as low as they were in prior years." He's been taking additional meetings and said employees may have to forgo planned time off before the end of the year.
Craig Ferrantino, president of Melville-based financial advisers Craig James Financial Services Llc, said time is running out for certain actions. Converting a traditional IRA to a Roth IRA, for example, he said, has to be done by Dec. 31.
Kathy Pickering, executive director of The Tax Institute at H&R Block, said some are concerned that it will take time for the Internal Revenue Service to update its systems to reflect the extension of the tax cuts. She said the IRS may end up delaying the date it begins accepting e-filed returns, Jan. 14, or those who file before the systems are updated may have to file an amendment later to receive a credit or deduction.
As the IRS issued new income-tax withholding tables Friday, local payroll processors said they could make adjustments before the first January paychecks go out. The amount of Social Security tax taken out will drop from 6.2 percent to 4.2 percent of wages paid.
The schedules were released about a month later than normal. The IRS advised employers to use the new tables and update the Social Security withholding "as soon as possible" or by Jan. 31.
"They put us under some pressure, but nothing that's not manageable," said Alan Klein, president of Ace Payroll in Melville, referring to the government. Klein owns two companies that together process payrolls for 3,000 companies nationwide.