Philip Schreiber, CPA | Schreiber Advisors, PC | 14801 Southfield Rd | Allen Park, MI 48101 | 313-388-0300 | phil@cpatechs.com

       

 

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Philip Schreiber, CPA

Schreiber Advisors, PC.

 


 

 

 

Other Articles

Click on this Link to Access These & Other Past Articles


 

- Seniors age 70 1/2+ & Supersizing your charitable contribution deductions

- Individual Year End Tax Planning Ideas & Eight Tips for Deducting Charitable Contributions

- Tax Calendar & Simple Tax Savings Techniques

- Weddings Mean Tax Changes & Small Business Resources

- Federal Income Tax Withholding Adjustment

- Midyear Tax Planning Ideas & IRS Warns Taxpayers to Beware of Phishing

 

- Required Health Insurance for 2014 & 2015 HSA Amounts

 


 

 

Yes, Still Time to Make Your IRA Contribution + 7 Tips to See if Your Gift is Taxable + Tax Preparer Hiring Guide (click here)

 

Did you contribute to an Individual Retirement Arrangement last year? Are you thinking about contributing to your IRA now? If so, you may have questions about IRAs and your taxes. Here are some IRS tax tips about saving for retirement using an IRA.

Age rules. You must be under age 70 at the end of the tax year in order to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.

Compensation rules. You must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. It also includes tips, commissions, bonuses and alimony. If you are married and file a joint tax return, only one spouse needs to have compensation in most cases.

When to contribute. You can contribute to an IRA at any time during the year. To count for 2014, you must contribute by the due date of your tax return. This does not include extensions. That means most people must contribute by April 15, 2015. If you contribute between Jan. 1 and April 15, make sure your plan sponsor applies it to the year you choose (2014 or 2015).

Contribution limits. In general, the most you can contribute to your IRA for 2014 is the smaller of either your taxable compensation for the year or $5,500. If you were age 50 or older at the end of 2014, the maximum you can contribute increases to $6,500. If you contribute more than these limits, an additional tax will apply. The added tax is 6 percent of the excess amount that you contributed.

Taxability rules. You normally won't pay income tax on funds in your traditional IRA until you start taking distributions from it. Qualified distributions from a Roth IRA are tax-free.

Deductibility rules. You may be able to deduct some or all of your contributions to your traditional IRA. Use the worksheets in the Form 1040A or Form 1040 instructions to figure the amount that you can deduct. You may claim the deduction on either form. You may not deduct contributions to a Roth IRA.

Saver's Credit. If you contribute to an IRA you may also qualify for the Saver's Credit. The credit can reduce your taxes up to $2,000 if you file a joint return. Use Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit. You can file Form 1040A or 1040 to claim the Saver's Credit.

If you found this Tax Tip helpful, please share or forward it with your friends & family.
 



7 Tips to Help You Determine if Your Gift is Taxable...

If you gave money or property to someone as a gift, you may wonder about the federal gift tax. Many gifts are not subject to the gift tax. Here are seven tax tips about gifts and the gift tax.

1. Nontaxable Gifts. The general rule is that any gift is a taxable gift. However, there are exceptions to this rule. The following are not taxable gifts:

- Gifts that do not exceed the annual exclusion for the calendar year,
- Tuition or medical expenses you paid directly to a medical or educational institution for someone,
- Gifts to your spouse (for federal tax purposes, the term "spouse" includes individuals of the same sex who are lawfully married),
- Gifts to a political organization for its use, and
- Gifts to charities.

2. Annual Exclusion. Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse or to a charity. If you give a gift to someone else, the gift tax usually does not apply until the value of the gift exceeds the annual exclusion for the year. For 2014 and 2015, the annual exclusion is $14,000.

3. No Tax on Recipient. Generally, the person who receives your gift will not have to pay a federal gift tax. That person also does not pay income tax on the value of the gift received.

4. Gifts Not Deductible. Making a gift does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than deductible charitable contributions).

5. Forgiven and Certain Loans. The gift tax may also apply when you forgive a debt or make a loan that is interest-free or below the market interest rate.

6. Gift-Splitting. You and your spouse can give a gift up to $28,000 to a third party without making it a taxable gift. You can consider that one-half of the gift be given by you and one-half by your spouse.

7. Filing Requirement. You must file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, if any of the following apply:

- You gave gifts to at least one person (other than your spouse) that amount to more than the annual exclusion for the year.
- You and your spouse are splitting a gift. This is true even if half of the split gift is less than the annual exclusion.
- You gave someone (other than your spouse) a gift of a future interest that they can't actually possess, enjoy, or from which they'll receive income later.
- You gave your spouse an interest in property that will terminate due to a future event.
- For more information, see Publication 559, Survivors, Executors, and Administrators. You can view, download and print tax products on IRS.gov/forms anytime.

If you found this Tax Tip helpful, please share or forward it with your friends & family.  Remember you can call our offices if you have any questions about these or any other accounting, tax, financial planning or insurance related issues, at 313-388-0300.

 

Regards, Philip Schreiber, CPA

Schreiber Advisors, PC

 

Philip Schreiber, CPA | Schreiber Advisors, PC | Certified Public Accountants
14801 Southfield Rd | Allen Park, MI 48101 | 313-388-0300 | phil@cpatechs.com | www.detroit-cpa.net

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