You may be familiar with the old tax rule that let you take an itemized deduction for unreimbursed medical expenses that exceeded 7½% of your adjusted gross income. For 2013 and future years, the income threshold increases to 10% for taxpayers under age 65. Those 65 and older may continue to use the 7½% threshold through the year 2016. Please...
Tags: medical expenses
Category: Taxes
The death of a spouse can be a devastating experience, both emotionally and financially. As the survivor, you’ll have to make important decisions while you’re in what could be the most vulnerable and distracted stage of your life. The suggestions that follow might at least help ease your financial stress. * Don’t make major decisions right away. Put off selling...
Tags: Death Spouse
Category: Taxes
Every week reporters publish stories about companies that have lost thousands, even millions of dollars because of fraud. They recount the dreadful details of business owners who learned – too late – that a lack of basic controls left their companies vulnerable to pilferage, embezzlement, and other types of misappropriation. How do these lessons apply to small businesses? After all,...
Tags: Internal Controls
Category: AccountingBusiness
The IRS has issued a warning about the latest phone scam. The caller claims to be from the IRS and tells the intended victims they owe taxes which must be paid immediately with a pre-paid debit card or wire transfer. Individuals who don’t pay up are threatened with arrest or loss of their business or driver’s license. Watch for these...
Tags: New Tax Scam
Category: Taxes
Small businesses may be missing out on an important new tax perk related to health insurance. And the stakes are even higher in 2014. The Affordable Care Act provides a tax incentive for small business owners who pay at least a portion of their employees’ health insurance. This year as much as 50% (up from 35% in 2013) of the...
Tags: Health Insurance
Category: Taxes
We all need an emergency fund, but what’s considered “an emergency?” Any unexpected hit to your finances, including layoffs, unanticipated illnesses, and natural disasters. Car insurance premiums and regular home maintenance are (or should be) anticipated, so they’re not emergencies. The same is true of credit card bills for vacations and visits to the dentist’s office. An emergency fund is...
Tags: Emergency Savings
Category: Accounting
Have you ever wondered if the Alternative Minimum Tax applies to you? You may have to pay this tax if your income is above a certain amount. The AMT attempts to ensure that some individuals who claim certain tax benefits pay a minimum amount of tax. Here are some things from the IRS that you should know about AMT: 1....
Tags: Alternative Minimum TaxAMT
Category: Taxes
Are you considering withdrawing funds from your traditional IRA to pay unexpected medical costs? You may be hesitating because of the 10% penalty imposed on withdrawals made when you’re under age 59½. Since the 10% is calculated on the total you withdraw, the tax hit could be substantial. Worse, the penalty typically is not withheld from the cash you receive,...
Tags: ira withdrawal
Category: Taxes
If you do any of the following, you will need an Employer Identification Number (EIN) from the IRS: If you operate your business as a corporation or partnership. If you file reports for employment taxes, excise tax, or alcohol, tobacco and firearms. If you have even one employee. If you have a self-employed retirement plan. If you operate as any...
Tags: Employed ID numbers
Category: Taxes
In recent years, businesses could expense up to $500,000 of equipment purchases in the year of purchase, with a $2,000,000 annual purchase limit. In addition, bonus depreciation was allowed for new equipment purchases. Because Congress did not extend these provisions for 2014, businesses can now only expense $25,000 of new or used equipment purchases. The deduction is reduced dollar-for-dollar when...
Tags: equipment write offs for 2014
Category: Taxes