Get 2015 off to a good tax start
Tax Tip of the Week
February 2, 2015
Get 2015 off to a good tax start
The new year offers fresh opportunities for getting your tax and financial planning underway. Here are three suggestions for starting 2015 in the right direction.
- Check your health flexible spending account (FSA) rules. Your employer may offer a "run-out" period, a grace period, or the ability to carry over unused funds in your FSA. Understanding which features are part of your plan can prevent lost benefits. A "run-out" period is the number of days you can continue to submit claims for last year's eligible expenses. The number of days can vary, but generally you'll want to take advantage of the run-out period during January. A grace period typically lasts until March 15, and is an extension of time that allows you to incur medical expenses and use last year's leftover FSA funds to pay them. A carryover feature means you can bring a portion of last year's FSA contribution — up to a maximum of $500 — into the current year. The carryover does not change the amount you can deposit in your FSA during the current year. What to watch out for: Grace periods and carryover features may restrict your ability to fund a health savings account for 2015.
- Consider health insurance penalties. The penalty for not having qualified health insurance goes up this year. If you're not covered by a health policy during 2015, the penalty is the greater of 2% of your annual household income or $325 per person (to a maximum of $975). Unless you qualify for an exemption or a special enrollment period, the last date to sign up for 2015 coverage on an exchange is February 15.
- Plan for required minimum distributions. If you'll reach age 70½ this year and you're no longer working, you'll need to begin distributions from retirement accounts such as traditional IRAs and 401(k) plans. If you intend to invest the money you withdraw, now's a good time to consider the effect on your portfolio. Tip: You may benefit from a one-time extension of the RMD requirement.
Please call for more tax and financial planning advice. We're happy to answer your questions.
"Business Tips" are published monthly to provide useful business information. Return to this site every month for helpful suggestions on how to make your business more profitable. If you would like more information on anything in "Business Tips," or if you'd like to be on our mailing list to receive other business, tax, or financial information from time to time, please contact our office.
The business information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
© MC 2015
February 2, 2015
Get 2015 off to a good tax start
The new year offers fresh opportunities for getting your tax and financial planning underway. Here are three suggestions for starting 2015 in the right direction.
- Check your health flexible spending account (FSA) rules. Your employer may offer a "run-out" period, a grace period, or the ability to carry over unused funds in your FSA. Understanding which features are part of your plan can prevent lost benefits. A "run-out" period is the number of days you can continue to submit claims for last year's eligible expenses. The number of days can vary, but generally you'll want to take advantage of the run-out period during January. A grace period typically lasts until March 15, and is an extension of time that allows you to incur medical expenses and use last year's leftover FSA funds to pay them. A carryover feature means you can bring a portion of last year's FSA contribution — up to a maximum of $500 — into the current year. The carryover does not change the amount you can deposit in your FSA during the current year. What to watch out for: Grace periods and carryover features may restrict your ability to fund a health savings account for 2015.
- Consider health insurance penalties. The penalty for not having qualified health insurance goes up this year. If you're not covered by a health policy during 2015, the penalty is the greater of 2% of your annual household income or $325 per person (to a maximum of $975). Unless you qualify for an exemption or a special enrollment period, the last date to sign up for 2015 coverage on an exchange is February 15.
- Plan for required minimum distributions. If you'll reach age 70½ this year and you're no longer working, you'll need to begin distributions from retirement accounts such as traditional IRAs and 401(k) plans. If you intend to invest the money you withdraw, now's a good time to consider the effect on your portfolio. Tip: You may benefit from a one-time extension of the RMD requirement.
Please call for more tax and financial planning advice. We're happy to answer your questions.
"Business Tips" are published monthly to provide useful business information. Return to this site every month for helpful suggestions on how to make your business more profitable. If you would like more information on anything in "Business Tips," or if you'd like to be on our mailing list to receive other business, tax, or financial information from time to time, please contact our office.
The business information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
