The Small Business Tax Help Blog

Archive for November, 2009

Question: Just a few Tax Questions?

1. How much do you get for each dependent child under the age of 18? I heard it went up for the 2008 tax season.

2. How much is the Earned Income Credit (EIC) for a married couple filing jointly with 2 children?

3. Does your 401K effect your taxes?

Answer:

1.Under 17 Child Tax credit $1000/ child

Each exemption is $3500 in 2008

2.The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $4,824, up from $4,716. The income limit for the credit for joint return filers with two or more children is $41,646, up from $39,783.

3) If you make a 401K contribution in 2008, it reduces your taxable wages you report on your IRS 1040.

Health Overhaul Could Ding Married Couples

Married couples could end up paying thousands of dollars more each year for health insurance than singles with the same incomes.

Sample 1040EZ for Married Couple (Combat Pay)

If you are leaving your current employment, one important consideration is whether or not to rollover your 401k. Leaving your money in your previous employer’s 401k plan takes you out of the driver’s seat. Your retirement funds will remain subject to your former employer’s decisions about what you may invest in, and fees you must pay. Unfortunately, many people get hit with unnecessary penalties by withdrawing their funds rather than deciding to rollover their 401k plan, which can reduce retirement savings dramatically. So, the best option is to rollover your 401k.

Why Rollover

The 401k rollover is an ideal alternative to funds withdrawal, as it allows you to move funds from your existing retirement account into your new employer’s plan, an IRA plan run by a brokerage or Fund company, or a self-directed individual retirement account (IRA). Here are more advantages to consider before an IRA rollover:

Better Investment Options - You have the right to select your own investment options, within the scope of the brokerage or fund that you choose to rollover your IRA into, and not get limited to the funds selected by your employer.

Lesser Fee - Under an employer-directed 401k, you may be charged a sum up to 2 percent from your account manager. When you rollover your IRA, you may choose an administrator that does not charge high administration fees, hence enhancing immediate savings.

Easy Account management - You have the right to choose from hundreds of IRA administrators. Take care to select a brokerage or fund company that has a reporting style that meets your needs. Many providers allow 24-hour internet access to modify your selections, giving you the flexibility to adjust to market conditions and protect your savings.

Ways to rollover your 401k

Rollover into your new employer’s plan: Rolling into your new employer’s 401k is efficient because you have no investment minimum on the fund options. Moreover you may like to roll the money into your new employer’s plan because:

Aside from some benefits, there are also many drawbacks to consider when you rollover your 401k to a new employer’s 401k plan. First, these accounts are employer-directed, so as long as you are an active employee of the particular organization, you are restricted to these plans and rules. You will be limited to the investment options chosen by the employer and you will not have access to your funds unless you change your job or take a 401k loan.

Rollover into an IRA: A 401K rollover to IRA could be the smartest option for your retirement money. Depending on a few simple factors, you have the choice of rolling your 401k into a Traditional IRA, a Self-directed IRA, a Roth IRA, or a Simplified Employment Pension (SEP) IRA. These differ in the amount that you may contribute annually, their pre-tax or post-tax status, and the ways that vehicles in which they may be invested.

Once you have chosen the IRA that you are eligible for and that meets your needs, you have to choose the firm or mutual fund company with which you want to invest your IRA. These decisions are best made with the help of a financial planner. Select the firm that clearly states its terms, fees and other specific conditions. Talk to your advisor and research the mutual fund or money manager where you might invest. Now you are ready to open your account and get your money rolled over. Most IRA managers make the process so simple that you can do it online during your lunch break.

The main benefit of 401k to IRA rollover is that your retirement funds can grow tax-free providing you the means to enjoy a prosperous retirement.

Wealth check: ‘I want to turn my music into a business’

Jay Marsh is a musician from Manchester. Six months ago, he gave up his job of four years as an administration assistant to concentrate on his indie rock band, the Skinny Machines.

Individual 401k (i401k) For Self Employed Business Owners Offered By Sunwest Trust, Inc

IRS promises greater scrutiny of paid tax preparers

Most of us don’t do our own tax returns. My husband did ours for years. He finally surrendered, too frustrated with the never-ending task of keeping up with the many changes to the tax code. We now pay a professional, and it is money well spent to pass on the aggravation to someone else. So bravo…

The Business of Modeling

Question: Did you all Know that our Rebate checks are coming sooner?

Those of you eagerly awaiting your tax rebate checks will rejoice at the Treasury Department’s announcement that they’re depositing the checks ahead of schedule. Their original announcement stated that May 2 would be rebate check opening day, but they’ve updated their schedule with the early start date of Monday, April 28.

If the IRS has your direct deposit information then your check will be deposited earlier than those who will receive their check in the mail. However, the mailed checks will also be sent a week ahead of schedule and mailings will begin on May 9. All rebates will be distributed according to the last two digits of your social security number as originally stated. While the IRS hasn’t come out with a new schedule, I’ve updated their old one to reflect the newly announced dates. To see an updated estimated schedule just read more

Direct deposit payment

Last 2 Digits of SSN Date Check Will Be Sent
00-20 April 28
21-75 May 5
76-99 May 12

Paper

Answer: your info is apprichated.. i want to buy something special or even better deposit the money so i can buy something needed .. not just go and spend on impulse.. i recommend every one to save the cash.. and wait until you see something that you normally would not buy to expensive.. ok gilermo.

Categories

1st — Unemployed job seekers in Oneida, Lewis, Madison and Herkimer counties are among those statewide who will be offered free gas cards by the state. Face value will vary from $25 to ¢...

Super-Rich Tax Cheats

Press Release / News

Americans of all ages and income brackets continue to grow increasingly unhappy at work-a long-term trend that should be a red flag to employers, according to a report released today by The Conference Board.

Excel Busn Math 42: Federal Income Tax Payroll Deduction