retirement - Herman & Co. CPA

Social Security Update

The annual inflation adjustments have been announced for the various Social Security amounts and thresholds, so we thought it would be a good time to update you for 2014.

You can file your tax return claiming a traditional IRA deduction before the contribution is actually made. However, the contribution must be made by the due date of your return, not including extensions.

Our 2013 Annual Year-End Tax Planning Letter

Anyone is permitted to make gifts of up to $14,000 per year to an unlimited number of people without having to pay gift taxes. Married couples can make combined gifts of up to $28,000. A married couple wishing to make gifts to two married children and four grandchildren can make gifts of up to $224,000 per year ($28,000 to each child, grandchild and child’s spouse) without paying any gift taxes.

Our 2013 Annual Year-End Tax Planning Letter

One of the biggest deductions available to all businesses, and one that will be dramatically reduced in 2014, is the Section 179 expensing election. This is the last year for expensing up to $500,000 of Section 179 property. The maximum amounts drops to $25,000 next year!

Getting Divorced: FAQs Part 2

Make an agreement with your spouse to plan for the legal issues that will be dealt with in the future, such as division of property, alimony or support payments and child custody. The amount of time and money that will be spent trying to reach a legal solution will be lessened dramatically if this can be done, either with the help of lawyers or court.

Long-Term Care Insurance FAQ

Even though Long-Term Care Insurance can be costly up front, it could save you from paying much more in the long run. The home care coverage that is included in the policies could possibly allow you to live independently for more time before having to switch to assisted living.

Employee Benefits as a Small Employer

The employer must pay for certain legal benefits and insurance coverage such as Social Security, unemployment insurance and worker’s compensation.

Roth IRA Conversions

Just because you qualify to make contributions to a Roth IRA does not mean you are also entitled to convert your plain-vanilla IRA into a Roth. Unfortunately, the income limit for conversions is slightly lower – $100,000 of modified adjusted gross income for both joint filers and singles – than the income limits for contributions. However, if you qualify to convert, there are situations where you should.

Increased Medicare Payroll Tax

The Medicare payroll tax is the primary source of financing for Medicare, which generally pays medical bills for individuals who are 65 or older or disabled. It’s crucial to understand the changes that have been made to this crucial tax.