Here are several questions I am asked on a regular basis. If you have a nomination for another FAQ, I'm happy to consider it. Use the e-mail link above or visit the Feedback page to submit your suggestion.
SIMPLE IRA: For 2013 and 2012, you can defer up to $12,000, plus $2,500 if you are at least 50 years old (limited to 100% of your compensation).
401(k): For 2012 and 2013, you can defer up to $17,500, plus $5,500 if you are at least 50 years old.
SEP-IRA: For 2013, your company can contribute up to $51,000 per employee to its SEP-IRA, limited to 25% of compensation. For 2012, that amount is $50,000.
The maximum contribution for your combined IRAs is $5,500 in 2013 and $5,000 for 2012, plus $1,000 if you are at least 50 years old. Your ability to deduct this on your tax return may be limited depending on various factors. I can help you determe how much of your IRA contribution you can deduct.
For 2013, Roth contributions are allowed for joint taxpayers with Adjusted Gross Income (AGI) of less than $188,000, and singles and heads of household with AGI of less than $127,000. For 2012, those amounts are $183,000 for joint filers and $125,000 for those filing as single or head of household.
An engagement letter is a contract between you and me for the professional services I will provide. It specifies the work I will perform for you, the limitations of those services, and payment terms. It also specifies your responsibilities. My malpractice insurance carrier requires that I obtain these letters. This keeps my premiums low and transaltes to lower costs for you!
Notify me right away, then send me a copy of the notice. I will review the notice and let you know the best way to proceed. Usually you have a specified period of time or a specified date by which to respond and that's usually sufficient time for me to act on the notice for you. But, if I am unavailable before the specified time (i.e., vacation), you can call the phone number on the notice and ask the agency to place a hold on the account to give you time to discuss the matter with your tax professional.
Beginning for tax year 2005, Virginia granted automatic 6-month paperless extensions for business and individual taxpayers. That means no application for the extension is required. BUT, the price of this convenience can be steep: If you have not paid at least 90% of your total tax by the original due date of the return, you will pay an extension penalty of 2% per month or partial month on the tax due with the return until the return is filed. If you need additional time to file your Virginia return but have not met your 90% requirement, use Form 760IP to make a payment. You can access the Virginia Department of Taxation website from the Links page on this site.
Accounting emergencies are rare; you usually have plenty of notice before an issue becomes immediate. However, I understand that exceptions do occur. My clients will receive Vacation Alerts either through the monthly e-mail newsletter or by a phone call, giving them plenty of time to prepare for urgent needs before I take my vacation. While I am away, I will monitor voice mail on a regular basis and return those calls which I think cannot wait.