How To Not Be Fool…about Your Taxes!

By Author: lorraine conaway
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The deadline for taxes is April 17th this year, so don’t be a fool and file early. Don’t want to? Well, there are still some things you can do before you file. One thing you can do is a simple IRA plan, which is an IRA-based plan that gives small business employers a simplified method to make contributions toward their employees’ retirement and their own retirement.

Let’s take a look at some basic IRA rules.

1 - It must be funded by the time you file your taxes in order to claim the refund for that year’s taxes.

2 - $5,000 max contribution under the age of 50.

3 - $6,000 max contribution age 50 and over. The excellent news about an IRA contribution is the fact that it is deductible. Keep in mind there are many other rules about 401Ks, so be sure to speak with your tax advisor before making any decisions about yours. A reminder: Conaway & Conaway are not CPAs and do not provide tax advise.

4 - Next, a SEP is a Simplified Employee Pension IRA. An employee can contribute to a SEP if they are at least 21, have earned a minimum income, and have worked for the same employer 3 of the ...
... past 5 years. You can make a contribution of up to 25% of total compensation (including bonuses), or $49,000 per year, whichever is lower. This is also deductible. Keep in mind that the IRA must be funded by the time you file your taxes.

5 - The contribution limits for Roth IRA accounts differ depending on whether you are married or single, and whether you file jointly or separately. But if your income is up to a certain account, you can contribute $5,000. If you are age 50 and over, you can potentially contribute up to $6,000. Roths are not deductible, but the good news is that they are TAX FREE. There is a tax-free build-up and a tax-free payout.

Scot Strategy

Scot Landborg, a < a href="http://www.ccwag.com/">wealth strategist from Conaway and Conaway, has four tips on how to be smart, not foolish this tax season. Avoid tax scams. One such scam is called “phishing”. In one variation of the phishing scam, people get these emails or phone calls from someone claiming to be the IRS, but don’t be fooled. Another key point to remember is that the IRS never sends out emails or makes phone calls to taxpayers. If the IRS needs to contact a taxpayer, it has its own series of letters that are sent out. Third, always be careful with any email you receive that claims to be the IRS or any financial institution for that matter. If they’re asking you for your SSN or credit card account number, close the window ASAP!! The IRS would never send a refund to your credit card. Finally, consult with your CPA before using a Schedule C (Profit or Loss for Business), that reports a net loss from a small-business venture, to file your income tax, if your main source of income comes from W-2 wages. You must pass two rules, “passive loss” and “hobby loss” for the business losses to stand up.

What’s Working in Business

Craig Kausen runs Linda Jones Enterprises—an art retailer and wholesaler. You may have heard of his grandfather—Chuck Jones—creator and animator of the Looney tunes characters. The art business has been multi-generational. It’s something his grandfather loved and contributed so much more than animation. They have a few galleries where we sell art—about half of the art revenue comes from my grandfather’s work. They also have a few different artists that contribute to the gallery that we have in Tustin and a non-profit supporting artists that Craig is heavily involved in.

For a complimentary consultation with Jim or Lorraine Conaway, please call 888-266-2929 and mention the “Smart Money Talk Radio” show.

C C Wealth Strategies is located in Tustin, California. This organization primarily operates in the Insurance Agents, Brokers, and Service business / industry within the Insurance Agents, Brokers and Service sector. You can also visit our website at - http://www.ccwag.com/