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4 tax challenges you may encounter if you’re retiring soon
May 16, 2023
Categories: #hh, IRA, Retirement, Savings, Social Security, Tax
Are you getting ready to retire? If so, you’ll soon experience changes in your lifestyle and income sources that may have numerous tax implications. Here’s a brief rundown of four tax and financial issues you may contend with when you retire: Taking required minimum distributions. These are the minimum amounts you must withdraw from your retirement accounts. You generally must start taking withdrawals from your IRA, SEP, SIMPLE and other retirement plan accounts when you reach age
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Retirement saving options for your small business: Keep it simple
April 13, 2023
Categories: #hh, Business, Income, IRA, Retirement, Savings
If you’re thinking about setting up a retirement plan for yourself and your employees, but you’re worried about the financial commitment and administrative burdens involved, there are a couple of options to consider. Let’s take a look at a “simplified employee pension” (SEP) or a “savings incentive match plan for employees” (SIMPLE). SEPs are intended as an attractive alternative to “qualified” retirement plans, particularly for small businesses.
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Many tax limits affecting businesses have increased for 2023
February 1, 2023
Categories: #hh, Business, Retirement, Savings, Social Security, Tax
An array of tax-related limits that affect businesses are indexed annually, and due to high inflation, many have increased more than usual for 2023. Here are some that may be important to you and your business. Social Security tax The amount of employees’ earnings that are subject to Social Security tax is capped for 2023 at $160,200 (up from $147,000 for 2022). Deductions Section 179 expensing: Limit: $1.16 million (up from $1.08 million) Phaseout: $2.89 million
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How the new SECURE 2.0 law may affect your business
January 16, 2023
Categories: #hh, General, Retirement, Savings, Tax
If your small business has a retirement plan, and even if it doesn’t, you may see changes and benefits from a new law. The Setting Every Community Up for Retirement Enhancement 2.0 Act (SECURE 2.0) was recently signed into law. Provisions in the law will kick in over several years. SECURE 2.0 is meant to build on the original SECURE Act, which was signed into law in 2019. Here are some provisions that may affect your business. Retirement plan automatic enrollment. Under the new law, 401(k)
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Investing in the future with a 529 education plan
October 5, 2022
Categories: #hh, Income, Savings, Tax
If you have a child or grandchild who’s going to attend college in the future, you’ve probably heard about qualified tuition programs, also known as 529 plans. These plans, named for the Internal Revenue Code section that provides for them, allow prepayment of higher education costs on a tax-favored basis. There are two types of programs: Prepaid plans, which allow you to buy tuition credits or certificates at present tuition rates, even though the beneficiary (child) won’t
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The kiddie tax: Does it affect your family?
July 19, 2022
Categories: Income, Investments, Savings, Tax
Many people wonder how they can save taxes by transferring assets into their children’s names. This tax strategy is called income shifting. It seeks to take income out of your higher tax bracket and place it in the lower tax brackets of your children. While some tax savings are available through this approach, the “kiddie tax” rules impose substantial limitations if: The child hasn’t reached age 18 before the close of the tax year, or The child’s earned income
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Inflation enhances the 2023 amounts for Health Savings Accounts
May 9, 2022
Categories: #hh, inflation, Savings, Tax
The IRS recently released guidance providing the 2023 inflation-adjusted amounts for Health Savings Accounts (HSAs). High inflation rates will result in next year’s amounts being increased more than they have been in recent years. HSA basics An HSA is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” An HSA can only be established for the benefit of an “eligible individual”
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Taking the opposite approach: Ways your business can accelerate taxable income and defer deductions
March 22, 2022
Categories: #hh, Savings, Tax, Tax Breaks, Tax Cuts, Tax Records
Typically, businesses want to delay recognition of taxable income into future years and accelerate deductions into the current year. But when is it prudent to do the opposite? And why would you want to? One reason might be tax law changes that raise tax rates. There have been discussions in Washington about raising the corporate federal income tax rate from its current flat 21%. Another reason may be because you expect your noncorporate pass-through entity business to pay taxes at higher
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Does your business barter? Here are some facts you should know
March 10, 2022
Categories: #hh, Consulting, Record Retention, Savings
In today’s economy, many small businesses are strapped for cash. They may find it beneficial to barter or trade for goods and services instead of paying cash for them. Bartering is the oldest form of trade and the internet has made it easier to engage with other businesses. But if your business gets involved in bartering, be aware that the fair market value of goods that you receive in bartering is taxable income. And if you exchange services with another business, the transaction results in
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The Ins and Outs of IRAs
February 3, 2022
Categories: Home Office, Investments, Record Retention, Retirement, Savings
Traditional IRAs and Roth IRAs have been around for decades and the rules surrounding them have changed many times. What hasn’t changed is that they can help you save for retirement on a tax-favored basis. Here’s an overview. Traditional IRAs You can make an annual deductible contribution to a traditional IRA if: You (and your spouse) aren’t active participants in employer-sponsored retirement plans, or You (or your spouse) are active participants in an employer plan,