Tax Articles

Have adult children? Take steps to avoid medical access denial

Imagine your college-aged daughter has an accident while away at school and ends up in the emergency room. When you call the hospital, you are denied information about her care because you do not have the proper forms signed. Under the Health Insurance Portability and Accountability Act (HIPAA), you do not have legal access to your child’s health information after they reach age 18, even if your child is still your dependent and their health insurance coverage is in your name. To avoid this administrative nightmare, take the following steps.

  1. Make sure your health insurance coverage will cover your child at his or her new campus home.
  2. Have your son or daughter sign a HIPAA authorization form allowing you access to their medical information. [Read more…]

Learn from the ‘best places to work’

Google, Facebook, and Southwest Airlines are among the top five companies on job search site Indeed’s “Best Places to Work 2017” list. You may not have the resources of these large companies, but you can incorporate some of their ideas into your company’s culture.

Respect. The best companies cultivate a culture of respect, according to a poll conducted by the Society for Human Resource Management. Employees say they feel valued by their leaders and their coworkers regardless of their background, ethnicity, religion, sexual orientation, or gender.

Opportunities for growth. Leaders at the best companies evaluate staff regularly and look for ways to challenge them in new areas.

[Read more…]

Your HSA as a retirement tool – the facts

Health Savings Accounts (HSAs) are a great way to pay for medical expenses, and since unused funds roll over from year to year, the account can also provide a source of retirement funds in addition to other plans like 401(k)s or IRAs. But be aware of how HSAs compare to other retirement investment tools.

  • HSAs work best when they are used to pay for qualified medical expenses. Neither your original contributions to an HSA nor your investment earnings are taxed when used this way.
  • There is no required minimum distribution after you reach age 70½, like there is with 401(k)s and IRAs. [Read more…]

Five home office deduction mistakes

Here are five common mistakes of those who deduct home office expenses.

  1. Not taking it. Some believe the home office deduction is too complicated, while others believe taking the deduction increases your chance of being audited.
  2. Not exclusive or regular. The space you use must be used exclusively and regularly for your business.
    • Exclusively: Your home office cannot be used for another purpose.
    • Regularly: It should be the primary place for conducting regular business activities, such as record-keeping and ordering. [Read more…]

Three actions to save for retirement

If you haven’t started saving for retirement or you haven’t saved enough, here are three actions you can take to put you in a better position during your golden years:

  1. Contribute as much as possible every year to a 401(k) pretax retirement plan, up to the $18,000 maximum, or $24,000 if you are age 50 or older.
  2. Contribute as much as possible to a Traditional or Roth IRA every year, up to the $5,500 maximum, or $6,500 if you are age 50 or older. [Read more…]

Reap the benefits of hiring your child for the summer

Hiring your children to work in your business can be a win-win situation for everyone. Your kids will earn money, gain real-life experience in the workplace, and learn what you do every day. And you will reap a few tax benefits in the process. The following guidelines will help you determine if the arrangement will work in your situation.

  • Make sure your child works a real job that he or she can reasonably handle, no matter how basic or simple. Consider tasks like office filing, packing orders, or customer service.
  • Treat your child like any other employee. Expect regular hours and appropriate behavior. If you are lenient with your child, you risk upsetting other employees. [Read more…]

Tax-free income

Yes, that’s correct, there are some forms of income you receive that may be tax-free. Here is a list of eight common sources of tax-free income.

  1. Gifts. Gifts you receive are not taxable income to you. In fact, they are not subject to gift tax to the person giving the gift as long as the gifts received in one year from one person do not exceed $14,000.
  2.  Rental income. If you rent your home or vacation cottage for up to 14 days, that rental income does not need to be reported. Homeowners often can earn some tax-free income by renting out a home while a large sporting event (Superbowl or a golf event) is in town. [Read more…]

Reasons to incorporate your business

Here are some reasons you may want to consider incorporating your growing business.

Protect your personal assets from creditors. When you operate your business within a corporation, creditors are often limited to corporate assets to satisfy a debt. Your home, savings, and retirement accounts are no longer fair game.

Provide a personal liability firewall. The corporate form can help protect you against claims made by others for injuries or losses arising from actions of your business. [Read more…]

4 tips to landing your dream home in a seller’s market

Here are some suggestions to landing your dream home in our current real estate market.

  1. Be nimble, be flexible. Try to investigate new listings quickly – within hours of their first posting, if possible. If you’re interested in a house but an inspection finds a few flaws, you may have to be flexible about accepting a house with a few quirks or in need of some repairs.
  2. Make a strong offer. A seller’s market isn’t a time to lowball your first offer on a house you want. If you’ve prepared and set your expectations below your minimum price range, you should be able to make a strong offer to ensure you are among the most attractive bidders. You shouldn’t wildly overpay, but making a strategic offer above the listing price may sweeten the deal enough to close quickly. [Read more…]

Keep your audit fears in check

Getting audited by the IRS is no fun. However, your chances of being audited are probably lower than you think. A look at the latest IRS statistics for 2016 reveals some interesting and reassuring facts about the risk of an IRS audit.

Audits are becoming less common. The number of individual tax returns the IRS audited fell to a 12-year low last year, to just above 1 million. Audits have been steeply declining over the last five years, which the IRS commissioner said was due in part to declining budgets and a smaller workforce.

Audits target the rich. It’s a fact: IRS audits target the super-rich. The statistical chance of being audited increases dramatically for people of higher income levels. [Read more…]

Tax deadlines for June

June 15

  • Second quarterly installment 2017 individual estimated tax due
  • Second quarterly installment 2017 estimated tax for calendar-year corporations due
  • Individual tax filing deadline for U.S. citizens living or serving in the military overseas

Everyone knows someone who missed the boat

This year’s April 18 tax deadline has come and gone, but not everyone has filed a 2016 tax return. While many have filed an extension and intend on getting their return in order, too many taxpayers who should file, simply do not. Common culprits are older, retired parents and young adults who are new to tax filing requirements.

Here are some of the reasons why it will help them to file a tax return.

Get withholdings. People who work but earn less than the required filing threshold should file a tax return so they can get back any withholdings their employer may have taken out of their paycheck. [Read more…]

What to do if you are selected for a correspondence audit

The IRS is now handling many routine audit reviews through form letters called correspondence audits. These letters come from the IRS and ask for clarification and justification of specific deductions on your tax return. Common issues that trigger a correspondence audit are large charitable deductions, withdrawals from retirement accounts and education savings plans, excess miscellaneous deductions, and small business expenses.

Don’t panic if you get one of these audit form letters. The IRS often uses computer programs to compare individual return deductions with the averages for a person’s income level or profession. If you’ve received a letter, you may have simply fallen outside the averages. As long as you respond promptly, thoroughly, and with good documentation, it won’t necessarily become a contentious issue. The key is to keep proper, well-organized documentation under the assumption you may need it to support your deductions. If you do this right, the correspondence audit will end with a “no change” letter from the IRS, acknowledging you’ve addressed their concerns. Give us a call if you receive one of these letters from the IRS. We’re here to help.

IRS is now using collection agencies

The IRS is now using outside collection agencies to collect unpaid tax obligations. This new program will start slowly with only a few hundred taxpayers receiving mailings. The number will grow into the thousands later in the spring and into summer. Taxpayers who are contacted will first receive several collection notices from the IRS before their accounts are turned over to the private collection agencies. The agency will then send its own letter to the taxpayer informing them that the IRS has transferred the account to the agency. These agencies are required to identify themselves as working with the IRS in all communications.

Unfortunately, a change like this can often lead to confusion among taxpayers, which gives scammers a new opportunity to steal taxpayer dollars. The IRS is aware of the potential fraud problems and plans to continue to help taxpayers avoid confusion. The IRS reminds taxpayers that private collection companies, like the IRS, will never approach taxpayers in a threatening way; pressure taxpayers for immediate payment; request credit card information; or request payments in gift cards, prepaid debit cards, or a wire transfer. A legitimate letter from a collection agency associated with the IRS will instruct taxpayers to write a check directly to the IRS.

Schedule your midyear tax planning session

Most people don’t include tax planning on their summertime agenda, but maybe they should. The problem with waiting until the end of the year is that you reduce the time for planning strategies to take effect. If you take the time now to schedule a midyear tax planning review, you’ll still have eight months for your actions to make a difference on your 2017 tax return. In addition, proposed tax reform could be cause for additional changes to your tax plan. Planning now for 2017 taxes not only helps reduce your tax burden, but it can help you gain control of your entire financial situation. Give us a call to set up an appointment today.

Tax deadlines for May

  • May 15 – Deadline for calendar-year exempt organizations to file 2016 information returns
  • May 31 – Deadline for IRA, SEP, SIMPLE, Roth IRA, MSA, and education savings account trustees to file annual statements (Form 5498) with the IRS, with copies to participants

2013 unclaimed tax refunds

The IRS announced that an estimated one million taxpayers who did not file an income tax return in 2013 could claim their share of $1 billion in unclaimed refunds for the 2013 tax year. The law gives most taxpayers a three-year time period to claim a tax refund. After that time, the money belongs to the U.S. Treasury. So if you did not file in 2013, to be safe, send your 2013 tax return via certified mail to arrive at the IRS by April 18.

Springtime remodeling – know the tax impacts

Spring fever often influences homeowners to update and remodel. Maybe you’re considering a new project, too. You may need to replace your deck or remodel your kitchen. If you have a remodeling project coming up, you should understand the tax consequences.

If your project qualifies as an improvement to your home, you’ll enjoy some tax benefits. But if the project is a repair, there’s generally no tax benefit. Unfortunately, it’s not always easy to tell the difference.

An improvement is defined by the IRS as something that adds value to your home or extends its life. Putting in a new kitchen, building an extension or adding a new deck are considered improvements because they add value. Replacing the roof is an improvement because it extends the life of your home. [Read more…]

IRS interest rates remain the same for second quarter 2017

Interest rates charged by the IRS on underpaid taxes and applied by the IRS on tax overpayments will remain the same for the second quarter of 2017 (April 1 through June 30). Therefore, the rates will be as follows for individuals and corporations:

For individuals:

  • 4% charged on underpayments; 4% paid on overpayments.

[Read more…]

Apply for an extension if you can’t file by April 18

Tax time can be stressful, but don’t panic if you can’t file your tax return on time. There’s still time to get an automatic six-month deadline extension.

There are four ways to obtain an extension:

  1. File a paper copy of Form 4868 with the IRS and enclose your payment of estimated tax due.
  2. File for an extension electronically using the IRS e-file system on your computer.
  3. Using Direct Pay, the Electronic Federal Tax Payment System, pay all or part of your estimated income tax due and indicate that the payment is for an extension.
  4. Have your tax preparer e-file for an extension on your behalf.

[Read more…]

What’s due on April 18?

Tuesday, April 18, is a major tax deadline. Here are some of the tax filing and related deadlines:

  • 2016 individual income tax returns.
  • Calendar-year 2016 C corporation income tax returns.
  • 2016 annual gift tax returns.
  • 2016 IRA contributions.
  • 2017 individual estimated tax first quarter installment.
  • 2013 individual tax return amendments unless the 2013 return had a filing extension.

Current tax law requires health insurance

During his first week in office, President Trump signed an executive order asking federal agencies to reduce the economic burden the Patient Protection and Affordable Care Act (ACA) puts on American citizens.

Unfortunately, this executive order is causing confusion. Many people are left wondering if fines will no longer be imposed or rules no longer need to be followed. Until the agencies impacted by this executive order publish their intent, act as though current laws are still in play. This includes: [Read more…]

More credits require questions

Common errors have helped to make the Earned Income Tax Credit (EIC) a major source of what the IRS calls “improper payments.” The agency estimates that of the $66 billion in EIC funds paid in 2015, nearly a quarter were collected by filers who didn’t qualify to receive them. To help combat this problem, the IRS now requires additional confirmation of information regarding the EIC and three new credits beginning in 2016.

Now if you claim the EIC, the Child Tax Credit (CTC), the Additional Child Tax Credit (ACTC), or the American Opportunity Tax Credit (AOTC), additional information may be requested of you.

For the CTC and ACTC, you may be asked how long your children lived with you over the past year, or whether they lived with an ex-spouse, relatives, or other guardian.

[Read more…]

2016 proof of health insurance: the Form 1095 wrinkle

Under the current Affordable Care Act (ACA), all Americans must have health insurance. If you receive your health insurance through the ACA marketplace or from your employer, you will receive a Form 1095. This form is used as documentation that you have adequate insurance and is used for other ACA reporting and potential tax benefits.

What’s happening now

Prior to filing your tax return you should receive your Form 1095 and review it for accuracy. If you receive your health insurance through a state or federal marketplace you will receive Form 1095-A. Otherwise your version of the form will be either Form 1095-B or Form 1095-C. Unfortunately, some providers of the “B and C” versions of Form 1095 are still having trouble issuing the forms on time. Because of this, the IRS has issued a notice backing off on this “receive the form before you file” requirement. While you will still need to prove you have adequate health insurance, the suppliers of the Form 1095-B and Form 1095-C were given until as late as March 2 to get the form out to you.

[Read more…]

Reminder: Partnership tax returns due one month earlier

Remember, partnership tax returns are now due on March 15. This is a month earlier than last year. The change is important to note, as filing the tax return late could result in unexpected penalties. The new due date now aligns filing Form 1065 with other flow-through entities like S corporation Form 1120S. If you get caught by surprise with this earlier filing date, contact us immediately.

Major tax deadlines for March

March 2

  • Large employers and others must furnish Form 1095-B or Form 1095-C to employees.

March 15

  • 2016 calendar-year S corporation Form 1120S income tax returns are due.
  • 2016 calendar-year partnerships Form 1065 income tax returns are due.

March 31

  • Forms 1095-B and 1095-C due to the IRS, if filing electronically. Employers who have 250 or more employees are required to file electronically.

A NH Real Estate Transfer Tax Primer

The following article by Attorney David Beliveau was published by the New Hampshire Bar Association.

Tax Law: Amended Last Year: A NH Real Estate Transfer Tax Primer

By:

The New Hampshire real estate transfer tax (NH RSA 78-B) – a tax on the transfer of New Hampshire real estate – is $0.75 per $100 of the full price of or consideration for the real estate for the purchaser and the seller (meaning half of the total tax is paid by the purchaser and half by the seller).

The tax, collected by the NH Department of Revenue Administration (DRA), requires filing DRA forms PA-34, Inventory of Property Transfer; CD-57-P, Declaration of Consideration Real Estate Purchaser (Grantee); and CD-57-S, Declaration of Consideration Real Estate Seller (Grantor). The law changed last year in the case of real estate transfers to revocable trusts and LLCs. [Read more…]

Can bartering be an effective business strategy?

Have you ever thought about bartering as a way to get the goods and services you need for your business? A growing number of businesses are finding ways to use the bartering system as a means to avoid using up their company’s cash.

A simple bartering arrangement involves two parties trading items of similar value. For example, let’s say your business owns a building located next to a telephone company. An internet service provider might be interested in storing its services in an unused portion of your basement. Instead of paying rent, they offer to provide you with a high-speed internet connection and website. [Read more…]

Making the most of your tax refund

If you are expecting a tax refund, you might consider investing your refund or using it to increase your financial security. While everyone’s needs are different, here are some optional uses of your refund that may work for you. [Read more…]

Time to plan for inflation-adjusted 2017 tax numbers

Each year, certain tax figures are adjusted for inflation. While most figures are unchanged versus 2016, there is more than a 7% increase to the maximum earnings subject to social security tax. Take note of these numbers to use in your 2017 planning. [Read more…]

Mark your calendar: Tax deadlines

February 28

  • Payers must file information returns (except certain Forms 1099-MISC with non-employee compensation payments in box 7, which are due before February 1) with the IRS. (Except for certain Forms 1099-MISC outlined earlier, the deadline is March 31 if filing electronically.)
  • Forms 1095-B and 1095-C due to the IRS, if filing on paper.

March 1

  • Farmers and fishermen who did not make 2016 estimated tax payments must file 2016 tax returns and pay taxes in full.

March 2

  • Large employers must furnish Form 1095-B and Form 1095-C to employees.

March 15

  • 2016 calendar-year S corporation Form 1120S income tax returns are due.
  • 2016 calendar-year partnerships Form 1065 income tax returns are due.

March 31

  • Forms 1095-B and 1095-C due to the IRS, if filing electronically. (Employers who have 250 or more employees are required to file electronically.)

Some federal income tax refunds may be temporarily delayed

In general, you can expect your federal refund to be issued approximately 21 days after your electronically filed tax return has been accepted. However, identity theft is still a major problem, and the IRS continues to implement new strategies to protect taxpayer data. For example, if you claim the Earned Income Tax Credit or Additional Child Tax Credit on your 2016 individual federal income tax return, your refund will be held until February 15.

Standard mileage rates go down for 2017

Have you noticed the price of gas? So has the IRS – and the reimbursement rate for business mileage has gone down as a result. The new rate for 2017 is 53.5¢ per mile, down from the 2016 rate of 54¢ per mile.

The rate for medical and moving mileage also decreased. Effective January 1, the standard rate is 17¢ per mile, down from last year’s 19¢. The charitable mileage rate remains 14¢.

2017 financial shape up: Small steps toward big goals

Shaping up your finances in 2017 may seem like a big goal, perhaps even too daunting. But if you take one small step at a time, these small steps will add up. Here are suggestions.

* Shift out of automatic. Have you established automatic bill pay at your bank or service provider, or automatic charges to your credit card?

Small step: Look for payments for goods or services you no longer use, such as recurring monthly subscriptions, and cancel them. [Read more…]

IRS extended the due date for Forms 1095

When you’re an applicable large employer (generally, when you employ 50 or more full-time workers and equivalents), you’re required to provide information about health coverage to the IRS and to your employees. The IRS extended the date on which two of these forms are due to your employees. Instead of being due January 31, Form 1095-B, Health Coverage, and Form 1095-C, Employer Provided Health Insurance Offer and Coverage,  are now due March 2, 2017. There is no change to the February 28, 2017, due date for filing paper forms with the IRS, nor the March 31, 2017, due date for filing electronically.

Note the new due dates for Forms W-2 and 1099

Did you spot the new due dates on the tax calendar? As you begin your January payroll preparation, take into account earlier due dates for two common information reporting forms.

Forms W-2 for 2016 are due January 31 for all copies. In the past, you had to provide Forms W-2 to your employees by January 31. Now the January 31 deadline also applies to copies submitted to the Social Security Administration.

The due date for filing all copies of 2016 Forms 1099-MISC with non-employee compensation in Box 7 is January 31, 2017. For these forms, the January 31 due date also applies to both paper and electronic filing.

Mark your calendar: First quarter 2017 tax deadlines

Tax return filing season has arrived, which means it’s time to mark your calendar for these 2017 tax deadlines.

  • January 17 – Due date for the fourth and final installment of 2016 estimated tax for individuals (unless you file your 2016 return and pay any balance due by January 31).
  • January 31 – Employers must furnish 2016 W-2 statements to employees, and send copies to the Social Security Administration (both paper and electronic).
  • January 31 – Payers must file all copies of 2016 Forms 1099-MISC with non-employee compensation in Box 7. For these forms, the January 31 due date applies to both paper and electronic filing.
  • January 31 – Employers must generally file 2016 federal unemployment tax returns and pay any tax due.
  • February 28 – Payers must file information returns (except certain Forms 1099-MISC) with the IRS. (Except for certain Forms 1099-MISC, March 31 is the deadline if filing electronically.)
  • March 1 – Farmers and fishermen who did not make 2016 estimated tax payments must file 2016 tax returns and pay taxes in full.
  • March 2 – Large employers must furnish Form 1095-B and Form 1095-C to employees.

Are you up-to-date on the tax rules affecting your 2016 return?

Here’s a quick review of some of the rules you can expect to encounter when you get ready to prepare your 2016 federal income tax return.

Income tax rates. For 2016, ordinary federal income tax rates range from 10% to 35% unless your taxable income exceeds $415,050 when you’re single or $466,950 if you’re married filing jointly. The rate on income above those amounts is 39.6%. [Read more…]

No change to nanny tax threshold

The social security coverage threshold for domestic employees, including nannies, will remain at $2,000 for 2017, the same as the 2016 threshold. If your household workers earn less than $2,000, you do not have to pay social security or Medicare taxes on wages paid to those employees. When you pay your household employees more than the threshold, you’re required to pay social security tax of 6.2% and Medicare tax of 1.45%. The $2,000 threshold applies separately to each employee.

Check your basis in your S corporation before the end of the year

Losses can be hard to take – so if you think your S corporation will show a loss for 2016, now’s the time to plan to make sure you’ll get the full tax benefit.

The problem. The amount of the business loss you can deduct on your individual income tax return is limited to your basis in your S corporation stock and certain corporate debt. This is true even if the loss reported to you on Schedule K-1 is greater than your basis. [Read more…]

Be prepared for a higher social security wage base in 2017

For 2017, the wage base for withholding social security tax from wages has increased to $127,200, up from $118,500 in 2016. The “wage base” is the amount of wages on which employers and employees must pay the 6.2% social security tax. The increased wage base means an additional $8,700 of your income is taxed.

The wage base does not affect the 1.45% Medicare payroll tax. Medicare tax is assessed on all wages and net income from self-employment, including amounts above the base. The 0.9% Additional Medicare Tax is not affected either. That tax applies to your compensation in excess of $250,000 when you’re married filing jointly ($200,000 when you’re single). [Read more…]

Tax reminders

  • December 15 – Due date for calendar-year corporations to pay the last installment of 2016 estimated income tax.
  • December 31 – Deadline to complete 2016 tax-free gifts of up to $14,000 per recipient.
  • December 31 – Deadline for paying expenses you want to be able to deduct on your 2016 income tax return.

Time to renew Individual Taxpayer Identification Numbers

Individual Taxpayer Identification Numbers (ITINs) are nine-digit numbers issued by the IRS so certain taxpayers who do not have a social security number can file a tax return. According to the IRS, approximately 11 million people have received an ITIN. Now, some of these numbers may need to be renewed. ITINs that have not been used on a federal income tax return for three consecutive years will expire on December 31 of the third consecutive year. Under current rules, ITINs not used on a tax return during 2013, 2014, or 2015, will expire on December 31, 2016. In addition, ITINs issued before 2008 will expire on December 31, 2016, even if they have been used on a tax return.

Stay ahead of the deadline for 2016 required minimum distributions

If you’re over 70½ and are required to take distributions from your IRA or other retirement account, remember that you must take your 2016 required minimum distribution by December 31. Due to year-end holidays and transfer time constraints, getting the process started now can avoid a last-minute rush, as well as a steep penalty of 50% of the amount not taken.

If this year’s distribution is your first, you have a one-time option of waiting until the beginning of April 2017 to start taking withdrawals. Just remember, waiting means you’ll have two taxable distributions next year.

Can your business survive these seven potential disasters?

Disasters, natural or otherwise, could ultimately lead to your company’s demise. Fortunately, advance planning can keep you on track. Here are seven scenarios to be prepared for. [Read more…]

Insurance enrollment begins this month

Beginning this month, you can sign up for a new 2017 health insurance policy on the health insurance Marketplace. You can also change or renew the policy you purchased during the last enrollment period. Even if your current policy has an automatic renewal feature, you’ll want to verify that you’re getting the best deal, and that you are still eligible for the federal premium tax credit.

What if you didn’t sign up last winter and didn’t have health insurance coverage in 2016? You may owe a penalty on your 2016 federal income tax return. The penalty is calculated in one of two ways: as a percentage of your income, or on a per-person basis. You pay whichever is higher.

For 2016, the penalty is 2.5% of your annual household income, up to a maximum of the national average premium for a Bronze plan. The per-person penalty is $695 per adult and $347.50 per child under 18 (up to a maximum per-family penalty of $2,085).

Save yourself some stress. Start your year-end tax review now

An important part of our service to you is to help identify actions you can take before year-end to minimize your personal 2016 federal income tax bill. Accelerating or delaying income and deductions, contributing to retirement plans, and taking investment losses are just a few of the strategies you might want to consider. Here’s a checklist to help you get started.

  • Max out your 401(k) before year-end. For 2016, you can set aside $18,000 if you’re under age 50. If you’re 50 or older, you can contribute $24,000.
  • Get your investment planning in order. Year-end sell decisions, either to rebalance your portfolio at the lowest tax cost or to offset gains and losses, are only one aspect of investment planning. Another is keeping good records for the reinvested dividends of stocks you sell in 2016. Reinvested dividends add to your cost basis and reduce taxable gain or increase the deductible loss on the sale. Finally, consider the wash sale rule. This rule disallows a current-year loss when you purchase substantially identical securities within a 61-day period. If you plan to sell stocks to secure a loss, and intend to buy the stock back, don’t wait until the last moment.
  • Make gifts before year-end. The use-it-or-lose-it tax-free gifting allowance is $14,000 per donee for 2016. Remember, gifts to individuals are not tax-deductible.
  • Contribute to your Health Savings Account. Within limits, contributions are tax-deductible and can be used tax-free to pay unreimbursed medical expenses.
  • Keep an eye on the “kiddie tax.” This tax on your dependent child’s unearned income in excess of certain limits applies when your child is under age 19 (under age 24 if a full-time student).

 

Smart financial decisions are simple, but not easy

Seeing purchases your friends post on social media can leave you envious – and might also foster a desire to buy a similar item. That can be a problem if your goal is long-term financial freedom, because spending money on items you may not need can derail your plans. Three simple habits can help you stay on track. [Read more…]

New procedure for 60-day rollover errors

Did you inadvertently miss the 60-day time limit for making an IRA or retirement plan rollover? You may be able to avoid taxes and possible penalties by notifying your account trustee with a “self-certification.”

When you take a distribution from your IRA or qualified plan with the intention of depositing it, or “rolling it over,” into another IRA or qualified plan, the 60-day rule says you’re required to complete the rollover within 60 days of receiving the distribution. In the past, when you missed the deadline, you generally had to request relief from the IRS. That meant paying a fee and going through a process to obtain a written statement waiving the rule. [Read more…]

Plan ahead for year-end business tax savings

As the end of the year approaches, turn your attention to ways you can reduce your 2016 tax liability. Here are suggestions. [Read more…]