My Blog
Blog
IRS Increases 401K Contribution Limits by $500 from January 1st 2018.
| Posted on November 16, 2017 at 2:40 PM |
comments ()
|
 IRS
Increases 401K Contribution limits by $500 from January 1st 2018 What this means for you. The IRS had
announced sometime in October, that effective from January 1 2018,
the contribution limit for Employees who participate in 401(k), 403(b), most
457 plans and the Federal Government’s Thrift Savings Plan will be increased
from $18,000 to $18,500. This is
surely a Big Deal. As we all know, this extra $500 can help us more than we may
think and it could also mean up to $70,000 more in your retirement account,
assuming you decide a retirement age of 67 for yourself and at a 6 percent
annual rate of return. This is also
important to know, as we have only few weeks to the end of the Year and most of
us have less than 3 Payroll Cycles to the end of 2017. We need to ensure that
we are working towards reaching the limit of $18,000 for this Year and if you
are over 50, try to ensure that your Payroll Company implements your catch-up
contribution limit of $6,000. It’s been discovered that most time, they don’t
implement it, unless you inform them. If you have not been
contributing the maximum amount to your 401(k), this IRS Announcement is a
useful reminder to push your contribution rate higher. Even if you’re not saving that much,
increasing your savings rate by a percentage point or two every year, and
anytime you get a pay raise will make a Big Difference to you in Retirement. In
addition to this announcement, the income ranges for determining eligibility to
make deductible contributions to traditional Individual Retirement Accounts
(IRAs), to contribute to Roth IRAs and to claim the saver’s credit is also
increased for 2018. Taxpayers
can deduct contributions to a traditional IRA, if they meet certain conditions.
If during the year either the taxpayer or their spouse was covered by a
retirement plan at work, the deduction may be reduced, or phased out, until it
is eliminated, depending on filing status and income. If neither the taxpayer
nor their spouse is covered by a retirement plan at work, the phase-outs of the
deduction do not apply. Here are
the phase-out ranges for 2018:
Highlights of Limitations
that Remain Unchanged for 2018:
Please Note that If you don’t
have a 401(k), there are other ways to put your money to work. Consider alternate
retirement savings accounts, such as Roth IRA , Traditional IRA and/or Health
Savings Account. The IRS
issued technical guidance detailing these items in Notice 2017-64 |
Tax Credits & Tax Deductions.
| Posted on April 6, 2017 at 10:42 AM |
comments ()
|
We have only Few Days left to the end of Tax Season; Many of Our Clients ask if a Tax Credit is better than a Deduction. Just to enlighten us, A Tax Credit is a Dollar -For-Dollar Reduction of the Taxes you owe; For instance, A $100 Credit means you pay $100 less in Taxes. A Deduction reduces the Taxes, you owe by a Percent of every Dollar, you're allowed to deduct. You Calculate the worth of your Deduction by multiplying your marginal (Or Top) Tax Rate by the amount of the deduction. If you're in the 25% Tax Bracket, a $100 Deduction means you will pay $25 less in Taxes (0.25 times $100). Need More Clarification on Getting the Best of your Tax Deduction and Credits? Contact Us Today and We will be Glad to help you out. |
Unclaimed Business Expenses.
| Posted on February 23, 2017 at 9:59 AM |
comments ()
|
It's unbelievable to hear that People forget to claim the expenses incurred on their Credit Card during their Tax Filing; We have noticed that many Business Owners neglect to include their Credit Card Activities, which qualify for Business Deductions. This is due to Ignorance and lack of knowledge in knowing how to input this in their Accounting Software. |
Filing Season Starts Monday, January 23rd 2017.
| Posted on January 15, 2017 at 11:43 PM |
comments ()
|
 The IRS will begin accepting 2016 Returns and processing Paper Ones on January 23,2017. The Closer you are to the front of the line, the safer your refund will be. So What Do you Need to Do?*Start collecting your Tax information- Your W-2s, Mortgage Interest Statements and 1099s as soon as it begins arriving in the Mail. * Pull Together Receipts and Other Information on your itemized deductions as soon as possible. * Once you have everything you need, Schedule Time with your Accountant, Bookkeeper, Enrolled Agent or Tax Preparer. Need Extra Incentive? Not Only will filing as soon as possible protect you from fraud, but you will also get your money back quickly. With the New IRS W-2 Filing Rule, Tax Payers claiming certain Tax Credits are expected to wait longer for their refunds. Remember: Tax Returns are Due April 18th of this Year. Let the Tax Season Begin and Enjoy a Good Tax Filing Season. |