Logo
Tax Tips Newsletter
Serving you since 1993
February 2014 - Vol 9, Issue 2
In This Issue
Sign Up
Quick Links
Greetings!
LH head shot Orange

Tax season is underway. I know that some of the tax information, particularly from brokers may not be available yet. If that is the only piece of information that is missing, please send your other information in as soon as possible so we can start working on it.

If you are a corporation client and want to file your returns on the March 15th deadline, I need to have your information by Monday, February 17th. If it is not in by then I cannot guarantee that your returns will be done by March 15th.

Beginning 1/1/4 businesses with 2 or more employees (including the owner) can no longer reimburse employees for their individually purchased health insurance and have it considered exempt income. For the health insurance to be exempt it must be a group policy. Also, without a group policy, an HRA (health reimbursement account) can no longer reimburse for medical expenses. Please let me know if you need any additional information regarding this issue.

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

Business Plan
As part of gathering the information you'll need to file your 2013 tax return, take a little extra time to review your current financial situation and the progress you're making toward your financial goals. Tax filing time provides an excellent opportunity to do this review since you'll have your records out for tax filing.

Here are suggestions to get you started on your review.

* FIRST, make a list of everything you own (assets) and everything you owe (liabilities). Alongside each asset, write a reasonable estimate of its fair market value and the form of ownership. Verify the exact amount of each liability and record it. Subtract what you owe from what you own, and you will have your net worth. Compare your net worth to last year's figure if you have it. Are you gaining or losing ground?

* SECOND, write down your financial goals and the amount of money you'll need to reach each one. With those goals in mind, review the performance of your investments.

* THIRD, check your insurance coverage to be sure you are neither over-insured or under-insured.

* FOURTH, Review your will and your estate plan. Did your situation change during 2013 (marriage, divorce, births, deaths, move to another state, for example)? This year the top estate tax rate is 40%, and the amount exempt from federal estate tax is $5,340,000. Make any necessary changes to your will and estate plan.

* FIFTH, review your credit use. Keep your credit card bills current. If you're finding that hard to do, it's probably time to cut up some of those credit cards and get your debt under control.

Finally, if you have trouble assembling information for this financial review, you probably need a better recordkeeping system. For help with any of this, call me. I'm here to assist you in any way I can.
50s and 100s
The IRS recently published statistics on the 2013 tax filing season. During 2013, the IRS issued over 109 million tax refunds totaling almost $300 billion. The average refund was $2,744.

If you're one of the millions of taxpayers who get a refund every year, consider using it this year to improve your financial situation. Everyone's needs are different, but here are some suggestions.

* If you have a 401(k) plan at work, contribute your refund. If your employer offers a matching contribution, that's an immediate return on your money in addition to the upfront tax deduction. And funds in the plan grow free of tax until withdrawal.

* If you want to earn a guaranteed double-digit return, use your refund to pay down credit card balances.

* Consider investing your refund in your child's education. Both Section 529 college savings plans and education savings accounts offer tax-advantaged ways to save for college costs.

* Make sure you're taking full advantage of your IRA options for retirement savings. Both traditional and Roth IRAs give you tax-free growth of earnings.

* If you've maximized your retirement and education savings, and your credit cards are under control, put your refund in diversified investments that make sense for your age and financial situation.

* Ask yourself if getting a big refund every year is a smart idea. Wouldn't you rather invest your money during the year instead of making an interest-free loan to the government? Consider filing an updated Form W-4 with your employer.

For details or assistance, give me a call.
Scenic floral & mountain scene
Tax Tip of the Week: Have you sold investments in 2013 and not sure about your tax rate? Are you planning to sell for 2014? Check out this article for more info as to what your tax rate will be.

Business Tip of the Month: You know that saying, "fail to plan, plan to fail?" For those who start a business without having a plan and a budget, you can plan to be out of business sooner than you can make your first dollar. Read this article for some great tips on what you need to know when starting a business.

Financial Tip of the Month: Health care costs are a concern for most of us, especially if you have recurring or continuing health issues. Read this article for some great tips on how to be ahead of the sky rocketing costs.

Fraud Alert: Elder financial abuse is a big business and many times are being defrauded by a family member. There are several factors that make American seniors susceptible to being victimized. Read this article to be aware, whether for yourself or a family member.
Quickbooks logo
Let me know if I can help you with any Quickbooks problems.

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