The question nobody ever asks: is all the mortgage interest my bank form 1098s shows deductible? You are allowed to deduct mortgage interest if: 1. You took out your mortgages on first and second homes before October 13, 1987 – these mortgages are grandfathered into the rules and you can deduct all your interest. 2. You took out your mortgages on first and second homes after October 13, 1987 and you have $1,000,000 or less in regular mortgage and $100,000 or less in home equity debt (where you borrowed money and did not put the money into the house and did not refinance) you can deduct all your interest on these mortgage loans. You have to have the mortgages secured by the properties plus make all the payments in 1. and 2. to get the deduction. 3. If you refinance these mortgages, the additional money you take out may not be ‘acquisition indebtedness’, which means it could be considered personal loans and the interest on that part of the mortgage not deductible. If you don’t have home equity debt $100,000 of the additional mortgage refinanced can still be deducted, but the rest can’t. You will have to allocate the interest [...]
CPA Tax Musings: Five Tips to Get Ready for a Pain-Free Tax Time
With the holiday season just around the corner, it’s a perfect time to get your financial records in order. Tax moves you make now can mean finding more “green” to spend on family gifts and festivities. Here are five quick tips for you to feel more prepared about your financial status as you go into year-end. Avoid Penalties This time of year is ideal to double-check your tax payments to make sure enough has been paid in, and even more important, to avoid overpaying so your money is not tied up unnecessarily. If you’re not sure of your 2013 tax liability, check with your tax preparer. Balanced Books Rather than wait until the busiest time of year for accountants and bookkeepers, you can get a head start now on catching up your books You’ll have more of their attention and you may even avoid a rate increase if you get your books done early. Completed bank reconciliations are a very important part of catching up. Forms It’s not too early to get your orders in for the forms you need at year-end like your W-2s, W-3s, 1099s, and 1096s. That way, your forms will be onsite when you’re ready. [...]
Burbank CPA Financial Musings: How to fund a 401(k) when you’re your own boss
If you and your spouse have a small business (Single LLC, Sole Proprietorship, C or S Corporation) you can have a 401K plan just like the big boys. It is easier to administer than more complicated plans and gives you investment flexibility that the larger plans may not have. See this article in the Christian Science Monitor by Dmitriy Fomichenko for a more detailed view of this popular retirement vehicle: http://echo4.bluehornet.com/ct/49498606:28261600621:m:1:2505976388:9ABC5AF8F414455EDE3217C0F352FD67:r This is definitely an improvement over a Roth or regular IRA as the contribution limits are larger ($17,500 employee deferral in 2014 for you AND your spouse, up to 100% of compensation, and an additional 25% employer contribution of compensation up to a max of $34,500 each) so you could put away $104,000 if you each take a salary of $134,000. Plus the $17,500 can be a Roth component without the AGI limitations of a Roth IRA, so for high income people it is a great way to go to sock away money for retirement. 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