Tax Tips Newsletter
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December 2014 - Vol 9, Issue 10
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Greetings!
Simon Santa

Happy Holidays! I hope your holidays season with be wonderful and full of joyous times with friends and family.

We will be e-mailing out the organizers shortly after the beginning of the year. E-mail will be our default method of delivery. If you would prefer to receive a paper organizer please contact Mary-Ann by phone or e-mail (mary-ann@llhcpa.com) and let her know.

The office will be closed December 25 through December 28 and again from December 31 through January 4. I will be on vacation from December 29 through January 5.

Before you get set to enjoy the holiday season, take a look at steps you can still squeeze into 2014 to minimize your taxes. Here are some possibilities.

* If you're feeling charitable, consider giving appreciated stock to a favorite charity. You will avoid capital gains tax on the appreciation while claiming a tax deduction for the market value of the stock.

* Use your credit card to pay tax-deductible expenses by December 31 if you're short of cash. You'll be able to deduct the expenses on your 2014 return even though you don't pay your credit card bill until 2015.

* Make your January mortgage payment before December 31 to squeeze an extra interest deduction into 2014.

* Make tax-free gifts to use your annual gift tax exclusion for 2014. You can give up to $14,000 to as many individuals as you like without tax consequences. These gifts to individuals are not deductible by you; nor are they taxable to the recipients.

* If a wedding or divorce is in your year-end plans, be aware that your marital status as of December 31 determines your tax status for the whole year. Changing the dates of a year-end event may save taxes.

* Consider investing in a health savings account (HSA). You'll get a current-year tax deduction for your contribution, while providing a savings account to use to pay out-of-pocket medical expenses currently or in the future. An HSA is not a "use it or lose it" plan. Any funds in the plan can be used in future years. Also, be aware that you can make your 2014 contribution up to April 15, 2015.

For guidance in choosing the best year-end moves for your situation, give me a call.
Business Plan
Every trade or business must file information returns (Forms 1099) for each year that certain payments are made to noncorporate recipients.

One of the most common information returns for most small businesses is Form 1099-MISC. You use Form 1099-MISC to report miscellaneous payments to nonemployees. This includes fees for services provided to your business by independent contractors, such as consultants, cleaning people, and others. Generally, you don't report fees paid to corporations, but there are exceptions. Payments to lawyers, for example, must be reported whether the lawyers are incorporated or not.

This month is the perfect time to start assembling what your company will need to meet the reporting requirements for Form 1099: a list of recipients, verification as to corporate/noncorporate status, and the recipient's taxpayer information. Getting a head start now will eliminate a last-minute scramble next month.

Failure to file returns or to include correct information can result in a fine of up to $100 per information return to a maximum of $500,000 for a small business.

Information returns are to be given to payees by February 2, 2015, and copies are to be mailed to the IRS by March 2, 2015. The IRS due date is extended to March 31, 2015, for electronically filed returns.

If you need help determining your 1099 filing requirements for this year, contact my office.
Suzette with Santa hat
Tax Tip of the Week: Get ready for next tax season. Double check your income and tax payments. Maximize any 401(k) contributions by the end of the year. Read this article for more info.

Business Tip of the Month: How do you handle customer complaints? Dealing constructively with customer complaints can build loyalty and may even generate new business. Read this article for some helpful info.

Financial Tip of the Month: Are you living paycheck to paycheck? Are there areas in your life where you can cut back on costs - cable TV, cell phone, home phone, consolidating your trips in the car to conserve gas, etc. Read this article for some good tips to cut back on your spending.

Fraud Alert: The holiday season is a season of giving and the scams are out in full force to catch those in the giving spirit! Beware of what charities you are giving to. Www.charitynavigator.org is a great site to provide info on reputable organizations. Check before you give!
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Sincerely,
Linda Heineman
Linda L. Heineman, CPA

phone: 626-577-0979