SMEED CPA, Inc | 201 Sand Creek Road, Suite F | Brentwood, CA 94513 | Phone: 925-634-2344


       

 

 

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This Month's Feature Articles

 

- Traditional IRAs vs. Roth IRAs
 

- Tax Tips for Those Affected By Natural Disasters
 

- Business Entertainment Expenses
 

- Preparing an Effective Business Plan


- Identity Theft: What to Watch out for and What to do

 

Tax Tips

 

- Who Can Represent You Before the IRS?
 

- Ten Key Tax Facts about Home Sales
 

- Virtual Currency Treated as Property for Tax Purposes
 

- Understanding the Gift Tax
 

- Keep Track of Miscellaneous Deductions

 


 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

   

Traditional IRAs vs. Roth IRAs


 

Two types of IRAs are available to fund your retirement: Traditional IRAs and Roth IRAs.

 

While both are subject to many of the same rules there are several important differences. It's important to understand these differences because the type of individual retirement account (IRA) you choose can significantly impact your financial future and that of your family.

Who Can Contribute to an IRA?

Any person with income from wages or self-employment can contribute to an IRA (either traditional or Roth)--including children as long as they meet the income conditions. Individuals can contribute up to $5,500 in 2017. A catch-up contribution of $1,000 is allowed for anyone over the age of 50, for a total contribution of $6,500. Contributions are also allowed for stay-at-home spouses (up to $5,500 in 2017) as long as the couple's wages or self-employment earnings total at least $11,000.
 

You cannot contribute to a traditional IRA if you are age 70 1/2 or older even if you (or your spouse, if filing jointly) have taxable compensation. You can, however, make contributions to your Roth IRA after you reach age 70 1/2.

 

Income Limits

A traditional IRA does not have income limits; however, contributions to a Roth IRA might be limited based on your filing status and income.

For example, in 2017, if you file a joint return with your spouse, you cannot contribute to a Roth IRA if your income (AGI or adjusted gross income) is more than $196,000. However, you may be able to contribute a reduced amount if your income is greater than $186,000 but less than $196,000. For income below $186,000, you may contribute up to $5,500 ($6,500 if age 50 or older) or your taxable compensation for the year if your compensation was less than this dollar limit. To figure the reduced amount you can contribute, use the worksheet in Publication 590-A, Contributions to Individual Retirement Accounts (IRAs). Please call if you need assistance figuring this out this amount.

Tax Treatment

Taxable Income

Contributions to a traditional IRA are made pre-tax. As such, they lower your taxable income, which could enable you to take advantage of tax breaks you might not otherwise qualify for with a higher income.

Contributions to Roth IRAs are made after-tax (i.e. you've already paid the tax) and do not lower your pre-tax income. Unlike a traditional IRA, however, you will owe no tax on income from withdrawals made during your retirement.

Withdrawals before Age 59 1/2

Withdrawals from a traditional IRA that are made before the age of 59 1/2 are subject to an early withdrawal penalty. There are, however, several exemptions that allow you to use the funds but waive the penalty. These include: Using IRA funds to purchase your first home (up to $10,000) and using funds to offset qualified higher education expenses, health insurance premiums while unemployed, and unreimbursed medical expenses in excess of 10 percent AGI.

Withdrawals from Roth IRAs may be taken out penalty and tax-free before age 59 1/2 as long as they are contributions (not earnings). Withdrawals that are earnings are subject to the same 10 percent penalty tax as traditional IRAs. There is an exception for qualified first-time home-buyers: A maximum of $10,000 of Roth IRA earnings may be withdrawn penalty-free to pay for qualified first-time home-buyer expenses as long as at least five tax years have passed since your initial contribution.

Withdrawals after Age 59 1/2

Once you reach age 59 1/2, you may begin taking distributions. While you are not required to take distributions at this age, you must start taking distributions by April 1 following the year in which you turn age 70 1/2 and by December 31 of later years. With a traditional IRA, any deductible contributions and earnings that are withdrawn (typically referred to as distributions when you retire) are considered taxable income. Income from Roth IRA distributions is generally tax-free and unlike a traditional IRA, there is no age requirement for distributions from a Roth IRA.

 

Summary


If you have any questions about traditional or Roth IRAs, don't hesitate to call.  Help is just a phone call away at 925-634-2344

 


 

SMEED CPA Adds Financial Services To Help Clients With Investments & Insurance Needs

So often we here at SMEED CPA are asked about financial issues that impact our clients investments and their portfolios. 

We always offered our opinion and suggestions but in order to help our clients actually execute the changes we suggest, SMEED has created a Financial Services division.

 

SMEED Financial Services, Inc. will be able to work with both individual and business clients on their investment portfolios and manage assets on their behalf.

 

SMEED Financial will include Michael Uadiale, ACA, CPA, CGMA; and Pablo Blanco who has recently joined SMEED and comes with over 18 years of financial sales and advising experience with affluent investors.

Watch your inbox and mail boxes for more specific information on services SMEED Financial Services, Inc will make available to you.

 


 

Would You Give Me Your Feedback & Testimonial on Our Hotline?

 

Hello its Michael Uadiale, CPA of SMEED CPA Inc.  Weve just installed a toll-free number that I would like for you to call and tell me how you think we are doing as your CPA firm.

 

Just dial 800-609-9006 extension 3638 and follow the instructions.  If weve done a good job please let me know.  And if we can improve on anything, please mention that too.

 


 

Help Us Be Found on Yelp & Google!

 

Also as we expand our business, we find more and more people are using YELP and Google to look for us by searching Brentwood accountant or Brentwood CPA.

 

When they do this we want to be FOUND on GOOGLE.  One way you can help us is to give us an ONLINE REVIEW on our Google Maps/Places listing --->

or check us out at our YELP local listing below.

 

Just click here to go to our Google Listing for SMEED CPA and click on the YELP link to go there.  Scroll down to the Review area.

 

On either site it may say:  Been here? Rate and review

You will click on the Rate and review link and then log in, then give us a review!

 

You can choose between 1 and 5 STARS and write in what you think about the tax or accounting work we have done for you.

 

It's that simple.  Thank you in advance for your help and cooperation!

 


 

As always you can call our offices if you have any questions about these or any other accounting related issues, at
925-634-2344. 

 

Regards, Michael Uadiale, CPA, ACA, CGMA

Managing Partner, SMEED CPA, Inc.

 
 

 

SMEED CPA, Inc | 201 Sand Creek Road, Suite F | Brentwood, CA 94513
The Next Frontier CPA Firm | www.SmeedCPA.com | info@smeedcpa.com
Phone: 925-634-2344 | Fax: 925-634-2346