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Tax Tips Newsletter
Serving you since 1993
July 2013 - Vol 8, Issue 6
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Greetings!
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I hope you have a wonderful, festive Fourth of July. The office will be closed on Fourth of July. In addition the office will be closed on Fridays from July 5 through at least the end of August. During this time the best way to contact my staff or me on Fridays is by e-mail.

We have been working on getting returns out the door for the past several weeks. If your information is in the office and you have not heard anything, please be patient. You should be hearing from me soon.

If you have not sent in your information yet, please do so as soon as possible. This is a good time for us to work on extensions.

I wanted to share with you a news article that features my clients. Well actually the pet of my clients, Barbara and Lou Friedman. Their dog Hazel is a trained comfort dog at Los Angeles International Airport. We have seen a lot of stories about comfort dogs in the news recently and the wonderful work that they do. Hazel was recently featured in a story on NPR. Here is a link to the article. Hazel the Comfort Dog

Many thanks for your referrals. I appreciate your confidence in my staff and me.

Taxes with flag
Here's an update on recent IRS activity that may be of interest to you:

* IRS CLOSURES
The IRS will close all of its operations on July 5, July 22, and August 30, 2013. The current budget situation, including the sequester, has made these closures necessary; IRS employees will be furloughed without pay on these days. Taxpayers should continue to file returns and pay any taxes due as usual.

* TAX EXTENSIONS FOR TORNADO VICTIMS. The IRS announced that it will provide tax relief to individuals and businesses affected by the recent tornadoes and other severe storms. Tax filing and payment deadlines from May 18, 2013, on will be extended until September 30, 2013. For more information, contact our office.

* 2014 HSA LIMITS The 2014 health savings account (HSA) contribution limit for individuals is $3,300; the limit for family coverage is $6,550. A catch-up contribution of an additional $1,000 is permitted for individuals who are 55 or older.
Business people collaborating
If your child takes a job this summer, you'll want to know about the following tax issues.

For 2013, your child can earn as much as $6,100 and not pay a dime in federal income taxes. If your child's earnings won't exceed this amount, consider having the child claim "student - exempt" when completing the federal withholding allowance certificate (Form W-4). If this is the child's only income and the total is below the $6,100 limit, he or she then won't have to file a 2013 tax return.

If the child makes a maximum deductible traditional IRA contribution for 2013 ($5,500), he or she can earn as much as $11,600 without incurring any federal income tax. If your child earns over $400 of self-employment income, the filing requirements change.

There will still be withholding from your child's paycheck for social security and Medicare taxes. But those payments are not income taxes, and they cannot be refunded to the child.

As long as you provide more than half of your child's support, you can continue to claim the child as an exemption on your tax return. Your child will lose his or her exemption, but that exemption deduction is typically more valuable to you than to your child.

If you own your own business, consider hiring your child this summer. Your business can deduct the wages you pay the child, as long as the wages are appropriate for the work performed. If your business is a sole proprietorship or family partnership, you are not required to withhold social security or Medicare taxes on your child's wages if he or she is under 18 years of age.

If you have questions about your working child, contact my office.
Tax Tip of the Week: If you are elegible to take minimum distributions from your retirement plan. this weeks' Tax Tip deals with different options.

Business Tip of the Month: The Business Tip of the Month deals with managing wait times to increase customer satisfaction..

Financial Tip of the Month : Part of the sucess in managing money is being able to manage expenses. This month's Financial Tip has a few great suggestions on easy ways to tame spending.

Fraud Alert: Desparate to lose weight? These scams are some of the more dubious weight loss programs and products. Check them out.

https://www.facebook.com/pages/Linda-L-Heineman-CPA/266124360085715?ref=tn_tnmn

Photos © Bigstockphotos.com, istockphoto.com, Felix Orona>

Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979