Catherine A. McLaughlin - Enrolled Agent, Accountant, Tax Prep

Catherine A. McLaughlin - Enrolled Agent, Accountant, Tax Prep BS Degree in Business/AccountingIRS Enrolled AgentAccredited Tax AdvisorI have provided comprehensive tax and accounting services since 1986 for small businesses and individuals.


By Karla Bowsher on February 22, 2017
Photo by William Potter /
What will you do with your tax refund?
If you’re like the average American who will receive a refund — and knows what they want to do with it — you will most likely put it in savings, according to a recent GOBankingRates survey.
The website polled 1,000 people about what they plan to do with their refunds. Survey participants had to choose one of the following seven options:
Pay off debt (loans, credit cards, etc.)
Splurge on a purchase (TV, shoes, etc.)
Put the money toward a vacation
Put the money in savings
Make a major purchase (car, home, etc.)
I do not receive a tax refund
None of the above
About half of survey participants do not receive a refund or selected “none of the above.” GOBankingRates explains of the latter, “These people might not have a clear plan for their IRS tax refunds, they aren’t sure they will get a refund this year or they have plans for the refunds that are not found in the other responses.”
GOBankingRates’ analysis focused on the first five options. Among survey respondents who expected to get a refund, putting the money in savings was the most common response.


Here’s Why You Owe the IRS So Much in Taxes This Year

Janna Herron
The Fiscal TimesFebruary 21, 2017

Many Americans cross their fingers at tax time, hoping for a huge refund from the federal government. At the very least, they want to break even. The vast majority of filers — more than 70 percent — do get money back from the government, with the average refund close to $3,000, according to the IRS. But every year, some taxpayers get a nasty surprise: They owe Uncle Sam hundreds or even thousands of dollars that they didn’t budget for.
How can that be?
Simply put, if you owe a large sum in taxes, it’s likely because you kept too much of your paycheck during the year and had too little withheld automatically. If you owe more than $1,000, you also have to pay a penalty to the IRS.
Related: The Best and Worst States for Taxes in 2017​​
This can come as a big shock to people who have had the same withholding as the year before, but didn’t end up owing money previously. “Any time you have a major life change such as getting married, having a child, retiring or starting a new job, you should re-evaluate your tax situation and update your withholding,” says Jackie Perlman, principal tax research analyst at The Tax Institute at H&R Block.
The three changes below could result in an unexpected tax hit.
Increasing income: Did you go from being a one-income family to a dual-income family? Did one spouse get a promotion, large raise or bonus? If your household income increased but you didn’t take any additional deductions or exemptions versus the prior year, that could make your tax withholding too low, says Lisa Lewis, CPA and TurboTax expert.
Related: 7 Common Tax Mistakes That Could Cost You Thousands
Fluctuating income: Similarly, if your income fluctuates throughout the year — either because you’re self-employed or you rely on investment income — maybe you didn’t realize exactly how much income you have coming in and didn’t withhold enough. In that case, “you should consider doing a quarterly check on your potential tax return to adjust withholdings or make estimated payments,” says Mark Steber, chief tax officer of Jackson Hewitt.
One-time event: It’s also possible that your tax liability was triggered by a unique event such as large capital gain from a property sale, says Perlman. That means you may not need to adjust your withholding. Instead consider paying estimated tax if you sell property or receive income from an unexpected source, Perlman says.
If you do need to change your tax withholding, figure out by how much. The IRS and other tax professionals offer an online W-4 withholding calculator to help determine your appropriate strategy.
Related: Scammers Have a New Trick to Get Your W-2 Form
Once you know that, request a Form W-4 from your employer to adjust your withholdings. Self-employed workers — who make quarterly estimated payments to the IRS — use Form 1040-ES. Retirees need to complete Form W-4P for pensions and annuities, Form W-4V for Social Security and railroad retirement or Form W-4 for military retirement. Return the form to the payer.
“If you are married and both you and your spouse work,” Perlman says, “you’ll get the best results if you coordinate with your spouse.”


I am an Enrolled Agent. This means I have taken an extensive tax exam given by the IRS. I am licensed to represent you before the IRS. I have taken continuing education courses to keep up to date with all the changes to tax laws.

Sometimes it happens.  Here's what you can do if you don't get your W2.
What to do if you don't get your W-2

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Taxes » Tax Filing » What To Do If You Don't Get Your W-2You're still waiting for your W-2. You know you're getting a refund and you want to file your return, but it's something you can't do until you ...


Do you have a tax problem? Have you been to afraid to file because you think you will owe more tax than you can pay? I can deal with the IRS on your behalf to get the best possible outcome. I'm on your side when you need help.


I am an IRS Enrolled Agent for many years now. As an Enrolled Agent, I an licensed to represent the public before the IRS. My license is in taxes and tax preparation. To be licensed, I had to pass a comprehensive exam strictly on tax law and have to take continuous education courses including ethics courses. I am licensed by the IRS not by the state as a CPA.


Do you have tax problems? Is the IRS or the state billing you for taxes you don't owe or can't pay? Don't ignore them. They won't go away. Your problem will just get worse until you do something about it. Call me for help. I have been dealing with clients tax issues for over 25 years. I will help you resolve the issue in the best way for you.

When should you start receiving Social Security retirement benefits?
How to Outsmart Social Security

When should you start receiving Social Security retirement benefits?

Most people start collecting benefits at the wrong time, whether from necessity or because they don't understand the system, a study suggests.


Good news for employees! The Social Security payroll tax cut is extended to the end of the year! The withholding rate will stay at 4.2%.


Will the 4.2% Social Security tax be extended to the rest of the year? A decision has to be made very soon. It's expected that the tax reduction will be extended along with another extension of Unemployment benefits.


Do you have a 401K plan at your workplace? In many plans, the employer matchs a percentage of your contribution. If you don't sign up for the plan, you are losing out on that contribution from your employer. You are turning down a raise!

What percentage of your income goes to pay your taxes? People often think that the rich don't pay taxes or pay very litt...
At 102%, His Tax Rate Takes the Cake

What percentage of your income goes to pay your taxes? People often think that the rich don't pay taxes or pay very little. Their high income disqualifies them from taking a lot of deductions. The tax code isn't necessarily fair to the rich either.

In submissions of tax burdens from readers, James Ross, founder and managing member of the investment firm Rossrock, was on a perch all his own.


Are you getting Social Security benefits? Up to 85% of your benefits can become taxable. The higher your other income, the greater will be the taxable portion of your Social Security benefits. This is especially a problem for those who work and receive benefits or those with significant investment income. I can help you pay the lowest tax possible when you receive Social Security benefits.


Did you get a notice from the government about your taxes? Call me! I can help resolve your problem. You don't have to deal with the stress.


Call me and make your appointment to have your taxes done by February 20th and get a 10% discount!


What medical deductions can you take? You can deduct any kind of prescription item. Prescribed drugs, prescribed medical equipment, test kits, eye glasses count. Over the counter drugs and vitamins don't. You can count YOUR COST of doctors, prescription drugs, tests, hospital bills and insurance. You must be able to itemize your deductions. You must deduct 7.5% of your Adjusted Gross Income from the total of your medical expenses to get your medical deduction.


Some taxpayers will have to wait until mid-February to efile their taxes this year. Changes in tax law created at the end of 2011 mean that the IRS is not yet geared up to accept some people.s returns yet. Generally, those who file using Schedule A, have higher education credits, or who claim the educator expense deduction are those who will have to wait.


After a long political battle, Congress has extended the Social Security payroll tax cut for another 2 months just in time for the New Year. Since it’s only extended for 2 months, the battle isn’t over yet. They still have to decide the rate for March and beyond. This was supposed to be a temporary action to give the American employee a bit extra in their pay to help them get through bad economic times. The employee rate is currently .042.


What does the Social Security payroll tax cut mean for you? You will have noticed that your paycheck has been a bit larger and will continue to be larger for awhile yet. But this benefit has to be funded. In the past, Social Security taxes paid for retirement benefits. It was a protected program with it’s own funding. Now it is exposed to the political process and that means that politics now plays a role in the Social Security benefits you will receive later.


This is the last week to apply for a PA Property Tax rebate for 2011.


Do you owe Estimated Tax? If your total withholding is less than 90% of the total tax due on the return or 100% of the tax due on the previous year's return, you should pay Estimated Tax quarterly to avoid a Late Payment penalty. Perhaps you had some unusual Capital Gain this year. Perhaps you started a business. I can help you figure out how much to pay and where to send your Estimated Tax.


Now is the time to do some end of the year tax planning. Do you realize that you can change your taxable income for this year by changing your deductions? You can pay medical expenses or mortgage payments early bringing those deductions into this year. You can made donations now instead of later. This can increase your Itemized Deductions significantly for 2011. It can make a real difference especially if you might not have enough deduction to get over a limit.


Do you know your Net Worth? This is a good time find out just how much you have. List the value of all of your assets and liabilities. Add them all up. What is the net figure? Now that your have the total picture, you can make decisions based on the current facts. Make sure your family knows where to find your list just in case.


Remember that if your income changes significantly during the year, you may have to change your withholding or the amounts you pay in estimated taxes. Call me if you have any questions if you're paying too much or too little. Don't wait to get surprised when your tax returns are prepared.


Does your child need to file a return? If a dependent child earns more than $950 in unearned income or $5700 in earned income, he/she will have to file a federal return. Also if total income exceeds $950 or $5400 in earned income plus $300 other income, a federal return must be filed. Even though your child doesn't need to file a federal return, they can still have to file a state or local return.


Did you know that you can get an additional credit on your 1040 for retirement contributions if your income is low enough? The credit can be up to 50% of your contribution to a 401K or IRA. This is in addition to the IRA or 401K deduction from income of your contribution. The government wants to encourage taxpayers to save for their retirement. This is a good way to plan for your future!




Ask me about the new program which allows you to get your refund in a Western Union Moneywise Prepaid MzsterCard. Your funds will be loaded onto your reloadable debit card and available in 7-10 days. You can use your card anywhere that Debit Mastercard is acepted including online and at ATMs. It's easy and convenient!


Coopersburg, PA


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