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Tax Tips Newsletter
Serving you since 1993
January 2014 - Vol 9, Issue 1
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Greetings!
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Happy New Year! I hope that 2014 will be a fulfilling, healthy, prosperous year for you.

The organizers have been either mailed or e-mailed to our individual tax clients. If you have not received an organizer please call the office and let us know. Just a reminder that the organizer is NOT a fill-in form. It is just a plain PDF file. You will have to print it out and fill it in as you did in the past. If you are an Adobe Acrobat genius you can figure out a way to add the fill-in fields, but it's not necessary. I am hoping that in the future this will be a fill-in form.

Also, PLEASE do not send us your information through regular e-mail. It is not secure. You are doing so at your own risk. Upload to my Hightail page. It is: https://dropbox.hightail.com/LindaHeineman947450

We are receiving tax information and working on returns. However the IRS is not accepting e-file returns until the end of January. We will be transmitting returns as early as possible.

The office is now open Monday through Friday. Our hours during tax season are 9:00 a.m. through 5:00 p.m. My staff has the ability to log in and work remotely so the best way to reach all of us is by e-mail. We will be working many more hours than that but during the off hours we are working remotely.

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

Each year the IRS adjusts certain tax numbers for inflation and tax law changes. Here are some of the adjusted numbers you'll need for your 2014 tax planning.

* STANDARD MILEAGE RATE for business driving drops to 56¢ a mile. Rate for medical and moving mileage drops to 23.5¢ a mile. Rate for charitable driving remains at 14¢ a mile.

* SECTION 179 maximum deduction decreases to $25,000, with a phase-out threshold of $200,000. (Legislation may reinstate the 2013 deduction amount of $500,000, with a $2,000,000 purchase limit.)

* SOCIAL SECURITY taxable wage limit increases to $117,000. Retirees under full retirement age can earn up to $15,480 without losing benefits.

* KIDDIE TAX threshold remains at $2,000 and applies up to age 19 (up to age 24 for full-time students).

* NANNY TAX threshold increases to $1,900.

* HSA CONTRIBUTION limit increases to $3,300 for individuals and to $6,550 for families. An additional $1,000 may be contributed by those 55 or older.

* 401(k) maximum salary deferral remains at $17,500 ($23,000 for 50 and older).

* SIMPLE maximum salary deferral remains at $12,000 ($14,500 for 50 and older).

* IRA contribution limit remains at $5,500 ($6,500 for 50 and older).

* ESTATE TAX top rate remains at 40%, and the exemption amount increases to $5,340,000.

* The ANNUAL GIFT TAX EXCLUSION remains at $14,000.

* ADOPTION TAX CREDIT for adoption of an eligible child in 2014 is $13,190.
House
Every few years the "nanny tax" becomes a big news story when some high-profile political figure reveals that he or she hasn't paid required nanny taxes. While you may not plan on running for political office, failing to pay the nanny tax on the household workers you employ could result in IRS penalty and interest charges. And that's in addition to the tax itself.

If you paid a household employee - such as a gardener, housekeeper, or nanny - more than $1,800 in wages in 2013, you may have payroll tax obligations to meet. These taxes are called "nanny taxes." You are generally required to pay social security taxes on your worker's behalf, and you may have other federal and state payroll tax obligations as well.

If you had household workers in 2013, it's worth contacting my office to discuss your tax obligations. January 31, 2014, is the deadline for sending W-2 forms to your workers if the nanny tax applies for 2013. Be aware that the nanny tax threshold increases to $1,900 for 2014.
Winter Reflection
Tax Tip of the Week: Confused about the tax credit for the small business health insurance premium? Check out this article for more information.

Business Tip of the Month: Are you hands on with your business? Would you know if one of you employees was stealing funds? Embezzlement in a small business can be the end of the business if not caught immediately. Read this article for some tips on preventing embezzlement in your company.

Financial Tip of the Month : Are you at the age where you can start collecting social security? Should you take it now at age 62 or wait to collect the full amount at age 66 1/2? It depends on your circumstances. Read this article for some helpful information in making your decision.

Fraud Alert: The news has been filled with the breach of debit card info with Target Stores this past holiday season. Many people can have their bank account drained of all funds. Learn how to protect your debit card from fraud. Read this article for some helpful tips.
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Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979