IRS Kicks Off 2014 Tax Season; Individual Returns Can Be Filed Now

IRS Kicks Off 2014 Tax Season; Individual Returns Can Be Filed Now; Free Online Services Available to Help With Filing, Refunds, EITC.

 

Happy Tax season to all! We look forward to a productive year. Check out the links on our website, we provide helpful forms for organizing for the tax season. Merchant Mariners and Travel Nurses tend to have more complicated tax returns and North Lake Tahoe Financial Services, LLC is adequately equipped to assist you in all 50 states.

 

Don’t forget the tax filing deadline is April 15th, 2014.

Tax Season Starts January 31st, 2014

The 2014 tax filing season is finally upon us. Are you prepared?

http://news.investors.com/investing/011714-686836-when-to-hire-a-financial-adviser.htm

The deadline is April 15, 2014 to file your taxes.

North Lake Tahoe Financial Services, LLC is equipped to handle all your financial needs, including tax preparation services. We can file tax returns in all 50 states.

We specialize in tax preparation for Travel Nurses and Merchant Mariners

Retirement Planning and Social Security

Most Americans, to at least some extent, will be relying on this Federal program in their later years. Many Americans are not saving enough for retirement, and will be working, either full or part time, several years into what used to be considered the “retirement years”.

For 2013 the Social Security retirement system provides a maximum benefit of $2,533 at full retirement age (for those attaining age 66 in 2013), for someone with 35 years of maximum contributions. For 2012 the maximum contribution is made for someone with $113,700 in Social Security taxable income.  The annual report is sent only to those over 60 and the rest can only find it  online now.  It shows estimates of our SS income based on starting benefits at several different ages.  Be aware that it assumes we continue to earn the same amount each year that we did last year until we start drawing the benefit.  It will use our best 35 years adjusted for inflation.  The computation of benefits is complex.  Part of the 35 year average is multiplied by .9 percent to arrive at a base amount of about $700 per month for most workers.  The next two portions are multiplied by different percentages, and the sum is the monthly benefit.

Social Security income can provide a very safe, but basic source of income for our retirement years.  It can be considered to be an automatic conservative diversification investment device used in conjunction with supplementary investment strategies.  When to begin receiving benefits depends on many factors.  Each year that the benefit is delayed between 62 and 70 results in an increased monthly amount of 8 percent.  See a CFP, for retirement planning, for the best result.

Medicare- Healthcare Insurance For The Golden Years

Health insurance coverage is important at any age, but average Americans largest health costs come after attaining the age of 65.

At age 65 we need to enroll in the Medicare health insurance system.  We have several choices to make at that time.  We can get a Medicare Advantage plan that takes over for Medicare and can provide a total package for healthcare insurance purposes.  Medicare Supplemental plans use Medicare for some coverage, but add coverage above the basic.  Your Union or other retiree health plan might add coverage/reduce your cost.

Part D is strictly for prescription drug coverage, which is not part of basic Medicare or Supplemental plan coverage.  You should at least consider a very basic Part D plan at 65 in order not to be penalized when you decide to pay for it later in life.  The penalty is one percent per month of the average Medicare Part D rate (around $30 per month) that you wait until you begin to pay for coverage.  Ten months would mean 10%, or about $3 per month would be added to your bill for part D when you sign up for it later.

It is good to review your Medicare insurance each year during the special enrollment period.  This is especially important for Part D coverage as the premium, and the costs and insurance coverage for various drugs can vary widely.  There are programs in every state called SHIPs (State Health Insurance Counseling and Assistance Programs) that have volunteers to help seniors, with the help of special online software, to choose from possibly dozens of health insurance company policies in order to get the best coverage depending on which drugs they are buying.

Year-End Planning Ideas (SUBJECT TO CHANGES IN FEDERAL TAX LAW)

Personal:

  • You may be able to deduct $5,500 ($6,500 for those over 50) for an IRA contribution for 2013- that is up $500 from 2012.
  • You may benefit from converting your IRA to a Roth IRA in 2012, or by taking taxable income in case your tax rate rises next year.
  • ‘Bunch’ itemized deductions into one year if they don’t exceed the itemized deduction.
  • Travel for medical and charitable purposes may be deductible.
  • Professional tax & investment planning can be a deductible expense.
  • Look into qualified energy saving ideas for your home and auto for tax credits.

Business:

  • Items bought for personal use, but used in the business are at least partially deductible when converted.
  • To save health insurance dollars, look into a Health Savings Account or other plan. You may now get a tax credit for employee insurance.
  • Travel between two business locations is generally deductible- the 2013 business mileage rate is 56.5 cents, 24 cents for medical & moving and 14 cents for charitable work and donation deliveries.
  • A Simplified Employee Pension (SEP) plan is easy to set up and great for business owners.  20% up to $50,000 (2012) and $51,000 (2013), of net income can be contributed each year.
  • There are no Federal employment taxes due when employing your children under 18 in your non-incorporated business. Unemployment-21.
  • Shop by December 31st to deduct for 2012.
  • Now is a good time for many people to start a small business of their own!