2014 Health Savings Account Limits Announced

Category: What's New

The savings limits for the ever-popular Health Savings Accounts (HSA) are now set for 2014. The new limits are outlined here with current year amounts noted for comparison purposes.

What is an HSA?

An HSA is a tax advantaged savings account where part of your wages can be contributed on a pre-tax basis. There is no tax on the funds contributed or the interest or investment earnings as long as the funds are used to pay for qualified medical, dental and vision expenses. To qualify for this tax-advantaged account you must be enrolled in a “high deductible” health insurance program as defined by HSA rules.

The limits

Health Savings Account (HSA) Limits 2013 NEW! 2014 Change Maximum Annual Contribution Self $3,250 $3,300 +$50 Family $6,450 $6,550 +$100 Add: 55+ catch up contribution $1,000 $1,000 nc Health Insurance Requirements Minimum Deductible Self coverage $1,250 $1,250 nc Family coverage 2,500 2,500 nc Out-of-pocket Maximum Self coverage $6,250 $6,350 +$100 Family coverage 12,500 12,700 +$200

Note: To qualify for an HSA you must have a qualified High Deductible Health Plan (HDHP). To qualify, a plan must meet minimum deductible requirements that are typically higher than traditional health insurance. In addition, your coverage must have reasonable out-of-pocket payment limits as set by the above noted maximums.

Not sure what an HSA is all about? Check with your employer. If they offer this option in their health care benefits, they will have information discussing the program and its potential benefits.

Triple Tax: aka The Lottery

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154 E. Boston Post Road | Mamaroneck, NY 10543 | (914) 253-6857 | | www.jpalcpa.com | joe@jpalcpa.com Triple Tax: aka The Lottery Category: Your Income Most everyone enjoys dreaming of winning it big in the lottery. News media outlets publicize the large unclaimed pots of money on the evening news and they put a spotlight on the lucky multi-million dollar winners. Ever wonder what the tax math looks like? The bottom line when seen from a wage stand point is that 75% or more of the income used to play the lottery does not end up in the hands of the winner. Published: 2013-05-10 12:00:00

Recent Tips Are You Maximizing Your Retirement Account Tax Benefit? 2013 contribution limits increase for most major retirement plans Audit Target: The Sole Proprietor Don't Forget Your Estimated Payment Still Time to Make IRA Contributions for 2012

Post tax filing record retention

Toss This. Not That. Category: The Audit

With a sigh you are relieved that yet another tax return has been sent off to the government. Another 12 months before you need to do this again. But before you close that tax file, there is still some work to do. If the IRS or state revenue department selects your return for review, you will need to be prepared. Here is what you need to know:

Record Keeping Tips

1. Normally three years. Normally tax records should be kept for three years from the later of the tax filing due date, the date you filed your taxes, or the date you paid your tax in full.
2. Some documents should be saved indefinitely. This includes things like:
• Your tax return
• Records related to a home purchase or sale
• Stock transactions
• Business/Rental records
3. The IRS does not require any special record keeping system. You just need to keep all documents that can support information on your tax return.
4. Here are common records worth retaining:
• Canceled checks
• Invoices
• Other proof of payment for claimed deductions
• Bank and credit card statements
• Mileage logs
• Receipts with time; place; and purpose noted
5. Be mindful of other record retention requirements
• State record retention requirements are often 6 months to 1 year longer than Federal requirements
• Social Security records often need to be proofed to ensure they match your pay stubs
• Insurance, banking, and estate management may require other records
• Federal retention requirements become 6 years if your return understates your tax obligation by more than 25%, and the record retention period is indefinite if fraud is involved.

Keep a good system

So the build up of paperwork does not overwhelm your attic, at the end of the tax year rotate your records. Decide how many years of records must be retained. Then count back from your current tax return filing year and shred unneeded, older documentation. Create new empty files for the current tax year to save receipts for the coming year. Consider scanning records to keep digital copies. A final word of caution. If you are unsure whether to retain or shred, keep it unless you know the document can be replaced.