Now that it's back to school season, let's think about ways education can save you money on taxes...and a few ways it can't.
1. Private school tuition is not deductible on your individual tax return. If there's a daycare portion though, and you can split it out, that could be deductible for children up to 13 years old.
2. Clothing is not tax deductible. Sorry folks. Even if a particular uniform is required by the school.
3. Buying those football cards from the players for their fundraiser? The benefit received from use of the card likely exceeds the cost of the card. Not deductible.
4. Moving expenses are deductible, right? Nope. Not if moving your child to college.
5. Hopefully you've saved tuition money in a 529 plan as the earnings are not taxable but if you have to get a student loan, the interest paid is deductible up to a certain amount each year as long as your income isn't too high according to the IRS.
6. For the Education Credits & Deductions, typically tuition, required supplies & books count as eligible expenses. Not room and board, fuel for trips home, etc. Keep those receipts!
Other questions???? Give me a call.
Just announced is that only one IRA rollover is allowed tax-free per year per taxpayer beginning in 2015. If IRA funds are distributed and rolled over into another IRA account within 60 days, the distribution is typically considered tax free and is not subject to penalties. Current publications indicate this can happen on an IRA by IRA basis. New interpretations though say these IRA accounts must be aggregated. Let us know if you're considering an IRA rollover so you're aware of potential tax consequences. Click for more details!
And of course they've changed their minds. Trustee to trustee transfers do not constitute a roll-over per new interpretations of the IRS thus the rules stated earlier do not apply. As always, be sure to contact us to determine probable tax treatment before making investment decisions. Regulations change frequently.
I received this link in an email from the American Institute of CPAs late last week. After having such a great Mother's Day weekend and remembering a few conversations I've had over the years, I wanted to share with you the importance of being prepared. The article focuses on the female in relationships but it could easily apply to the other party as well. In a marriage, or in a business, you need to always be prepared for the unexpected. It's impossible to know what's going to happen next month or tomorrow and education and preparedness is crucial. Business owners must prepare contingency plans so employees and managers, spouses, are not left scrambling in the event of a death, trying to figure out who is in charge and how the show was ran. Spouses, you should share financial information and keep records organized in a safe location. Life insurance policies, bank documents, deeds, titles, stock certificates...stored in a secure, fireproof location or scanned and stored on a password-protected computer. Invite along your spouse to ask questions at meetings with me, your investment advisor, or attorney. I know it's often difficult to remember all the details of these conversations and trying to relay the information at the end of the day can be confusing.