Greetings!
Thursday is Thanksgiving! The year has certainly flown by. Sometimes time flies by so quickly that we forget to plan for our futures. Starting this week and continuing through December, we'll be sharing tax saving tips. This week we discuss retirement plans.
This week as we count our blessings we at ECL Consulting, LLC include you on that list. Thank you for allowing us to serve you.
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Invest in Your Future - Retirement Plan Contributions |
This holiday season give yourself the gift that keeps on giving - set up and contribute to your own future through a retirement plan. If you own an incorporated or unincorporated business, consider setting up a retirement plan if you don't already have one. In many cases you don't need to fund the plan until you pay your taxes, but allowable contributions will be deductible on this year's return. Contribution LimitsEmployees with 401(k) - If your employer has a 401(k), contribute the maximum amount ($15,500 for 2008, plus an additional $5,000 if age 50 or over, assuming the plan allows this much and income restrictions don't apply). Self-Employed or No Retirement Plan
If you are employed or self-employed with no retirement plan, you can make a deductible contribution of up to $4,000 a year to a traditional IRA (deduction is sometimes allowed even if you have a plan). There is also an additional catch up contribution of $1,000 if age 50 or over. Contributing to a retirement plan not only reduces your taxes now, it also helps you build a solid financial future. Contact us today to be connected with an expert financial advisor who can answer your questions and assist you in setting up the right plan. |
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Ask An Expert |
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Q: If someone is behind on making their monthly 941 (federal employment tax) deposits for several months, which should they pay first?
A: First avoid incurring any additional fees on top of interest & penalties already charged for late payment by filing your return regardless of whether you have made all payments. Next take a look at the schedule below to determine which of your deposits is costing you the most in increased penalties & interest - pay that one first.
Late filing = 5% penalty
1-5 days late = 2% penalty + 6% interest
6-15 days late = 5% penalty + 6% interest
16 or more days late = 10% penalty + interest
Making Payments:
DO NOT pay your tax with a check mailed directly to the IRS or with Form 941 if you are required to make monthly deposits. You will be charged 10% penalty for deposits made incorrectly. The IRS will often apply your payments to the most recent balances due so they can collect interest on old balances at the higher rate. We have experience in working with the IRS to have your payments applied correctly and reduce your accruing penalty & interest as much as possible.
Whenever possible, file your returns and make your deposits on time. For more information on planning for and correctly submitting your employment taxes contact us.
Need help keeping on top of your 941 deposits? We can help you sign up to make these payments online and even submit the payments for you each month so you don't have to remember! Contact us today to learn more. |
