Thursday, February 25, 2016

DO YOU HAVE ENOUGH EMERGENCY SAVINGS?

A December 2015 survey by a consumer financial services company showed that 36% of the people who participated said they dealt with their most recent unexpected expense by using savings. Would you be part of that group? Here are tips for starting your "rainy day" fund.

Define how much emergency savings is enough. A good starting point is to plan for your emergency fund to cover three to six months of expenses. Another good starting point: Ask yourself how much you'll need to cover minimum monthly expenses without resorting to credit cards or lines of credit. Your assessment of an adequate balance will vary based on your financial situation, including the vulnerability of your income. For example, a one-earner household is more vulnerable than a two-earner household when it comes to paychecks, so the one-earner family generally will need to set aside more for emergencies.
Track how much you already have set aside. Include all sources in your accounting. For instance, some companies provide payment for accrued vacation and/or sick leave to laid-off employees. If your company provides this benefit and you maintain significant balances, you may not need as much in an emergency fund to help you weather an unexpected layoff.
Decide whether to pay off bills first. Putting excess cash toward high interest credit card balances might make more sense than funding a savings account that earns a much lower rate of interest.
Keep your funds liquid. Emergency money should be easy to get at. You don't want to have to sell investments at a potential loss or pay withdrawal penalties in order to cover an unexpected hit to your finances. Look into savings or money market accounts as places to accumulate cash.
We can help you estimate how much to stash away in your emergency fund. Give us a call at (518) 798-3330 for help establishing a savings goal for those stormy days.

Monday, February 22, 2016

DEPRECIATION BREAKS BOOST TAX DEDUCTIONS

Did you buy equipment or other business assets during 2015? Here are the current rules for maximizing your tax deduction.

Wednesday, February 17, 2016

WHAT'S THE PENALTY FOR NOT HAVING HEALTH INSURANCE?

Did you have health insurance in 2015? If not, you may owe a penalty on your federal income tax return. For 2015 returns, the penalty is the higher of a flat dollar amount or a percentage of your household income. The flat dollar amount is $325 per adult and $162.50 per child under age 18, up to a maximum of $975 per family. The percentage-of-income amount is 2% of household income above the filing threshold for your filing status. The maximum penalty for this calculation is based on the total annual average premium for a bronze level insurance plan purchased from the government website.

Monday, February 15, 2016

WILL THIS IRS DUE DATE EXTENSION HOLD UP YOUR TAX RETURN?

In December, the IRS extended the time to file for employers who were required to provide health care information forms such as Form 1095-C to employees. Because the new due date is March 31, you may be ready to file your federal income tax return before you receive Form 1095-C. The IRS says that for 2015, you do not need to wait to receive the form. Instead, you can rely on other information to complete and file your return. Contact us at (518) 798-3330 if you have questions about tax forms you may be receiving regarding your health insurance coverage.

Friday, February 12, 2016

FORM 1099 PENALTIES INCREASE SHARPLY

Have you filed required Forms 1099 for 2015? The forms were due by February 1 to individuals you paid $600 or more in the course of your business during the year. If you haven't completed Forms 1099, you'll want to do so as soon as possible. The penalties for failing to file range from $50 to $250 per form, depending on how late your filing is and whether or not the failure to file was intentional. Total penalties can go as high as $1 million for businesses with gross receipts under $5 million or $3 million for those with gross receipts over $5 million. Contact us at (518) 798-3330 for help in determining whether you need to file.

STAY COMPLIANT WITH MINIMUM WAGE LAWS


With some exceptions, the federal minimum wage is $7.25 per hour. But your state may require you to pay a different rate, and that rate may have changed as of January 1. When employees are subject to both state and federal minimum wage laws, the law says you need to pay the higher of the two. Remember that overtime rates are also affected by the minimum wage. Review your payroll practices, including the posting of required notices to employees.

Tuesday, February 9, 2016

THREE POSITIVE STEPS TO FINANCIAL WELL-BEING

While you're gathering information to prepare your 2015 tax return, set aside time for a financial review. Here are steps to get started.

Thursday, February 4, 2016

CORPORATE MINUTES SUPPORT TAX DEDUCTIONS

Well-documented corporate minutes can provide valuable supporting evidence if the IRS questions choices you make on your tax returns. Minutes are especially important when related-party transactions are involved, such as payments, loans, or distributions between the company and you or other owners. For example, the IRS may challenge the amount of your compensation. Corporate minutes that document the factors considered by the board in approving the compensation can be a defense against this type of challenge.

Monday, February 1, 2016

TAX BREAKS EXTENDED RETROACTIVELY; SOME ARE PERMANENT

In mid-December, Congress renewed a long list of tax breaks known as "extenders" that have been expiring on an annual basis. This year many of the rules are retroactive to the beginning of 2015. You may be able to benefit from some of them as you prepare your 2015 federal income tax return.