It seems like the kids are really beginning to grow up faster and faster – now they are in high school and looking at colleges and have part-time jobs in the summer and/or after school. Well, now is the time for the kids to start saving for retirement by setting up a Roth IRA. No tax deduction, but the investments grow tax free until retirement and can then be withdrawn tax free as needed. See this posting in the New York Times by Ron Lieber for more details and some long term projections of the investments: http://www.nytimes.com/2014/08/02/your-money/individual-retirement-account-iras/for-teenagers-starting-and-saving-in-a-roth-ira.html?_r=0 If someone starts a Roth and contributes $5,500 each year until age 65 and earns a 5% return, starting 6 years earlier (19 instead of 25) will generate over $250,000 more in earnings for the additional $33,000 investment, so it is better to start younger (the old compound earnings story, of course.) The key is starting early. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa
CPA Tax Musings: The Strange and Subtle Rules of Estimated Taxes
You may have noticed that last year you actually owed taxes when you filed your return. If it was a small amount you probably didn’t really think much about it. Just remember if you owe a lot on April 15, the IRS and your state will charge a late payment penalty equal to half a percent a month. See this article from Julian Block in AccountingWeb about the wonderful (?) world of estimated tax payments: http://www.accountingweb.com/article/strange-and-subtle-rules-estimated-taxes/223682 If you decide you have to make estimates to avoid penalties, you need to get started! The next payment due date is September 15; if you have a tax preparer they can go over the numbers and together you can come up with estimates that will at least cut down the amount you would owe April 15 while at the same time work with your cash flow situation. Then you will not owe the government anything besides taxes. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa
Tax Musings of a Burbank CPA: Job Hunting Expenses
If you have started looking for employment in your current profession, remember that some or all of the expenses of job hunting may be deductible on your income taxes. See this IRS tip on deducting job hunting expenses: http://content.govdelivery.com/accounts/USIRS/bulletins/c7b11b?reqfrom=share Remember that job hunting expenses for a new profession are not deductible – the deductible expenses are for job search in your current line of work. The job hunting expenses are deductible as miscellaneous expenses on Schedule A and are reduced by 2 percent of your adjusted gross income. Let your preparer know what the expenses are - he/she can help you figure the deductions and tax savings. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa