If you look at most of the retirement plan contribution limits for 2014, you notice that they look familiar. Oh yeah, they are almost all the same as 2013! Because of the way the IRS and Congress adjust these limits for inflation, there are many years when even if inflation ticked up a little, there is not enough of a jump to raise the maximum contributions. But one of the few exceptions in 2014 is the maximum contribution limit to a solo 401K plan. The maximum has jumped $1,000 to $52,000, up from $51,000 in 2013. For someone self-employed in 2014, to reach the maximum limit you have to have income from the business of $260,000 (you can contribute 20% of your net business income to the 401K if you are self-employed.) Now for a C or S Corporation, which is based on wages, a shareholder employee can contribute the $52,000 on only $138,000 of wages, because as an employee the shareholder can contribute 100% of wages up to $17,500 as an employee deferral, and the corporation can contribute 25% of the wages up to $34,500 as an employer contribution for the employee (meaning wages have to be $138,000 to qualify for the maximum contribution.) Anyway, this is one time when something going up (besides the stock [...]
Year End Musings of a Burbank CPA: A Quick List of New Year’s Resolutions
Here is a quick list of tax items you need to get a good start on in the coming New Year. With a lot of these things the sooner the better: 1. Get your tax return information together now! If you wait too long you are going to be rushed and this will possibly cause you to miss deductions that save taxes or forget to claim income that will get you a letter from the IRS later in the year. Don’t put it off – get it done now so when your tax documents (W2s, 1099s, etc) come you are ready to schedule a meeting with your tax preparer or (gasp) do your taxes yourself. 2. If you have your return prepared by a professional, set up an appointment with them right away. Even though individual returns can’t be processed until January 31, meet with your old trusted preparer as soon as possible to get what you have in place – then items can quickly be added as they come in and the return can be processed as soon as possible (there may be a line of returns waiting for processing – this gets you in the line, plus if there is a [...]
Burbank CPA Musings: Tax Season Worries: Late Laws, Late Clients, Late Start
This isn’t news to any tax preparer (we have heard it all before) – Congress will pass last minute tax law, clients don’t get preparers information on time, the IRS has to delay processing tax returns. This posting by Daniel Hood summarizing an AccountingToday survey of tax professionals just writes down in stone all our tax preparer worries: http://www.accountingtoday.com/news/tax-season-worries-late-laws-late-clients-late-start-69023-1.html There is also talk of most preparers raising preparation fees this year. Well, with the cost of supplies, staff and other items (tax prep software, for instance) increasing, it is obvious prices will go up for tax preparation. As far as the other worries above, thank goodness for extensions! I have a feeling they will be going up, too. 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 Has been Featured On https://twitter.com/bstonercpa