If your child has a summer job, he or she can make a contribution to an IRA for 2017.
As a general rule, anyone can open an IRA and contribute up to the amount of their wages or self-employment earnings. There is an upper limit of $5,500 for 2017. Your child can contribute to either a traditional, deductible IRA or a nondeductible Roth IRA. For your child, who is likely to be in a low or zero tax bracket, the Roth IRA may be the better choice since qualifying withdrawals will be tax-free.
Consider this: A one-time contribution to an IRA can grow dramatically. A single deposit of $3,000, for example, will grow to over $34,000 if invested at 5 percent for 50 years.
If your child does not wish to use his or her summer earnings for a retirement fund, you or a grandparent can help out. As long as the amount put into the IRA does not exceed the child's wages, it doesn't matter where the money comes from.
If this is an affordable option for your family, your child could have a big head start in building a nest egg. Call us if you have questions.
If you changed your name for any reason during the past year, you will need to file Form SS-5, Application for a Social Security Card, with the Social Security Administration (SSA) to notify them of the name change before you submit your 2017 tax return. The IRS will match the first few letters of your last name with your social security number on file with the SSA. If a mismatch occurs, there may be several potential consequences, including being denied the option to e-file your tax return. Also, the IRS may deem your income as taxable, but then disallow any deductions or they may send you a notice of taxes owed and underpayment penalties.
Here are the steps you should take to avoid this headache.
1. Before you file your 2017 tax return, complete Form SS-5, which is available at www.ssa.gov. Be prepared to provide proof of citizenship as well as documents that show your previous name and new name.
2. Double check the W-2 you received from your employer to ensure the name change was made correctly. Once verified, confirm that the SSA has been notified as well.
3 Update other important documents and accounts to reflect your name change.
If you cannot file the name change in a timely manner, use the name on file at the Social Security Administration and with your employer when you file your 2017 taxes. This will help you avoid receiving a notice of a name mismatch from the IRS.
It's midyear, and December is still a long way off - or is it? The bad news is time flies, and year-end will arrive sooner than you think. The good news is you still have time to identify opportunities to minimize your 2013 tax bill and to put plans into action.
The place to start is with an estimate of your 2013 income, sorting income into various categories such as wages, investments, retirement plan distributions, passive income, and active business income. Different tax rules apply to different kinds of income.
For instance, this year you'll pay an additional 0.9% Medicare tax on wages and self-employment income when the combined total of those items exceeds $250,000 on a joint return or $200,000 if you're filing as a single.
Two more reasons: The top tax rate on long-term capital gains is increased this year to 20% when you're in the top ordinary income tax rate (39.6%). And a 3.8% Medicare surtax may apply to net investment income, such as interest, dividends, and capital gains, if your adjusted gross income (AGI) exceeds $250,000 for couples or $200,000 for singles.
Another incentive to do an early income projection is the return this year to limits for higher-income taxpayers on personal exemptions and itemized deductions. These limits apply once your AGI exceeds $300,000 for marrieds or $250,000 for singles.
For guidance in your midyear assessment and tax-savings suggestions suited to your individual situation, contact our office. Put time on your side if you want to manage your tax bill for 2013.
Computers fill our life and our work. They faithfully accumulate our wedding pictures, our company's books, and the ceaseless emails we get and send. But, unless you back it up, all that data can be gone like a flash of lightning.
You buy insurance for your homes and businesses, because disasters happen. Think of your backups as data insurance. We don't like to think about what might happen, but good backups can make any disaster a little more survivable. All you'll have to do is setup a new computer and restore your backups.
We recently engaged the services of Office to Go (Phone 954-757-6226) to manage our backup solutions. They came out to our office, did an analysis of our backup needs and provided an estimate of costs. We were pleasantly surprised at how affordable the system is and relieved to know that we are protected in multiple ways. The cost of rebuilding data, if possible, would be enormous.
In terms of personal data such as photos we are now in the digital age. So many people are not printing pictures, just storing them. Losing your precious memories is a hard drive failure away.
How It Works
Office To Go Complete Back-Up Solution is designed to protect your critical data from permanent loss. Utilizing a standard Internet connection, your data is securely and remotely backed up.
State-of-the-art data encryption ensures your data is protected. An intuitive user interface makes setting up your backup straightforward and simple.
We don't normally recommend one product or service, but we are so pleased with their service, pricing and responsiveness that we wanted to share this with you.
We have heard so many horror stories of loss of data that we urge everyone to assess their risk and act accordingly.