Want the government to help you name your newborn? Probably not, but while reviewing the Social Security Administration's website for my previous post, I stumbled on an interesting page. The SSA maintains a list of the most popular baby names each year. I guess it makes sense, as they're the first to hear about most births.
I was pleased to discover find David still in the top 15 names!
http://www.socialsecurity.gov/OACT/babynames/
Friday, November 26, 2004
Get Paid for Working AND for Being Retired
Working While Collecting Social Security?
You can earn as much as you want once you reach full retirement age. Full retirement age is 65 for those born in 1938 and earlier (that age gradually increases to 67 for people born after 1959). An earnings limit applies for each month prior to attaining full retirement age.
If you're reaching full retirement age in 2005, you can earn $31,800 without having to repay any Social Security benefits. Exceed this limit and you'll have to repay $1 for every $3 earned above the limit. If you'll be below retirement age all year, the most you can earn is $12,000, or else you'll repay $1 of benefits for every $2 you exceed the earnings limit.
For more details on how this works, check the SSA's website.
You can earn as much as you want once you reach full retirement age. Full retirement age is 65 for those born in 1938 and earlier (that age gradually increases to 67 for people born after 1959). An earnings limit applies for each month prior to attaining full retirement age.
If you're reaching full retirement age in 2005, you can earn $31,800 without having to repay any Social Security benefits. Exceed this limit and you'll have to repay $1 for every $3 earned above the limit. If you'll be below retirement age all year, the most you can earn is $12,000, or else you'll repay $1 of benefits for every $2 you exceed the earnings limit.
For more details on how this works, check the SSA's website.
Thursday, November 25, 2004
Stop Draggin' Your Car Around...
...and donate it to charity.
Recently, we've received many questions about contributing vehicles to charity for a tax deduction. These types of contributions became more visible when they were restricted in the recent tax bill. As a result, you've got until December 31, 2004 to contribute a vehicle under the old law.
What's the difference? Through 2004, you simply claim only the fair market value of the car. Note that according to the IRS, "the fair market value may differ substantially from the car’s “Blue Book” value."
Beginning in 2005, charities will be required to let you know how much they eventually sold your car for, and that sales price will be your deduction. (There may be different results if the car is going to be used by the charity instead of resold.) The government is trying to prevent the types of situations where taxpayers deduct $2000 while the charity only receives $200 when they sell the car subsequently.
More information on the problems that caused this change.
Recently, we've received many questions about contributing vehicles to charity for a tax deduction. These types of contributions became more visible when they were restricted in the recent tax bill. As a result, you've got until December 31, 2004 to contribute a vehicle under the old law.
What's the difference? Through 2004, you simply claim only the fair market value of the car. Note that according to the IRS, "the fair market value may differ substantially from the car’s “Blue Book” value."
Beginning in 2005, charities will be required to let you know how much they eventually sold your car for, and that sales price will be your deduction. (There may be different results if the car is going to be used by the charity instead of resold.) The government is trying to prevent the types of situations where taxpayers deduct $2000 while the charity only receives $200 when they sell the car subsequently.
More information on the problems that caused this change.
Saturday, November 20, 2004
Free & Easy W-2's for Small Businesses
If you have ever prepared W-2's for your employees, you know it can be a real hassle. You've got to get the right forms, get them printed (or typed!) correctly, and remember to mail everything off in time to the government.
Want an easier way? The easiest is to hire us to prepare your forms, but if you want to do it yourself, here's a great tool.
The Social Security Administration has a great, free online system for electronically filing up to 20 W-2's. After you sign up with them, just fill out on screen the necessary W-2's. The online system will even print for you on plain paper the right forms to distribute to the employees. When you're done, a couple more clicks will file them with SSA immediately! Also, because the system will check for mismatched names and social security numbers as you're entering information, you might save yourself some love letters from the IRS down the line.
Visit the SSA's easy-to-use site at http://www.ssa.gov/bso/bsowelcome.htm.
Want an easier way? The easiest is to hire us to prepare your forms, but if you want to do it yourself, here's a great tool.
The Social Security Administration has a great, free online system for electronically filing up to 20 W-2's. After you sign up with them, just fill out on screen the necessary W-2's. The online system will even print for you on plain paper the right forms to distribute to the employees. When you're done, a couple more clicks will file them with SSA immediately! Also, because the system will check for mismatched names and social security numbers as you're entering information, you might save yourself some love letters from the IRS down the line.
Visit the SSA's easy-to-use site at http://www.ssa.gov/bso/bsowelcome.htm.
Thursday, November 18, 2004
IRS mileage rates for 2005 released
Hot off the presses are the new 2005 mileage rates, just released by the IRS. Business miles will be deductible at 40.5 cents per mile in 2005, a nice bump up from 37.5 cents in 2004. The mileage rate for medical and moving expenses will increase $.01 to $.15/mile, but the rate for charitable use will remain at $.14.
Isn't it incredible that gas prices for charitable use didn't increase at all last year?!?
Trucks vs. SUVs
A well-publicized change in the recent tax bill was the reduction of the write-off allowed for SUVs. In an effort to raise revenue and assuage the environmental lobby, Congress reduced the Section 179 deduction to $25,000 for SUVs.
This begs the question, what's an SUV? Well, for this purpose, it's any vehicle between 6,000 and 14,000 lb. GVW, except for the following:
This begs the question, what's an SUV? Well, for this purpose, it's any vehicle between 6,000 and 14,000 lb. GVW, except for the following:
- Vehicles that seat more than 9 passengers behind the driver (think shuttle vans)
- Vehicles with a separate cargo area at least six feet long. (Most full-size pickups, but possibly not some quad-cab/extended-cab or short bed trucks.)
- Delivery vans
- Ambulances, hearses, and vehicles-for-hire used to transport people or items.
Wednesday, November 17, 2004
Paying tax...means saving tax?
The New Sales Tax Deduction
You've probably heard that residents of states with no personal income tax will now be able to deduct sales tax on their returns. It sounds like they've gotten this one right, folks. The IRS will provide a table for us to use to calculate your deduction, based on household size and income level, so you don't have to keep each receipt for the year (and you definitely don't need to bring them all to your tax appointment!)
In addition to the table amounts, you'll be able to deduct sales tax on any big ticket items like cars, boats, etc. We have to leave it at "etc." for now, because the IRS hasn't yet issued their final rules detailing this deduction. Be sure to check back later for more on this new savings opportunity.
You've probably heard that residents of states with no personal income tax will now be able to deduct sales tax on their returns. It sounds like they've gotten this one right, folks. The IRS will provide a table for us to use to calculate your deduction, based on household size and income level, so you don't have to keep each receipt for the year (and you definitely don't need to bring them all to your tax appointment!)
In addition to the table amounts, you'll be able to deduct sales tax on any big ticket items like cars, boats, etc. We have to leave it at "etc." for now, because the IRS hasn't yet issued their final rules detailing this deduction. Be sure to check back later for more on this new savings opportunity.
Tuesday, November 16, 2004
A daily piece of our mind
Welcome to our new tax and business tips blog! We'll try to keep you up to date with potential or enacted changes in the tax law, and we'll explain how they apply to you. Also look for general business advice and tax planning ideas to help you save money.
Check back often for our latest thoughts and additions!
Check back often for our latest thoughts and additions!
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