We're sending thanks your way! Your business is important to us and we truly value the trust and confidence you've shown in letting us manage your tax and accounting matters.
We know the holidays can be hectic and taxes might be the last thing on your mind. We believe that a little bit of preparation makes for a much easier tax season come April! We want you to be prepared, so here are some tax tips to help you stay ahead of the tax scramble:
- IRA/SEP/401(k): Make sure to maximize your contributions to these plans by 4/15/2013. When it comes to IRAs, if you're 49 or under your limit is $5,000; those 50+ can contribution an additional $1,000. Click here for more information on contribution limits.
- Saver's Credit: If you make contributions to a traditional or Roth IRA, elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan, voluntary employee contributions to a federal Thrift Savings Plan, or contributions to a 501(c)(18)(D) plan, you may qualify for a Credit for Qualified Retirement Savings (saver's credit).
The credit equals a percentage of your eligible contributions (up to $2,000 if filing jointly - it is prorated based on your income). For 2012, the saver's credit is available if your adjusted gross income does not exceed:
- $57,500 on a joint return
- $43,125 on a head of household return
- $28,750 on all other returns.
- Charitable Cash Contributions: The IRS has special requirements for charitable cash contributions. They must be backed up with a written receipt or other documentation, regardless of the amount. Gone are the days of estimates. So continue to be as generous as you'd like, but make sure to get that receipt!
- Mileage: Be sure to give us your mileage logs for charitable miles (14 cents a mile), medical miles (23 cents a mile), business miles (55 cents). We want you to get every deduction you are legally entitled to!
- Business Investments: If you loaned money to your business, you are required to charge interest on the loan and report it as income on your personal return. If you don't, the IRS may reclassify it as a contribution to capital. Call or email and we can help you understand this better!
In our next email, we'll send information about the tax credits that expire at the end of the year along with the impacts of the Affordable Care Act on your wallet.
We hope you have a wonderful holiday season and just remember, we're only a phone call or email away with solutions to any of your tax and accounting questions. Let us help!
Warmest Wishes and Happy Thanksgiving!
- Maco & Associates