You may be familiar with the old tax rule that let you take an itemized deduction for unreimbursed medical expenses that exceeded 7½% of your adjusted gross income. For 2013 and future years, the income threshold increases to 10% for taxpayers under age 65. Those 65 and older may continue to use the 7½% threshold through the year 2016.
Friday, February 28, 2014
Wednesday, February 26, 2014
If your income exceeds certain levels, you cannot make contributions to a Roth IRA. However, you can convert a traditional IRA to a Roth IRA no matter how high your income. Roth IRAs are popular because qualifying distributions are tax-free and annual distributions are not required at age 70½. A conversion to a Roth is a taxable event, so factor that into your analysis. For more information, call us at (518) 798-3330.
Friday, February 21, 2014
You now have a choice in how you deduct the expense of a home office. Starting with your 2013 tax return, you can either deduct the actual expenses connected with your home office, or you can use the simplified method of deducting $5 per square foot of the part of your home used for business, up to a maximum deduction of $1,500.
Remember, the deduction isn't available just because you do work at home; you must use part of your home regularly and exclusively as your principal place of business or where you meet customers, clients, or patients in the normal course of business.
Wednesday, February 19, 2014
In recent years, businesses could expense up to $500,000 of equipment purchases in the year of purchase, with a $2,000,000 annual purchase limit. In addition, bonus depreciation was allowed for new equipment purchases.
Because Congress did not extend these provisions for 2014, businesses can now only expense $25,000 of new or used equipment purchases. The deduction is reduced dollar-for-dollar when total asset purchases for 2014 exceed $200,000. Also, the 50% bonus depreciation that applied in 2013 is no longer available.
Congress may extend these provisions, or they may not. Check with us for the latest when you're making equipment purchasing decisions this year.
Monday, February 17, 2014
The IRS has issued a warning about the latest phone scam. The caller claims to be from the IRS and tells the intended victims they owe taxes which must be paid immediately with a pre-paid debit card or wire transfer. Individuals who don't pay up are threatened with arrest or loss of their business or driver's license.
Watch for these signs that the call is a scam:
- Use of fake IRS badge numbers
- Caller knows the last four digits of your social security number
- Caller ID appears as if IRS is calling
- Bogus IRS e-mail is sent as follow-up
- Second call claims to be from police or DMV, again supported by fraudulent caller ID
Don't respond in any way to these scams; instead forward the scam e-mail to firstname.lastname@example.org, or file a complaint at FTC.gov.
Wednesday, February 12, 2014
Friday, February 7, 2014
Monday, February 3, 2014
The rules for filing 2013 tax returns are straightforward for most people. Marital status, age, and income level are generally the determining factors. Here's a quick overview of the income levels at which a 2013 return is required.