Posts Tagged "unemployment"

Take a penalty-free IRA withdrawal for medical expenses

Posted on Mar 8, 2014

Are you considering withdrawing funds from your traditional IRA to pay unexpected medical costs? You may be hesitating because of the 10% penalty imposed on withdrawals made when you’re under age 59½. Since the 10% is calculated on the total you withdraw, the tax hit could be substantial. Worse, the penalty typically is not withheld from the cash you receive, so you’ll need to come up with the money when you file your tax return. Fortunately, in some situations you can take penalty-free withdrawals from your IRA for medical expenses. One example is the medical insurance exception, which applies if you lost your job and have received unemployment compensation for 12 consecutive weeks. IRA withdrawals used to pay medical insurance premiums for yourself, your spouse, or your dependents aren’t subject to the 10% penalty, as long as you take the distributions in the year you receive unemployment (or the year after). This exception may also be available if you were self-employed and are unable to collect unemployment benefits. Another exception: You can take penalty-free withdrawals when you incur unreimbursed medical expenses that exceed 10% of your gross income. For instance, say your 2014 gross income is $40,000 and your total unreimbursed deductible medical expenses are $5,000. To determine the penalty-free withdrawal amount of $1,000, multiply $40,000 by 10%, then subtract the result ($4,000) from $5,000. You don’t have to itemize your deductions to qualify for this exception. In addition, the penalty does not apply when early IRA withdrawals are due to a permanent, total disability. For more information about the requirements for these and other exceptions to the 10% early withdrawal penalty, please contact us. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ <https://plus.google.com/108764776146415485651/posts> , LinkedIn <http://www.linkedin.com/in/gillilandcpa> , Facebook <https://www.facebook.com/gillilandcpa> , and Twitter <https://twitter.com/dnggcpa>...

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Don’t overlook the “nanny tax”

Posted on Jan 29, 2014

As you review your filing requirements for 2013, make sure you don’t overlook the so-called “nanny tax.” If you have a household employee, you could be liable to pay state and federal payroll taxes. First, you must determine whether you have a household employee. Generally, this is someone you hire to work in or around your house. It could be a babysitter, nurse, maid, housekeeper, or gardener. It doesn’t matter whether they work part-time or full-time, or whether you pay them hourly, weekly, or by the job. But not everyone who works around your house is an employee. For example, if a lawn service sends someone to cut your grass each week, that person is not your employee. As a general rule, workers who bring their own tools, do work for multiple customers, or control when and how they do the work, are not your household employees. If you have a household employee, you’ll generally be responsible for 2013 payroll taxes if you paid that individual more than $1,800 last year. However, federal unemployment tax kicks in if you pay more than $1,000 to all domestic employees in any quarter. It’s not always easy to tell whether you have a household employee, or whether exceptions apply. If in doubt, don’t hesitate to contact our office. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ <https://plus.google.com/108764776146415485651/posts> , LinkedIn <http://www.linkedin.com/in/gillilandcpa> , Facebook <https://www.facebook.com/gillilandcpa> , and Twitter...

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Credit for hiring a vet will expire soon

Posted on Dec 20, 2012

The IRS reminds businesses that the special credit for hiring veterans will expire soon. Companies that hire unemployed military veterans may qualify for a tax credit of up to $5,600 ($9,600 for vets with service-related disabilities). The credit is available for vets hired before January 1, 2013. The amount of the credit depends on the length of unemployment before being hired and the wages paid during the first year of work. For more information, contact our...

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Con artists target the unemployed

Posted on Jul 27, 2010

Federal officials have recently warned that employment-related scams are soaring. As the economy struggles and unemployment grows, ads for bogus jobs are on the rise. The ads are popping up everywhere from local newspapers to signs on the corner telephone pole. The Internet makes it easy for con artists to defraud victims with e-mail pitches and online job boards. Beware of the following popular scams: * Work-at-home scams usually require an up-front fee for training, materials, or equipment. Scam artists promise to pay for work, such as stuffing envelopes, processing medical claims, or making toys. Either the work never materializes, or workers are not paid. * Business opportunity scams also require up-front fees. Con artists sell vending machines, software products, and other equipment that is never delivered or is of such poor quality that it has little or no value. * Victims of phantom civil service jobs pay for study materials and exams with promises that they’ll land jobs with the Postal Service, airports, or other government agencies. Unfortunately, the jobs never materialize. To avoid being victimized, consider these suggestions: * Never pay up-front fees. Legitimate job agencies generally don’t ask for money until after they’ve performed a service. * Be skeptical of “easy money” ads. If an opportunity sounds too good to be true, it usually is. * Watch out for ambiguous ads. Legitimate companies provide detailed job descriptions about the positions they are trying to fill. * Don’t give personal information to strangers. Con artists can use this information to steal your identity and your money. * Be suspicious of ads with 900 phone numbers. Be aware that 900 numbers are pay-per-call, and the charges will appear on your phone bill. * Know with whom you’re dealing. Contact the Secretary of State where the business is located. Ask if the business is registered and if complaints have been filed against it. * Be dubious of postal box numbers. Ask for the business’s physical address, and investigate whether the business is actually located there. The local Chamber of Commerce may be of assistance. The bottom line: Do your homework before you pay job-related...

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