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Wednesday, September 24, 2014

TAX BREAKS: Medical Expenses and Health Savings Accounts

Use the funds the year
without penalty.
If you have a high-deductible health insurance plan, there’s another option (aside from FSA or Flex-Spending) in the alphabet soup of savings accounts that might help you save on medical costs: a health savings account (HSA). A high-deductible health insurance plan means that the amounts you are required to pay out of pocket – on top of premiums – meet certain thresholds. For 2014, those are $1,250 for an individual or $2,500 for a family.

Under the terms of the HSA, you can contribute pre-tax dollars (directly from your paycheck) of up to $3,300 a year for an individual or $6,550 for a family into the account (for those 55 and older, the contribution limits are up to $4,300 for an individual and $7,550 for a family).

You can withdraw these funds tax-free so long as you use them for qualifying medical expenses.

Unlike the FSA, the HSA is not a use it or lose it account: the funds simply roll over at the end of the year. You can use the funds the next year without penalty – and you can top it up – so there’s no guesswork involved in funding.

READ MORE >> FORBES.COM: "Back to School 2014: Medical Expenses and Health Savings Accounts"


Wednesday, September 17, 2014

Essential Guide to Avoiding Tax Audits

Avoid problems at tax time.
A few simple tips to help you avoid a tax audit:
A tax return with lots of round numbers.
$1,200 in travel expenses or $1,500 in charitable contributions — suggests that you're just estimating those claims, and the IRS loves to go after people who don't keep good records. You don't need to include cents, but use the closest accurate dollar amounts, such as $1,260 or $1,525.

If you use a software program, do not use its e-filing feature.
If there's anything that might leave an IRS officer wondering. Print out your return and attach an explanation statement and mail it in. A new feature this year is that you will able to include PDF attachments with certain forms. Ask if your software supports this.

Sloppy arithmetic on a paper return can flag an audit.
People list correct numbers but on the wrong line. So make sure sums are not only correct but in the correct place.
READ MORE >> AARP.ORG: 9 Tips To Avoid Tax Audit

READ MORE GBC Tax Services Website
For All Your Accounting Needs Call GBC 678-366-9232


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