Attention Anthem Insurance Policy Holders:

Due to a data breach at Anthem, the Connecticut tax commission is urging taxpayers who expect refunds to file your taxes quickly. With Anthem being the largest provider in CT, we at MJW EA & Company LLC want our clients to be aware of the situation and what a breach like this means for you: the sooner your file your taxes and claim, the more assured you are of a) getting your refund without issue and b) the faster detection of fraudulent claims using your information.

We are happy to make your return preparation a priority if you are a part of this data breach.

If you have any questions or concerns, please do not hesitate to contact our office. We are, as always, here for you.

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401(k), HSA and Minimum Wage Updates for 2015

Along with getting everything organized for this year’s tax season, here is some information to be aware of for the beginning of the year:

  •  401k and 403b contributions have increased

The IRS 2015 maximum 401K contribution limits have been officially announced. Unlike with the 2014 maximum 401k contribution limits, there is an increase in limits once again!

  • The 2015 401K maximum contribution is $18,000!

The maximum 401K catch-up contribution per year for those over 50 years old will also increase to $6,000 in 2015 (up $500) over the standard contribution limit in 2014. This is the same for 403B’s and 457’s. The catch-up contribution is IN ADDITION TO the regular contribution limit.

  •  HSA contribution limit (employer + employee)

Individual: $3,350

Family: $6,650

  • SIMPLE IRA Contribution Limits and Deadlines
Year Maximum Contribution
(if under age 50)
Maximum Contribution
(if over age 50)
Contribution Deadline
2014 $12,000 $14,500 04/15/2015 (plus extensions)
2015 $12,500 $15,500 04/15/2016 (plus extensions)

 

 

Reminders for businesses

  • Due date of Business Entity Tax

For tax years beginning on or after January 1, 2013, the business entity tax is due every other year.  You will receive no reminder and this form has to be filed and paid electronically. For a calendar year filer, the filing periods will be as follows:

 

BIENNIAL PERIOD (2-Year Period)                   BET DUE DATE AMOUNT DUE:

Beginning 1/1/2013 – Ending 12/31/2014                       April 15, 2015            $250

Beginning 1/1/2015 – Ending 12/31/2016                       April 15, 2017            $250

http://www.ct.gov/drs/cwp/view.asp?a=1454&q=506078#1

 

  • Connecticut Annual Report

All registered businesses file an annual report. You have to file your Connecticut annual report using the Secretary of State’s online filing system. Connecticut Secretary of State mails a reminder to your Connecticut registered agent. Be certain you have a reliable and knowledgeable registered agent to assist in keeping your company in good standing.

 

  • All Connecticut employers are required to report all newly-hired employees within 20 days of hiring them.

Immediately report all new hires and rehires to the CT Department of Labor by going to: http://www.ctdolstate.ct.us/newhires/index.asp

 

  • Connecticut Minimum Wage Rates
    • Basic Minimum Rate (per hour) = $9.15
    • Premium Pay After Designated Hours = 40 hours
    • In restaurants and hotel restaurants, for the 7th consecutive day of work, premium pay is required at time and one half the minimum rate.

 

We are, as always, here to answer and assist with any questions or concerns you may have.

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Affordable Care Act and Taxes – What Are The Major Points?

  • Open enrollment on the health care exchanges runs from Nov. 15 to Feb. 15.
  • If you received subsidized insurance, new forms will become a part of your tax return filing process.
  • With IRS cutbacks and budgetary constraints, the IRS warns that only half of the callers may get through — and those who succeed may have to wait a half an hour or more.   Many will get a “courtesy disconnect.”

Some notes on penalties:

  • The penalties will rise sharply over the next couple of years – next year it will double – so if your strategy is to pay the penalty instead of getting the insurance, consider the following:
    • People who were uninsured for more than three consecutive months may owe something.
    • The IRS can deduct the penalty from any refund due. And if a taxpayer isn’t owed a refund — and fails to pay the penalty – the amount will accrue interest and roll over into the following tax years. The IRS could continue to deduct the growing amount from any refunds due for 10 years, which is how long the agency is allowed to collect payments.

Some Notes on Exemptions:

  • If you did not avail yourself of health insurance this year, you will have to prove that you have a valid excuse or you will be liable for a penalty.
  • The process for an exemption is time consuming, requiring mailing a signed paper application to the exchanges. These are processed manually, which can take a couple of weeks. Those exemptions include several hardships, such as foreclosure, the death of a family member, unpaid medical bills and eviction, as well as religious reasons for not using insurance.
  • Once an exemption is approved (and if it’s not, the applicant can appeal), a taxpayer is sent an “exemption certificate number,” which should be entered on the tax return.

The staff at MJW EA & Company LLC has spent a good deal of time attending educational seminars to prepare for these questions, issues and forms and will welcome your questions – with absolutely no “courtesy disconnect!”

MaryJoWalker.com

The FAFSA Deadline Approacheth

Those headed to college in the fall should get ready to start the application process for financial aid.

The new Free Application for Federal Student Aid, FAFSA is now available online.  Click here to start filling out the form.

Filing the FAFSA as soon as possible after January 1st increases applicants’ chances of getting the best financial aid packages for which they are eligible. Those who file the form from January through March receive, on average, twice the amount of grant money as those who file later, according to Mark Kantrowitz, publisher of the financial aid website Edvisors.com.

Keeping this in mind, you can choose to either wait until your tax return is complete and filed for the year or complete your FAFSA using estimates derived from the previous year’s tax returns and other documentation. (Note: If you do this, you will need to return later and correct any discrepancies between the estimated values and the current year’s tax returns.)

Connecticut has a February 15th deadline for certain aid programs. Some state grant programs distribute awards on a first-come, first-served basis, which means waiting could cost students to miss out on aid even if they qualify.

MJW EA & Company LLC offers FAFSA preparation services with negotiable fee options.

Also, please take some time and check out our “College and Beyond” section on our website for information and resources regarding all things education oriented.

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Oh, My Goodness!

Oh my goodness! It is the day after Christmas, there are 6 days left in 2014, and Congress just passed (and the President signed) the Tax Increase Prevention Act of 2014 (Wow…what a title!). IRS Commissioner John Koskinen has been upfront when declaring this tax filing season as the most challenging ever. Not only is the Affordable Care Act in place, but expiring laws and last minute Congressional actions take effect. There are new forms and now obsolete forms. And on and on…

We have reminded you throughout the year of many of these challenges, tax law changes and various strategies. Time is RUNNING OUT for 2014!!!

Take some time over the next few days to take a look at your finances; don’t miss out on minimizing your taxes!!!!

Some of the tax breaks from the Tax Increase Prevention Act of 2014 may be crucial to your year-end tax planning.

  1. People over 70.5 years old can distribute funds out of their traditional IRA, and donate directly to charity. The beauty of this is the distribution doesn’t show up as income on the tax return.
  2. Tuition deduction is back; the educator deduction is back.
  3. This one is of crucial importance…anyone that went through a foreclosure this year can exclude from income the canceled mortgage debt.
  4. Small business expensing limitation is in effect for 2014. This is incredibly valuable and important for many of our small business clients. This is what is known as the Section 179 election and has been increased to $500,000 for capital expenditures.
  5. Extension of credit for nonbusiness energy property. This provision allows a credit of 10% of the amount paid for qualified energy improvements, up to $500.00.

Let’s look at a few projects for you for the next few days:

  1. Take a look at charities given. Did you forget NPR, your local land trust or community foundation, Columbus House, Conquer Cancer or one of your other favorite non-profit organizations? This is a great time to donate. Sit by the fire and have kind thoughts… Action on these thoughts will provide you with a 2014 tax deduction (don’t forget to save your records).
  2. Harvest your investment gains and losses. If you want more info on this check out http://moneyover55.about.com/od/taxtips/a/capitallosstax.htm?nl=1 for a good explanation.
  3. Take a look at paying certain January payments for increased 2014 tax deductions: state income estimated tax and real estate taxes (not so easy if your real estate taxes are escrowed).
  4. If you are self-employed, take a look at this article for year-end strategies http://taxes.about.com/od/planforthefuture/qt/Year-End-Tax-Planning-Tips-For-Freelancers-And-Self-Employed-Persons.htm?nl=1
  5. Review your retirement plan and the contributions. You still have a few days to set up a 401k plan if you are self-employed or the owner of an S Corp or LLC…don’t miss out on this!
  6. Make your Connecticut Higher Education Trust (CHET) payment on or before December 31, 2014 to qualify for a 2014 CT Income Tax deduction. https://www.aboutchet.com/benefits/index.shtml

You will be receiving our Tax Organizer Envelope shortly. Start using this as your important tax information comes in. It will save you time, energy and ease you towards a painless 2014 tax year filing!

And a few things to keep in mind:

  1. With all of the identify theft issues going on: the IRS never calls to demand immediate payment or emails and they will certainly never threaten to bring in local police to have you arrested for not paying.
  2. Most retirees need to take Required Minimum Distributions by December 31, 2014.

We at MJW EA & Company LLC are deeply thankful for the opportunity to provide you with the kind of services that you have come to expect. It’s in this spirit we say simply, but sincerely, “Thank you and Best Wishes for the New Year!”

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MaryJoWalker.com