Thursday, May 29, 2014

Tax Reminders for Students with Summer Jobs

Students may not have to withhold any federal income tax from their wages if they did not owe any federal income tax last year and do not expect to owe any federal tax this year. This applies to students who can be claimed as dependents but their unearned income (i.e., interest, dividends, capital gains) must be $350 or less and their total income cannot exceed $6,200. However, if their investment income is more than $350, total income cannot exceed $1,000.

Another idea is for parents to hire their children to lower their tax bill as well. No FICA tax is due if a sole proprietorship, or single member LLC electing to be disregarded for income tax purposes, hires their kids who are under 18. Payments to kids also cut parent’s income and federal unemployment tax is not owed on their salaries until they hit age 21.

Tuesday, May 6, 2014

The Tax Deadline Has Passed...Now What?

Now that both the initial business and individual tax deadlines have passed (for calendar year filers), you may be thinking it is time to breathe easy until next year.  Nothing could be further from the truth.  There are several things you can be doing now, to prepare and plan for your 2014 tax filing.  

  1. Top priority is to make sure your tax return is in a secure place.  In our paperless world, make sure you have saved a copy of your returns to an external hard drive, or to the cloud.  It's a good idea to keep the supporting documents for those returns in the same place. If you have a paper copy of your return and supporting documents, make sure they are locked up. While the IRS statute of limitations (the time limit for the IRS to audit your return) in most cases may only be three years from the time of filing, many states have different limitations.  Therefore, we recommend saving your returns for at least six years.  You also never know when you will be applying for a new loan, college assistance, or other situation that requires a copy of your prior year tax returns.
  2. If you got a larger than expected refund for 2013, and especially if you owed more than anticipated, you should consider revising your Form W-4 with your payroll department.  This is the form that determines the amount of federal withholding that is taken out of your paycheck.  And don’t forget to adjust your state withholding also. Increasing your allowances will put more money in your pocket on payday, while decreasing your allowances will reduce your paycheck. 
  3. Contact your CPA!  It's never too early to start tax planning.  Having a midyear status check to see how your day to day life changes are impacting your tax situation, as well as seeing how your business is doing and how any tax changes for 2014 will impact you, is always a good idea.  Be proactive about your taxes!
  4. Keep a file folder for 2014 taxes, and make sure it is easily accessible.  Every time you get a document that you may need for your 2014 taxes, put it in the folder.  Examples include: charitable contribution receipts, closing statements from property sales or purchases, property tax receipts, rental expense receipts, etc.  When you start receiving your 2014 IRS tax forms, you will have everything in one spot, making your life much easier. 
  5. If you have extended your return for 2013, make sure you are in the process of getting the final pieces of information together and to your CPA.  September 15th and October 15th will be here before we know it!
As always, contact our office with any questions or concerns.  We are always happy to help!

Thursday, May 1, 2014

One for the road: Microsoft patches Windows XP for SA 2963983

Microsoft has a patch for this week's pesky Internet Explorer security hole, and in a surprising development, it will be available to Windows XP customers

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One for the road: Microsoft patches Windows XP for SA 2963983
According to a post by Dustin Childs on Microsoft's Security Response Center blog, Microsoft is about to release a fix for the Internet Explorer drive-by bug that I discussed earlier this week.

The security hole appears in every modern version of IE, from IE 6 to IE 11, and it affects every modern version of Windows, from XP to Windows 8.1 Update. You can be infected just by using IE to look at a compromised website; no interaction required. The Department of Homeland Security/CERT weighed in on the bug, advising folks to prop up IE or switch to a different browser.

FireEye caught the security hole last week and published a detailed analysis on Saturday. Microsoft issued Security Advisory 2963983 on Saturday, updating it on Tuesday, listing a few workarounds that foiled the exploit discovered by FireEye, but leaving open the question of whether that same security hole could be leveraged in different ways.

When the flaw came to light, the world's eyes (or at least the XP world's eyes) turned on Microsoft, to see if it would go ahead and patch the faulty browsers -- Internet Explorer 6, 7, and 8 -- on Windows XP. That OS, you certainly recall, was relegated to the big bit bucket in the sky less than a month ago. Now, it seems, we have an answer to the question posed last month in the Tech Watch post Windows XP countdown: Will Microsoft blink? As the crowd goes wild, the answer is yes, Microsoft will patch IE on Windows XP.

To quote Childs:
We have made the decision to issue a security update for Windows XP users. Windows XP is no longer supported by Microsoft, and we continue to encourage customers to migrate to a modern operating system, such as Windows 7 or 8.1. Additionally, customers are encouraged to upgrade to the latest version of Internet Explorer, IE 11.
Sanity prevails. Kudos to the folks who got the patch out so fast -- and to the folks behind them who approved the XP decision.

This story, "One for the road: Microsoft patches Windows XP for SA 2963983," was originally published at Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow on Twitter.