‘Annual Minutes Requirement Statement’ Scam

The Secretary of State’s office has issued a warning of a new scam. This scam involves “Compliance Services” faxing or mailing solicitations titled “Annual Minutes Requirement Statement” to business entities located in North Carolina. These solicitations contain an offer to process the corporation’s meeting minutes on behalf of the corporation for a fee of $125.00. The Secretary of State’s office notes that “North Carolina business entities are not required by law to file corporate minutes with the North Carolina Secretary of State's Office”. This solicitation is not affiliated with the Secretary of State’s office or any other governmental agency. To view an example of the solicitation, visit the Secretary of State’s website.

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

 

 

Higher Limits for HSA Contributions in 2014

The Internal Revenue Service has announced that higher limits will be allowed on contributions to health savings accounts (HSAs) and for out-of-pocket costs under high-deductible health plans (HDHPs) linked with them. A chart comparing the costs between 2013 and 2014 is shown below. 

Contribution and Out-of-Pocket Limits for Health Savings Accounts and for High-Deductible Health Plans
	For 2014	For 2013
HSA contribution limit (employer + employee)	Individual: $3,300 Family: $6,550	Individual: $3,250 Family: $6,450	Individual: +$50 Family: +100
HSA catch-up contributions (age 55 or older)*	$1,000	$1,000	No change**
HDHP minimum deductibles	Individual: $1,250 Family: $2,500	Individual: $1,250 Family: $2,500	No change
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums)	Individual: $6,350 Family: $12,700	Individual: $6,250 Family: $12,500	Individual: +$100 Family: +$200
* Catch-up contributions can be made any time during the year in which the HSA participant turns 55. ** Unlike other limits, the HSA catch-up contribution amount is not indexed; any increase would require statutory change.

The increases from 2013 to 2014 are not as high as the increases between 2012 and 2013, which indicates a lower inflation rate. The contribution limit increases from 2012 to 2013 were $150 for individual coverage and $200 for family plans. The maximum out-of-pocket increases were $200 for individuals and $400 for families. And in case you were not aware, they are penalties for using your HSA funds for nonmedical expenses. If you are under the age 65 (unless completely disabled) and have used your HSA funds for nonqualified medical expenses, you will face a penalty of 20% of the funds used for that nonqualified expense. Funds spent on nonqualified expenses are also subject to income tax.

If you have an adult child on your healthcare plan, you may not be allowed to use HSA funds to pay for that child’s medical expenses. A good rule of thumb to follow is that if you cannot claim the child on your tax return, then you cannot use your HSA funds for that child either. According to the Internal Revenue Service, a dependent is a qualifying child who has the same principal residence as the taxpayer for more than half of a taxable year, has not provided more than one half of his or her own support during the taxable year, and is not yet 19 (for students, 24) at the end of the tax year, or the child is permanently and totally disabled.

If you have any questions about your Health Savings Account, please contact us!

 

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

 

Outlook on Housing for 2014

2013 was a relatively good year for housing, as prices were increasing, and fewer homeowners were struggling with negative equity. 2014 is set to be mostly a good year as well, as the economy improves and construction resumes. Forbes has compiled a list of the ten things housing experts expect to see in 2014.

1.      More homes will be available.

2.      Mortgage rates will rise.

3.      Mortgages will be easier to get.

4.      Home prices will rise 3%.

5.      Fewer homeowners will be underwater.

6.      Affordability will decline.

7.      Ownership will decline.

8.      Americans will move.

9.      Foreclosures will fade.

10.  Home buying process will be less crazed.

To read the full article from Forbes, click here. If you have any questions please, contact us!

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

Home Office Deductions-A Simplified Method

The Internal Revenue Service has introduced a new, simplified method for taxpayers to use when calculating their home office deductions. The new simplified option allows you to deduct $5 per every square foot, with the maximum square footage of the home office being 300 square feet, for a maximum deduction of $1,500. Through this simple option, there is no need to identify or calculate the actual expenses that will be attributed to the home office.

The simplified deduction is much easier to calculate than the older expense method, which involves filling out Form 8829 and listing each and every expense calculated from your monthly expenses for the home.

Whichever option you decide to pursue, there are requirements that must be met.

·         There must be a room in your home that is dedicated exclusively to work. This space cannot be shared for other purposes. This room must be regularly used exclusively for work purposes.

·         Your home office must be the only work place you have. If you have an office outside of your home where you can work, you will not qualify for this deduction.

·         If you receive reimbursement from your employer or an expense allowance for your home office, you are not eligible.

The simplified deduction requires less time and effort than the traditional method, but may produce a lower amount available for deductions.

Linked below are websites with more information regarding the options for calculating home office deduction:

http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Simplified-Option-for-Home-Office-Deduction

http://www.aicpa.org/Publications/TaxAdviser/2013/August/Pages/morrow_Aug-2013.aspx

If you have any questions about home office deductions and your options, please contact us.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

Is Your Christmas Gift Taxable?

Exchanging gifts is one of the fun traditions of Christmas, but do you need to report the gifts you received on your tax return? Chances are, most of the Christmas gifts you gave or received do not need to be listed on any tax return. Only gifts with a combined value in excess of $14,000 may need to be reported. If you gave more than $14,000 worth of gifts, to one recipient during 2013, you will need to report it to the Internal Revenue Service on a 2013 gift tax return. But, if you receive gifts worth more than $14,000 from one individual, then the giver of the gift needs to report it on his/her gift tax return. Gifts from individuals under the yearly amount of $14,000 do not need to be reported. Gifts from your employer on the other hand, are a different story. Any gift, whether cash or goods, needs to be reported on the employer’s payroll tax reports. Cash gifts (actual cash, gift cards, bonuses) are treated as income and will need to be included on your W-2. If your employer gives an actual gift, the value of the gift needs to be reported as income on your W-2. If you have any questions about taxable gifts you may have given or received, contact us and we will be happy to assist you!

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

First-class Stamps Price Increases for 2014

The Post Regulatory Commission has approved a price increase of 3 cents for first-class stamps, bringing the price up to 49 cents a stamp. The cost of first-class stamps will still be 46 cents until the new price goes into effect on January 26^th, 2014. The price increase was approved as the Postal Service suffered a mail decrease since the 2008 economic downturn. USA Today notes that the “Postal Service is an independent agency that does not depend on tax money for its operations but is subject to congressional control. Under federal law, it can't raise prices more than the rate of inflation without approval from the commission”.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

Are Store Credit Cards a Good Idea?

Almost every store you shop at advertises a credit card, but is it a good idea to open an account at your favorite retail location? As with any credit card, there are pros and cons when considering opening a store credit card. The disadvantages of opening a store credit card are that the rewards are not as great as regular credit cards, store cards have higher APRs, and store cards can encourage you to spend outside of your budget as they lure you with deals and coupons. Another disadvantage to consider when opening a store credit card is that most store cards have lower credit limits than regular credit cards, which will cause you to use a higher percentage of your available credit. Using a high percentage of your available credit increases your credit utilization, which can possibly hurt your credit score. Although the disadvantages should be considered, there are some benefits to opening a store card as well. The benefits of these cards are that they can help build credit, store cardholders may receive special perks (free gift wrapping, free shipping, etc.), and many store cards offer cash back rewards. To get the best bang for your buck, experts recommend opening retail credit cards only at stores that you shop at often to receive the benefits advertised, and to try to pay the card’s balance in full every month. For a full review of store credit cards, visit the Card Watchdog website.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

IRS Announces Tax Season Start Date

The Internal Revenue Service announced on December 18^th that the official start date for the 2014 tax season is January 31^st. Much speculation was held over when the official start to the season would be after the government shutdown in October delayed many of the Internal Revenue Service’s functions. The 2014 tax season was originally slated to begin on January 21^st, but has been pushed back to January 31^st, which is one day later than the season began in 2013. The Internal Revenue Service has warned that it will not process any returns before the official start date. If you have any questions about the upcoming tax season, please contact us.

518 Arbor Hill Rd.

 Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com