Episode 12 covered the nebulous topic of taxes. While it may not be the most exciting topic to discuss, it’s necessary to understand how the decisions we make throughout the year affect us come April 15th (or, actually April 18th this year!). If you’d like to hear the full podcast, give it a listen on iTunes or Soundcloud.

Athletic trainers are well known for working abundant hours with nominal pay, so why not find out how to secure a few advantages and breaks to leave a few more dollars in your pocket? 

We had tax professional Kim Mellinger – Chang of Navarro Mellinger Tax Solutions share with us the nuances of W2 vs. 1099, deductions, and new health care requirements. Here’s some quick take away tips:

• What are taxes and why do we pay them?
  • Taxes help pay for all of our public luxuries, including roads, schools, our president, and the military. They are required as American citizens for our freedoms.
  • They are a “pay as you go” structure, because public projects could not wait for all their funding to simply show up once a year. This is why taxes are taken out of each paycheck or required to be sent in each quarter.
• What is an Enrolled Agent?
  • An enrolled agent or EA works for the Department of Justice. They differ from a CPA in that they focus solely on taxes, whereas a CPA is an accountant whose sole focus is not taxes. EA’s can represent you in front of the IRS if you were to ever get audited or need to explain yourself on taxes.
  • It is recommended to use a professional to file your taxes (as opposed to an online software) because previous taxes are used to qualify us for major life decisions, such as buying a home.
• What’s the difference between a W2 & 1099 in regards to taxes?
  • A W2 employee has taxes automatically withdrawn from their paycheck, with half the taxes paid by the employee and the half paid by the employer.
  • A 1099 independent contractor does not have taxes taken out of their check, but instead is responsible for making quarterly estimated taxes.
  • A W2 employee is much more restricted in what they can write off as deductions since they are not self employed.
  • A 1099 independent contractor is self employed and therefore able to write off more deductions, sometimes lowering their overall tax liability to less than an W2 employee.
• What is required for health insurance?
  • Every American is required to carry health insurance all year long. There is a penalty inflicted if you have a gap in insurance, which is typically higher than the cost of insurance.
  • Everyone should receive a form from their employer or health care provider stating the time they carried health insurance for the 2015 year. This is a required form for filing taxes this year

If you’re looking for answers to specific questions or need clarification on any tax related issues, contact an Enrolled Agent near your or reach out to Kim. They conduct business across states and do not require you to be in person for services.

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