Understanding Your IRA (Individual Retirement Account) : A Quick Guide

It’s never too early to begin preparing for your retirement. One of the best ways to prepare for your retirement is to set up an Individual Retirement Account, also known as an IRA.

 

The purpose of an IRA is to serve as a tax-qualified personal retirement savings plan. Anyone who works can set aside a set amount in an IRA, whether they work for themselves or someone else, with the earnings on their investments tax-deferred until the date of distribution. In addition to tax deferral, certain individuals are permitted to deduct all or part of their contributions to their IRA. And as of 1998, certain individuals can also set up Roth IRAs, to which contributions are not deductible, but from which withdrawals at retirement are tax free withdrawals.

 

It isn’t hard to set up an IRA. An IRA can be established and a contribution made after the end of the first year. A deductible contribution can be made no later than the due date for filing the income tax return for that year, not including extensions; this generally means that you have until April 15th of the following year to make a contribution make the deduction on your tax return.  So as of today, you still have another month to make 2013 IRA contributions.

 

As of 2013, the most you can contribute to an IRA in any single year is $5,500. Individuals aged 50 and older will also be allowed to make additional $1,000 catch-up contributions annually, to help them save more for retirement, so you could contribute up to $6,500. The same limits apply to those with more than one IRA, or more than one type of IRA. For example, when both you and your spouse have compensation, you can each contribute the maximum, or a total of $11,000 ($13,000 if you are both age 50 or more). You don’t have to contribute the maximum every year, and you can skip a year or even several years. But when you resume making contributions, the maximum still applies—you can’t contribute extra money to make up for years when you didn’t contribute. If you do contribute more than the allowed amount, a six percent excise tax penalty will be assessed.

 

No contributions may be made to an inherited IRA, in a form other than cash, or during or after the year in which you reach age 70 ½.  You must begin taking distributions from an IRA no later than April 1st of the year following the year, or the year in which you retire, whichever comes later.

 

Remember, this was a brief and general introduction to Individual Retirement Accounts. The rules are slightly different for Roth IRAs, which have their own contribution and distribution limitations.

 

You can learn more about IRAs online from the Internal Revenue Service here: http://www.irs.gov/taxtopics/tc451.html

 

If you have any questions or need any assistance in finding a suitable investment or place for your IRA contributions please don’t hesitate to give me a call.  I would be happy to assist you in setting up your IRA and building for your retirement.

Understanding Your IRA (Individual Retirement Account) : A Quick Guide

 

It’s never too early to begin preparing for your retirement. One of the best ways to prepare for your retirement is to set up an Individual Retirement Account, also known as an IRA.

 

The purpose of an IRA is to serve as a tax-qualified personal retirement savings plan. Anyone who works can set aside a set amount in an IRA, whether they work for themselves or someone else, with the earnings on their investments tax-deferred until the date of distribution. In addition to tax deferral, certain individuals are permitted to deduct all or part of their contributions to their IRA. And as of 1998, certain individuals can also set up Roth IRAs, to which contributions are not deductible, but from which withdrawals at retirement are tax free withdrawals.

 

It isn’t hard to set up an IRA. An IRA can be established and a contribution made after the end of the first year. A deductible contribution can be made no later than the due date for filing the income tax return for that year, not including extensions; this generally means that you have until April 15th of the following year to make a contribution make the deduction on your tax return.  So as of today, you still have another month to make 2013 IRA contributions.

 

As of 2013, the most you can contribute to an IRA in any single year is $5,500. Individuals aged 50 and older will also be allowed to make additional $1,000 catch-up contributions annually, to help them save more for retirement, so you could contribute up to $6,500. The same limits apply to those with more than one IRA, or more than one type of IRA. For example, when both you and your spouse have compensation, you can each contribute the maximum, or a total of $11,000 ($13,000 if you are both age 50 or more). You don’t have to contribute the maximum every year, and you can skip a year or even several years. But when you resume making contributions, the maximum still applies—you can’t contribute extra money to make up for years when you didn’t contribute. If you do contribute more than the allowed amount, a six percent excise tax penalty will be assessed.

 

No contributions may be made to an inherited IRA, in a form other than cash, or during or after the year in which you reach age 70 ½.  You must begin taking distributions from an IRA no later than April 1st of the year following the year, or the year in which you retire, whichever comes later.

 

Remember, this was a brief and general introduction to Individual Retirement Accounts. The rules are slightly different for Roth IRAs, which have their own contribution and distribution limitations.

 

You can learn more about IRAs online from the Internal Revenue Service here: http://www.irs.gov/taxtopics/tc451.html

 

If you have any questions or need any assistance in finding a suitable investment or place for your IRA contributions please don’t hesitate to give me a call.  I would be happy to assist you in setting up your IRA and building for your retirement.

Understanding Your IRA (Individual Retirement Account) : A Quick Guide

It’s never too early to begin preparing for your retirement. One of the best ways to prepare for your retirement is to set up an Individual Retirement Account, also known as an IRA.

The purpose of an IRA is to serve as a tax-qualified personal retirement savings plan. Anyone who works can set aside a set amount in an IRA, whether they work for themselves or someone else, with the earnings on their investments tax-deferred until the date of distribution. In addition to tax deferral, certain individuals are permitted to deduct all or part of their contributions to their IRA. And as of 1998, certain individuals can also set up Roth IRAs, to which contributions are not deductible, but from which withdrawals at retirement are tax free withdrawals.

It isn’t hard to set up an IRA. An IRA can be established and a contribution made after the end of the first year. A deductible contribution can be made no later than the due date for filing the income tax return for that year, not including extensions; this generally means that you have until April 15th of the following year to make a contribution make the deduction on your tax return.  So as of today, you still have another month to make 2013 IRA contributions.

As of 2013, the most you can contribute to an IRA in any single year is $5,500. Individuals aged 50 and older will also be allowed to make additional $1,000 catch-up contributions annually, to help them save more for retirement, so you could contribute up to $6,500. The same limits apply to those with more than one IRA, or more than one type of IRA. For example, when both you and your spouse have compensation, you can each contribute the maximum, or a total of $11,000 ($13,000 if you are both age 50 or more). You don’t have to contribute the maximum every year, and you can skip a year or even several years. But when you resume making contributions, the maximum still applies—you can’t contribute extra money to make up for years when you didn’t contribute. If you do contribute more than the allowed amount, a six percent excise tax penalty will be assessed.

No contributions may be made to an inherited IRA, in a form other than cash, or during or after the year in which you reach age 70 ½.  You must begin taking distributions from an IRA no later than April 1st of the year following the year, or the year in which you retire, whichever comes later.

Remember, this was a brief and general introduction to Individual Retirement Accounts. The rules are slightly different for Roth IRAs, which have their own contribution and distribution limitations.

You can learn more about IRAs online from the Internal Revenue Service here: http://www.irs.gov/taxtopics/tc451.html

If you have any questions or need any assistance in finding a suitable investment or place for your IRA contributions please don’t hesitate to give me a call.  I would be happy to assist you in setting up your IRA and building for your retirement.

It’s never too early to begin preparing for your retirement. One of the best ways to prepare for your retirement is to set up an Individual Retirement Account, also known as an IRA.

The purpose of an IRA is to serve as a tax-qualified personal retirement savings plan. Anyone who works can set aside a set amount in an IRA, whether they work for themselves or someone else, with the earnings on their investments tax-deferred until the date of distribution. In addition to tax deferral, certain individuals are permitted to deduct all or part of their contributions to their IRA. And as of 1998, certain individuals can also set up Roth IRAs, to which contributions are not deductible, but from which withdrawals at retirement are tax free withdrawals.

It isn’t hard to set up an IRA. An IRA can be established and a contribution made after the end of the first year. A deductible contribution can be made no later than the due date for filing the income tax return for that year, not including extensions; this generally means that you have until April 15th of the following year to make a contribution make the deduction on your tax return.  So as of today, you still have another month to make 2013 IRA contributions.

As of 2013, the most you can contribute to an IRA in any single year is $5,500. Individuals aged 50 and older will also be allowed to make additional $1,000 catch-up contributions annually, to help them save more for retirement, so you could contribute up to $6,500. The same limits apply to those with more than one IRA, or more than one type of IRA. For example, when both you and your spouse have compensation, you can each contribute the maximum, or a total of $11,000 ($13,000 if you are both age 50 or more). You don’t have to contribute the maximum every year, and you can skip a year or even several years. But when you resume making contributions, the maximum still applies—you can’t contribute extra money to make up for years when you didn’t contribute. If you do contribute more than the allowed amount, a six percent excise tax penalty will be assessed.

No contributions may be made to an inherited IRA, in a form other than cash, or during or after the year in which you reach age 70 ½.  You must begin taking distributions from an IRA no later than April 1st of the year following the year, or the year in which you retire, whichever comes later.

Remember, this was a brief and general introduction to Individual Retirement Accounts. The rules are slightly different for Roth IRAs, which have their own contribution and distribution limitations.

You can learn more about IRAs online from the Internal Revenue Service here: http://www.irs.gov/taxtopics/tc451.html

If you have any questions or need any assistance in finding a suitable investment or place for your IRA contributions please don’t hesitate to give me a call.  I would be happy to assist you in setting up your IRA and building for your retirement.

It’s never too early to begin preparing for your retirement. One of the best ways to prepare for your retirement is to set up an Individual Retirement Account, also known as an IRA.

The purpose of an IRA is to serve as a tax-qualified personal retirement savings plan. Anyone who works can set aside a set amount in an IRA, whether they work for themselves or someone else, with the earnings on their investments tax-deferred until the date of distribution. In addition to tax deferral, certain individuals are permitted to deduct all or part of their contributions to their IRA. And as of 1998, certain individuals can also set up Roth IRAs, to which contributions are not deductible, but from which withdrawals at retirement are tax free withdrawals.

It isn’t hard to set up an IRA. An IRA can be established and a contribution made after the end of the first year. A deductible contribution can be made no later than the due date for filing the income tax return for that year, not including extensions; this generally means that you have until April 15th of the following year to make a contribution make the deduction on your tax return.  So as of today, you still have another month to make 2013 IRA contributions.

As of 2013, the most you can contribute to an IRA in any single year is $5,500. Individuals aged 50 and older will also be allowed to make additional $1,000 catch-up contributions annually, to help them save more for retirement, so you could contribute up to $6,500. The same limits apply to those with more than one IRA, or more than one type of IRA. For example, when both you and your spouse have compensation, you can each contribute the maximum, or a total of $11,000 ($13,000 if you are both age 50 or more). You don’t have to contribute the maximum every year, and you can skip a year or even several years. But when you resume making contributions, the maximum still applies—you can’t contribute extra money to make up for years when you didn’t contribute. If you do contribute more than the allowed amount, a six percent excise tax penalty will be assessed.

No contributions may be made to an inherited IRA, in a form other than cash, or during or after the year in which you reach age 70 ½.  You must begin taking distributions from an IRA no later than April 1st of the year following the year, or the year in which you retire, whichever comes later.

Remember, this was a brief and general introduction to Individual Retirement Accounts. The rules are slightly different for Roth IRAs, which have their own contribution and distribution limitations.

You can learn more about IRAs online from the Internal Revenue Service here: http://www.irs.gov/taxtopics/tc451.html

If you have any questions or need any assistance in finding a suitable investment or place for your IRA contributions please don’t hesitate to give me a call.  I would be happy to assist you in setting up your IRA and building for your retirement.

Understanding Your IRA (Individual Retirement Account) : A Quick Guide

It’s never too early to begin preparing for your retirement. One of the best ways to prepare for your retirement is to set up an Individual Retirement Account, also known as an IRA.

The purpose of an IRA is to serve as a tax-qualified personal retirement savings plan. Anyone who works can set aside a set amount in an IRA, whether they work for themselves or someone else, with the earnings on their investments tax-deferred until the date of distribution. In addition to tax deferral, certain individuals are permitted to deduct all or part of their contributions to their IRA. And as of 1998, certain individuals can also set up Roth IRAs, to which contributions are not deductible, but from which withdrawals at retirement are tax free withdrawals.

It isn’t hard to set up an IRA. An IRA can be established and a contribution made after the end of the first year. A deductible contribution can be made no later than the due date for filing the income tax return for that year, not including extensions; this generally means that you have until April 15th of the following year to make a contribution make the deduction on your tax return.  So as of today, you still have another month to make 2013 IRA contributions.

As of 2013, the most you can contribute to an IRA in any single year is $5,500. Individuals aged 50 and older will also be allowed to make additional $1,000 catch-up contributions annually, to help them save more for retirement, so you could contribute up to $6,500. The same limits apply to those with more than one IRA, or more than one type of IRA. For example, when both you and your spouse have compensation, you can each contribute the maximum, or a total of $11,000 ($13,000 if you are both age 50 or more). You don’t have to contribute the maximum every year, and you can skip a year or even several years. But when you resume making contributions, the maximum still applies—you can’t contribute extra money to make up for years when you didn’t contribute. If you do contribute more than the allowed amount, a six percent excise tax penalty will be assessed.

No contributions may be made to an inherited IRA, in a form other than cash, or during or after the year in which you reach age 70 ½.  You must begin taking distributions from an IRA no later than April 1st of the year following the year, or the year in which you retire, whichever comes later.

Remember, this was a brief and general introduction to Individual Retirement Accounts. The rules are slightly different for Roth IRAs, which have their own contribution and distribution limitations.

You can learn more about IRAs online from the Internal Revenue Service here: http://www.irs.gov/taxtopics/tc451.html

If you have any questions or need any assistance in finding a suitable investment or place for your IRA contributions please don’t hesitate to give me a call.  I would be happy to assist you in setting up your IRA and building for your retirement.

Do You Need An Accountant?

Do You Need An Accountant?
An Accountant, or CPA, can help you make sure that your small business accounting or individual tax returns are accurate and complete.

Some businesses, like home-based businesses, may not be large or intricate enough to need a CPA to assist with their accounting. However, it’s important to recognize when you need one.

When You Might Need A CPA

 

Record Keeping

When you’re running a business of any size, you will need to keep consistent, effective and clear records. This will allow investors to see how well your business is doing, which can lead to further backing to help your business grow. Your financial statements and reports are the documents that most banks and investors will want to see before making their financing decisions, and reports prepared by an Accountant can be a valuable asset.

 

Accounting and Taxes

If you are starting up a small or home-based business, a CPA can help you set up a double-entry method of accounting with a journal and ledger, as well as a chart of accounts to help you use these tools effectively.  Quarterly taxes are often required of businesses and self-employed individuals, and an Accountant can inform you of what taxes you will be responsible for paying throughout the year. To avoid penalties, late fees, and a hefty annual tax bill, you should consider contacting a CPA.

 

Self-employed individuals or anyone else for that matter, should also consider the services of a CPA when it comes time for tax preparation. Taxation laws change every year, and a CPA can help make sure that you are receiving all of the deductions available to you.

 

You might also want to consider a CPA if you are an individual with children, who is separated or newly divorced, or who may wish to itemize deductions based on mortgages, medical expenses, and charitable contributions.  Taxation laws are complex and subject to frequent change, and mistakes can be easy to make if your itemization is somewhat complex.

 

Discovering and Correcting Errors

Sometimes, when you have a small business, you may discover that there’s an error in your bookkeeping but not be able to immediately locate the mistake or discrepancy. It is important to locate and correct such errors, because your business books are used to determine your tax and business decisions. A CPA has special education and training that can help them assist you in this type of situation, through an external audit process.

 

For individuals, errors on your return can lead to you losing money or incurring penalties. Additionally, if you fail to claim a deduction for which you were eligible, the IRS will not correct the mistake on your behalf. The best way to correct errors, or avoid them before they happen, is to consult an Accountant.

 

I Can Help!

An Accountant is an inexpensive way to receive professional assistance with your tax returns and bookkeeping. A CPA can help you avoid or correct mistakes and lead to more money for you or your business. If you’d like to use an Accountant and need assistance in finding one, I would be happy to recommend one in your area. Feel free to contact me any time!

Happy Holidays!

As 2013 draws to a close, I hope you and your loved ones are enjoying the holidays safely. I appreciate the opportunity to play a role in helping you protect yourself and your loved ones with all of your financial needs, and look forward to helping keep them safe in 2014. Once the New Year kicks in, keep in mind to check in with me for tips on how to make your finances run smoothly and protect your loved ones and assets. In the meantime, enjoy the holidays in style!

7 Common Mistakes of Estate Planning

Planning your estate isn’t an enjoyable job. But if you want to efficiently and successfully transfer all of your assets to those you leave behind, planning is a must!  With a bit of forward thinking, your heirs can avoid having to pay estate taxes and federal taxes on your assets.  A well-planned estate also can help prevent confusion among your loved ones.

 

Despite all the advantages of estate planning, many people make mistakes in the process. The following seven mistakes often put families into great difficulty after a loved one’s passing.

 

  • Thinking that estate planning is just for the rich.  Don’t fall into this trap! Planning one’s estate is essential for anyone with assets to leave behind, not just the wealthy.  Many people underestimate how large their estate actually is. It’s common, for example, to fail to take into account assets from the home such as painting, furniture and electronics.

 

  • Not reviewing and updating your will. Remember to update your will, and review it at least once every two years.  Factors that can change information about your beneficiaries include deaths, birth, divorce and adoption.  Changes in your family structure might lead to changes in your assets and who you want to leave them to.

 

  • Assuming that taxes paid on your assets are set in stone. Talk to your CPA or contact myself about ways that your beneficiaries can avoid paying taxes on your assets.  There are several strategies for tax planning so that can help you minimize taxes or avoid them altogether.

 

  • Not keeping your financial papers in order. You should keep good records, and your paperwork should be in order and easy for loved ones to find.  Make sure one of your loved ones has easy access to information necessary for planning after your death. A list of account numbers and financial institution phone numbers is also a big help.

 

  • Leaving everything to your partner.  When you leave all of your assets to your spouse, you’re actually sacrificing their portion of the benefit.  You’ll get an estate tax credit, but will forfeit part of this if your spouse is your only beneficiary.

 

  • Failing to ensure that your children are well planned for. Many people take a lot of time deciding what to do with their assets, and they forget that they need to appoint guardianship for their children.  There are many details to think about when it comes to guardianship, and it’s something that should be given proper and careful consideration.

 

  • Not using an Estate Planner or Financial Advisor.  Planners and Advisors are trained intimately in matters of estate planning, and can provide asset protection.

 

Remember, the most common mistake when it comes to estate planning is not getting around to it at all.  Make sure you take the time to plan at least the financial portion of your estate, so your loved ones are left with some sense of security.  Take the time to plan for your passing, even if you think that you have years before it becomes an issue. The key to successful estate planning is being prepared!

 

4 Quick Tips For Building A Successful Portfolio

Navigating the complex world of finance can be a challenge.  The ins and outs of stocks, bonds, mutual funds and other investments can be a lot to understand.  Recent research shows that investors continue to grapple with some of the most basic investment concepts, suggesting a greater need for financial advice and guidance.  The following tips should be considered to help you build a profitable portfolio.

1) Know your goals – Consider your vision for your future, and how much money you’ll need to fund it. Whether it’s for your children’s education, funds you would like left to your beneficiaries, or your own retirement, set your goals and develop a concrete plan for achieving them.

2) Define your investment time horizon – If you’re not planning on retiring anytime soon, you might want a portfolio that includes more long-term investments.  If you’re planning to retire sooner, consider a more conservative approach.

3) Determine your risk tolerance - Figure out what level of risk you’re comfortable with, and compare that with what you’re able to afford. Generally speaking, the longer you have to invest, the bigger risk you can take.

4) Consult a professional – To avoid financial pitfalls down the road, it’s wise to seek professional guidance when putting together a portfolio.

No matter what your level of investment experience, whether you’re new to investing or just looking for a bit of advice, the more thought you put into your overall portfolio, the better off you will be in the future.  And please remember, it would be my pleasure to assist you with all of your portfolio needs.