Prepare for Additional Medicare Tax in 2013

Additional Medicare Tax goes into effect January 1, 2013 at .09 percent for individuals with wages, other compensation and self-employed income that exceed the threshold amount. The IRS has provided a questions and answers page for business owners and the self-employed to assist them with preparations for the implementation of this tax. For the complete details, follow the link to the the IRS website.

Questions and Answers for the Additional Medicare Tax.

Business owners using software to prepare their payroll need to be sure to download the vendor software payroll tax updates prior to processing their first payroll in 2013 to insure the payroll taxes are properly calculated. Confirm your software payroll tax subscription is current before January 2013 to be eligible to download the tax updates. Most software payroll tax subscriptions require an annual subscription renewal.

Now is the time to review your software payroll subscription to prepare in advance for this cost. Contact your software vendor for details. Need help? You know where to find me!

Easy Tips to Market Your Business With Social Media

Quick and easy tips on how to use Social Media to market your business presented by The Business Journals.

How to Market with Social Media

See you on the web!

2013 Pension Plan and Retirement Changes

The IRS announced today cost of living adjustments for dollar limitations for pension plans and retirement related items for 2013. Highlights for the most common plans include:

Elective deferrals for 401(k), 403(b), most 457 plans and the Federal Thrift Savings Plan is increased to $17,500. Catch-up contributions for age 50 and over remain unchanged at $5,500.

Traditional IRA contribution deductions for those covered by an employer retirement plan are phased out for singles and heads of household with modified adjusted gross income between $59,000 and $69,000; married couples filing jointly income phase out range is $95,000 to $115,000; Contributors not covered by an employer retirement plan and married to someone who is, has a phase out based on the couple’s income between $178,000 and $188,000.

Contributions to a Roth IRA has a phase out range for married couples of $178,000 to $188,000; singles and heads of household income phase out range is $112,000 to $127,000.

The Saver’s credit for low and moderate income workers AGI limit is $59,000 for married couples, $44,250 for heads of household and $29,500 for singles or married filing separately.

The limitation on the annual benefit under a defined benefit plan is increased to $205,000.

The limitation for defined contribution plans is increased to $51,000.

The limitation regarding SIMPLE retirement accounts is increased to $12,000.

For the complete announcement covering all retirement plan changes, visit IRS.gov for Newswire release IR-2012-77.

2013 Tax Benefits Increase-Breaking News

 For tax year 2013, the IRS announced today annual inflation adjustments for more than two dozen tax provisions.

The annual exclusion for gifts rises to $14,000 for 2013, up from $13,000 for 2012.

The amount used to reduce the net unearned income reported on a child’s tax return subject to the “kiddie tax“, is $1,000, up from $950 for 2012.

The foreign earned income exclusion rises to $97,600, up from $95,100 in 2012.

Details on these inflation adjustments and others such as the low-income housing credit, the dollar limits for high-deductible health plans and other amounts can be found in Revenue Procedure 2012-41 which will be published in the Internal Revenue bullentin 2012-45 on November 5, 2012.

Stay tuned for more details!

Ways to Save Money-Digging Deeper

Everyone is looking for ways to save money for both their business and personal finances. We have all heard about obvious ways like brown bagging lunches, cutting out the morning latte, mowing your own lawn, etc. But what about ways that aren’t so obvious?

The key is knowledge….learning about things the average person doesn’t know. For example, let’s tackle your electric bill. Consider the electronics in your business or home and the electricity costs while they are not is use, as a result of the vampire effect of Standby Power. The vampire effect is termed from sucking electricity which equates to dollars spent in electricity. Standby Power is essentially a sleep mode for electronics that allows them to power up quicker. Convenience costs money. Consider unplugging the worst culprits and save  money on your electric bill EVERY month. To learn more about Standby Power and which electronics use the most wattage, visit the Standby Power website from Lawrence Berkley National Laboratory. You can also visit Energy.gov for more information on energy audits, available tax credits by state, rebates from electric companies and lighting choices giving you the same amount of light for less money.

Using the same concept, keep digging to find more money to save. Go to your next bill and learn about how your money is being spent. Then explore your options with research. Keep doing this for each bill you have and you will find savings that will keep saving you money EVERY month. Digging deeper into how you are spending your money will give you opportunities to consider ways to save. Give second thought to anything that can be categorized as a convenience. All convenience items have potential savings. Businesses can use the same concept to explore each bill to find ways to save.

The next step is not only learn before you spend money, but to take what you learned, and make better choices. Take advantage of the internet and the wide range of sources for consumer reviews before you make a purchase. Consider value and don’t be sucked into thinking you are getting the best deal by paying the lowest price. If you purchase the cheapest toaster available but have to replace it every year, you might need to consider purchasing a better product at a higher price, that will potentially last you three times as long. The end result is you get more for your money and that equals savings. The same concept holds true for businesses. When making personnel choices, the value of an experienced employee with a higher salary cost may be the better choice, enabling you to achieve your objectives quicker.

Another concept for you to try is to recognize the benefits of “less is more”. Basically it means, with less things you save more money. Consider what you have that can be potentially downsized…cell phone plan, vehicle, home, cable subscription, maintenance plans, insurance, etc.

Digging deeper takes times but the rewards end up in your pocket. Develop these concepts of thinking with your business and personal finances and you will find money to save. Happy Digging!

EFTPS Errors or Problems – Know Your Rights

If you think any information about an EFTPS (Electronic Federal Tax Payment System) transaction in your bank statement or EFTPS payment history is incorrect or you need additional information, call EFTPS at 800.316.6541 or write them at:

EFTPS Customer Service                 PO Box 173788                 Denver, CO 80217-3788

 Their business hours are 24 hours a day, 7 days a week.

You must notify them no later than 90 days after you receive the first bank statement on which the problem or error appears. You will need to supply them with the following information:

  1. Name and social security number of the primary taxpayer on the tax form in question.
  2. Describe the error and why you believe it is an error, or why you need additional information.
  3. Give the dollar amount of the error.

If you call them, they will request you also send your complaint or question in writing within 10 business days. If they request you submit your complaint or question in writing and they do not receive it within 10 business days, they may not credit your account.

EFTPS will determine whether an error occurred within 10 business days after you contact them and will correct the error promptly. If they require additional time, they may take up to 45 days to investigate your complaint or question. If they decide to take the additional time, they will credit your bank account within 10 business days for the amount you think is in error, so you may use the  money while they complete their investigation.

They will inform you of the results within three business days after completing the investigation. If they determine no error was made, they will furnish you a written explanation. You may ask for copies of the documents used in their investigation.

Their disclaimer: “These procedures and our liability as described above, apply to you if the account from which you make your payment(s) is an account that you use primarily for personal, family or household purposes.” – – This assumes payments made from business accounts will not be processed using the same procedures.

Related Articles:

Federal Tax Payment Options – (holtpros.wordpress.com)

Business Owner Alert

Business owners, plan your cash flow needs and deposits accordingly!

The next holiday is Monday, October 8, in celebration of Columbus Day. Banks and government offices will be closed in observance.

%d bloggers like this: