Flexible spending accounts (FSAs) allow taxpayers to set aside pre-tax dollars to pay for out-of-pocket medical expenses. The drawback has been the fact that unused amounts each year are forfeited. Plans could provide a 2½ month grace period to use up unspent set-asides. Now a change announced by the IRS adds more flexibility to these accounts. Plans can be modified...
Tags: FSA rule change
Category: Taxes
Form 1099-K is a new information return sent to businesses by “payment settlement entities” reporting the amount of credit card and other electronic receipts that were processed for the business. The IRS also receives a copy of Form 1099-K and cross checks the reported amounts with the business’s total income reported on its tax return. Where the numbers don’t seem...
Tags: 1099 matching1099-K notices
Category: Taxes
Even if you’re not an investment expert, you’re probably familiar with the term “diversification.” It means not putting all your eggs in one basket. Diversification calls for choosing the right mix of investments to keep a balance between risk and return. Here are some general ideas to keep in mind. * Choose the right investment mix. While there is no...
Tags: investment risk
Category: Business
It’s the time of year when you may be scheduling employee reviews. Usually the annual employee performance review is dreaded by both supervisor and employee. The employee knows he’ll have to hear about those mistakes from months ago, and the supervisor will finally have to discuss those issues he’s been avoiding all year. Too often, the result is discomfort and...
Tags: employee reviews
Category: Business
This is a followup to an earlier article posted regarding this subject. Beginning in January 2014, the Internal Revenue Service will classify an automatic gratuity—the policy of adding an automatic tip to the bills of large parties of diners—as a service charge instead of a tip. The IRS regards service charges as regular wages, which must be reported for payroll...
Tags: Automatic Gratuities
Category: Taxes
Many of us are living close to our financial limit these days. We pay our bills on time, but there’s not a lot left over. But that’s a dangerous situation. If things go wrong, your financial situation can change very quickly from adequate to critical. Without a cash reserve, you could find yourself in serious trouble. Imagine this situation. You’re...
Tags: cash reserves
Category: Business
Early in the morning of October 17, President Obama signed a bill into law reopening the federal government and extending U.S. borrowing authority. But the law contains deadlines that could leave the country facing the same issues again. Here are the important dates in the law – * December 13, 2013 – Report required from Congressional budget negotiators on how...
Tags: government shutdown
Category: Taxes
It’s open enrollment time for Medicare recipients, allowing people to choose their health plan for 2014 until December 7, 2013. Dealing with the fine print of insurance coverage can be challenging, but it’s smart to look your current policies over carefully and compare what you have currently to other options that are available. An annual review could end up saving...
Tags: health care scams
Category: Taxes
Are you familiar with PEP and Pease? Though they sound like a pop duo, the terms refer to tax rules known as phase-outs that can impact how much federal income tax you owe. Phase-outs are reductions in the amount of deductions, credits, and other breaks you can claim on your tax return. Though generally based on adjusted gross income, phase-outs...
Tags: phase outs
Category: Taxes
As the population in the U.S. continues to age, more and more people will find themselves caring for their parents. Here are some of the tax breaks that caregivers should consider. * If you provide more than half of your parent’s support, you may be able to claim your parent as a dependent on your tax return. To be eligible,...
Tags: caregives elderly parents
Category: Taxes