Category Archives: General Information

Important Tax Deadlines for 2017

January 15, 2017 : 4th Quarter 2016 Estimated Tax Payment Due If you are self-employed or have other fourth-quarter income that requires you to pay quarterly estimated taxes, get them postmarked by January 15, 2017.

April 18, 2017: Individual Tax Returns Due for Tax Year 2016 If you haven’t applied for an extension, e-file or postmark your individual tax returns by midnight April 18, 2017.

ALSO due on April 18, 2017:

Individual Tax Return Extension Form Due for Tax year 2016 Need more time to prepare your tax return? File your request for a tax extension by April 18 to push your deadline back to October 17, 2017.

1st Quarter 2017 Estimated Tax payment Due If you are self-employed or have other first-quarter income that requires you to pay quarterly estimated taxes, get your Form 1040-ES postmarked by April 18, 2017.

Last Day to make a 2016 IRA Contribution If you haven’t already funded your retirement account for 2016, do so April 18, 2017. That’s the deadline for a contribution to a traditional IRA, deductible or not, and a Roth IRA. However, if you have a Keogh or SEP and you get a filing extension to October 17, 2017, you can wait until then to put 2016 money into those accounts.

June 15, 2017: 2nd Quarter 2017 Estimated Tax Payment Due If you are self-employed or have other second-quarter income that requires you to to pay quarterly estimated taxes, make sure your payment is postmarked by June 15, 2017.

September 15, 2017: 3rd Quarter 2017 Estimated Tax Payment Due If you are self-employed or have other third-quarter income that requires you to pay quarterly estimated taxes, make sure your third quarter payment is postmarked by September 15, 2017.

October 17, 2017: Extended Individual Tax Returns Due If you got a filing extension on your 2016 tax return, you need to get it completed and postmarked by October 17, 2017.

ALSO due October 17, 2017: Last Chance to Recharacterize 2016 Roth IRA Conversion If you converted a traditional IRA to a Roth during 2016 and paid tax on the conversion with your 2016 return, October 17, 2017 is the deadline for recharacterizing (undoing) the conversion. Doing so could save you money if the IRA has lost money since the time of the original conversion.

January 15, 2018: 4th Quarter 2017 Estimated Tax Payment Due If you are self-employed or have other fourth-quarter income that requires you to pay quarterly estimated taxes, get them postmarked by January 15, 2018.

New Jan 31 Deadline for Employers

A new federal law, aimed at making it easier for the Internal Revenue Service (IRS) to detect and prevent refund fraud, will accelerate the W-2 filing deadline for employers to January 31.

For similar reasons, the new law also requires the IRS to hold refunds involving two key refundable tax credits until at least February 15. Here are details on each of these key dates.

The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, includes a new requirement for employers. Employers are now required to file their copies of Form W-2, submitted to the Social Security Administration, by January 31. The new January 31 filing deadline also applies to certain Forms 1099-MISC reporting non-employee compensation such as payments to independent contractors.

In the past, employers typically had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of these forms. In addition, there are changes in requesting an extension to file the Form W-2. Only one 30-day extension to file Form W-2 is available and this extension is not automatic. If an extension is necessary, a Form 8809 Application for Extension of Time to File Information Returnsmust be completed as soon as you know an extension is necessary, but by January 31. Please carefully review the instructions for Form 8809, for more information.

The new accelerated deadline will help the IRS improve its efforts to spot errors on returns filed by taxpayers. Having these W-2s and 1099s earlier will make it easier for the IRS to verify the legitimacy of tax returns and properly issue refunds to taxpayers eligible to receive them. In many instances, this will enable the IRS to release tax refunds more quickly than in the past.

The January 31 deadline has long applied to employers furnishing copies of these forms to their employees and that date remains unchanged.

Some Refunds Delayed Until at Least February 15

Due to the PATH Act change, some people will get their federal refunds a little later. The new law requires the IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until February 15. By law, the IRS must hold the entire refund, not just the portion related to the EITC or ACTC.

Even with this change, taxpayers should file their returns as they normally do. Whether or not claiming the EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. Though the IRS issues more than nine out of 10 refunds in less than 21 days, some returns are held for further review.

IRS Offers 10 Tax Tips

WHO WANTS A FREE TAX TIP?

If you haven’t filed yet, the IRS has these 10 tax-time tips to help you. The April 18 deadline to file your federal tax return is less than two weeks away. Don’t wait until the last minute.

1.Gather your records. Make sure you have all your tax records. This includes receipts, canceled checks and other records that support income, deductions or tax credits that you claim. If you purchased health insurance through the Marketplace, you will need the information in Form 1095-A to file.

2.Report all your income. You will need to report your income from all of your Forms W-2, Wage and Tax Statements, Forms 1099 and any other income – even if you don’t receive a statement – when you file your tax return.

3.Try IRS Free File. Free File is available only on IRS.gov. If you made $62,000 or less, you can use free name-brand tax software to file your federal tax return. If you earned more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. If you need more time to file, you can also use IRS Free File to get an automatic six-month extension to file your taxes. Remember, an extension to file your tax return is not an extension to pay taxes you owe, which are due April 18.

4.Try IRS e-file. Electronic filing is the best way to file a tax return. It’s accurate, safe and easy. If you owe taxes, you have the option to e-file early and pay by April 18 to avoid penalties and interest.

5.Use Direct Deposit. The fastest and safest way to get your refund is to combine e-file with direct deposit. The IRS issues more than nine out of 10 refunds in less than 21 days.

6.Visit IRS.gov. IRS.gov is a great place to get what you need to file your tax return. Click on the “Filing” icon for links to filing tips, answers to frequently asked questions and IRS forms and publications. Get them all at any time. The IRS Services Guide outlines the many ways to get help on IRS.gov.

7.Use IRS online tools. The IRS has many online tools on IRS.gov to help you file. For instance, the Interactive Tax Assistant tool provides answers to many of your tax questions. The tool gives the same answers that an IRS representative would give over the phone. If you want to find a tax preparer with the qualifications and credentials that you prefer, use the IRS Directory of Federal Tax Return Preparers. IRS tools are free and easy to use. They are also available 24/7.

8.Weigh your filing options. You have different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free help at a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site.

9.Check out number 17. IRS Publication 17, Your Federal Income Tax, is a complete tax resource that you can read on IRS.gov. It’s also available as an eBook. It can help you with many tax questions, such as whether you need to file a tax return, or how to choose your filing status.

10.Review your return. Mistakes slow down your tax refund. If you file a paper return, be sure to check all Social Security numbers. That’s one of the most common errors. Remember that IRS e-file is the most accurate way to file.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Baby Boomers & Retirement Planning

Facebook, GE, Johnson & Johnson and other stocks that Baby Boomers love.

If you are a Baby Boomer, and have investments in your retirement planning, you’ll enjoy this article. Forbes writer, Samantha Sharf, looks at the stocks that the different generations favor. “Johnson & Johnson JNJ -0.59% is the tenth most popular stock among Baby Boomers — the generation born between 1946 and 1964 — making up 0.9% of the average Boomer’s stock portfolio, according to TD Ameritrade. Two key facts make a strong case for why the healthcare giant ranks with this group but not their younger counterparts.

First fact: Boomers are turning 65 at a rate of about 10,00 per day. That trend is expected to continue until around 2030, according to Pew Research.

Second: Last year Fidelity Benefits Consulting estimated a 65-year-old couple will need an average of $220,000 to pay for medical expenses throughout retirement. That’s a lot.”

“The healthcare giant ranks 14th for Millennials’, the youngest adult generation, and 22nd for Gen Xers, the generation just behind Boomers. Johnson & Johnson, however, is even more popular with people over 70 making up 1.1% of a Senior’s portfolio on average.”

Stocks Baby Boomers Love Most:
Apple
General Electric
Microsoft
Facebook
Bank of America
Intel
AT&T
Exxon Mobil
Berkshire Hathaway
Johnson & Johnson

Read original article “Johnson & Johnson and the 9 other stocks Baby Boomers Love Most“.

We do more than just tax preparation. US-TaxLaws is your best source for professional tax preparation and/or financial consulting services that include:

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation
Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services
Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & Trusts, Estate Planning   Bookkeeping   Payroll

Are you 50+? Ready to get serious about retirement?

What Do You Need To Consider When Planning Retirement?

When is the best time to get serious about retirement planning? Some say it’s the 50’s. And guess what, it’s not all about you. It’s about your parent’s too. “It’s important to talk openly with your parents about their financial position and plans,” said Matthew Saneholtz, a certified financial planner with Tobias Financial Advisors. “Be sure your parents have an estate plan in place and long-term care coverage, or at least a picture of their final stages of life, because it might affect you,” he said. “If you know your parents don’t have the money to pay for care on their own, are you willing to use your own savings to help them? Will they rely on Medicaid? Will you take care of them in your own home? These are questions you need to think about, as they could become your dependents.”

Source: Your 50s Is the Time to Get Serious About Retirement Planning“.

Individual Retirement Arrangements (IRAs)
Roth IRAs

401(k) Plans
403(b) Plans

SIMPLE IRA Plans (Savings Incentive Match Plans for Employees)
SEP Plans (Simplified Employee Pension)
SARSEP Plans (Salary Reduction Simplified Employee Pension)
Payroll Deduction IRAs

Profit-Sharing Plans
Defined Benefit Plans
Money Purchase Plans
Employee Stock Ownership Plans (ESOPs)

Governmental Plans

457 Plans
409A Nonqualified Deferred Compensation Plans

Help with Choosing a Retirement Plan

We do more than just tax preparation. US-TaxLaws is your best source for professional tax preparation and/or financial consulting services that include:

Budgeting & Financial Planning

Why You’re Thinking About Your Budget All Wrong

Maggie McGrath of Forbes decided to tackle the subject many of us dislike intensely. BUDGETING. Activities that include budgeting & financial planning are almost painful.

She writes, “Does the thought of tracking your spending every month or living according to a budget sound so torturous that you just… don’t do it? If so, you’re not alone: more than 60% of Americans don’t keep a budget. But while you may not be alone, but you are likely thinking about budgeting in the wrong way.” Maggie sat down with financial expert and author Patrice Washington to talk about why it is that so many people don’t like to budget.

“When I would tell someone to track their spending, they would lie!” Washington told me, recalling some of the clients she’s worked with over the years. “When you’re tracking your spending, you don’t want to look bad. So you stop doing whatever it is you do on Friday nights and you want to look your best.” But, if these are the numbers that you’re going to base your budget on, your budget will be based on a lie.

To see more of Washington’s tips on building a budget — plus how to find things to cut from your spending list even if it feels like there’s nothing you can possibly cut — check out the video and the rest of the article Why You’re Thinking About Your Budget All Wrong in its original format. .

And, if you want to learn more about budgeting, including the popular 50-30-20 rule (it recommends spending 50% of your take home pay on needs, 30% to wants and 20% to savings), check out this article here or this one, here.

Why You’re Thinking About Your Budget All Wrong in its original format.

We do more than just tax preparation. US-TaxLaws is your best source for professional tax preparation and/or financial consulting services that include:

Social Security Spousal Benefits

The 3 Secrets to Maxing out Social Security Spousal Benefits

Social Security Spousal Benefits is not something many of us look into, until necessary. Philip Moeller in his Money.com, Ask The Expert column takes a close look at this benefit, and what you have to do to protect yourself. “If there’s one set of rules worth understanding, it’s spousal benefits.”

Q: My wife was born in 1950 and will be 65 this year; I was born in 1953 and will be 62. As I have earned more in my lifetime, my Social Security benefit is estimated to be larger than hers at full retirement age. But her spousal benefit would be less than half of her individual retirement benefit. When the younger spouse has a higher estimated benefit, what are some strategies to explore? —Jack

Every year, couples leave literally billions of dollars on the table because they make the wrong claiming choices. Here are three secrets to getting this claim right, and how they apply to your situation:

To get spousal benefits, the primary earner must file for retirement benefits first. Spousal benefits can equal as much as half of the amount the person would receive in individual Social Security benefits at full retirement age (FRA). For anyone born in 1943 through 1954, FRA is 66; it will gradually rise to 67 for people born in 1960 or later.
If you file for a spousal benefit before your FRA, you will end up with a smaller amount. You can file as early as age 62 but if you do, you will be hit with benefit reductions. Retirement benefits will rise each month they are deferred between FRA and age 70. Spousal benefits peak at FRA, so there is no reason to defer claiming them past that point.

An early filing will also trigger a Social Security provision called deeming—this means the agency considers you to be filing both for your individual retirement benefit and you spousal benefit. You will be paid an amount roughly equal to the greater of the two benefits. But you lose the opportunity to get increases for delayed claiming on your individual benefits. This is a bad deal.

Use a file-and-suspend strategy. If both spouses defer claiming until FRA, the higher-earning spouse can file and suspend benefits then. This way, the lower-earning spouse can file for spousal benefits, allowing his or her individual retirement benefit to grow due to delayed retirement credits. Then you can each file for maximum retirement benefits at age 70.

So what’s the right approach for you? If you both defer filing, you can file and suspend your benefit at age 66. This will enable your spouse, who will have turned 69, to file for her maximum spousal benefit. Meanwhile, she can continue to allow her individual benefit to grow due to delayed credits up to age 70

Alternatively, your wife can file and suspend at 69, allowing you to file for your maximum spousal benefit at 66 and collect it for four years, while deferring your own retirement benefit until 70. Even though you are the higher earner. this strategy seems likely to maximize your family’s total benefits.

There’s another advantage to waiting until 70: if you die before your wife, she will receive a widow’s benefit that will equal your maximum retirement benefit. (She can only collect the greater of her retirement or widow’s benefit.)

Of course, choosing the best spousal claiming strategy for a couple depends on many factors, including relative ages, finances and health. This is something married partners need to talk about.

To read Philip Moeller’s answer to Jack and other questions, read the full article in its original format: http://time.com/money/3735837/social-security-spousal-benefits-secrets/

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare.

How Much Do Americans Pay in Taxes

How much do Americans pay in taxes?

Some $1.4 trillion in individual income taxes are due to the IRS on April 15. But for many Americans, that’s only the half of it.

A new report from the U.S. Congress’s Joint Committee on Taxation shows that looking only at income taxes misses most of what we pay to the federal government each year.”
Want to read the 32 page Joint Committee on Taxation Report, click here. To read the the original article, click here.

Source: Bloomberg

Why the IRS Won’t Tell Fraud Victims What Identity Thieves Stole

The IRS, TurboTax and A Taxpayer’s Identity Theft

A taxpayers’s identity theft is a worst case scenario for any taxpayer, and especially when the IRS won’t tell fraud victims what identity thieves stole. Tim Loo learned early this year that his name and Social Security number had made their way onto a fraudulent tax return, and immediately wondered whether the identity thief might also have his bank-account details or his kids’ Social Security numbers.To survey the extent of the damage, Loo asked the Internal Revenue Service for a copy of the bogus return. It refused. TurboTax, whose tax-filing software the criminals had used, told him they couldn’t share the fake return with him either, for “privacy reasons.”

The Boston-based physician wondered: Whose privacy? Continue reading →

Tax Professionals Survive 2015 Tax Season

Commissioner John Koskinen sent a message of thanks to tax professionals and their partners for managing to get through a “challenging” tax season, as reported in Accounting Today.

“As the April 15 deadline approaches, I want to thank all the tax professionals and other partners who have helped to make a challenging filing season run as smoothly as we could have hoped,” Koskinen wrote in an email Wednesday. “Every filing season is busy and presents unique issues. This tax season saw hurdles ranging from the tax extender legislation in December to putting in place new provisions of the Affordable Care Act. The work of attorneys, Certified Public Accountants and Enrolled Agents as well as the software industry and payroll community has been extremely helpful—and essential—to running the tax system and helping the nation.”

Koskinen—who has faced his own challenges this tax season dealing with steep budget cuts that sharply reduced IRS customer service hours and personnel—also thanked tax pros for their patience.

“I just wanted to let you know how much we appreciate your hard work and continued dedication—as well as your patience,” he added. “I know tax professionals—as well as taxpayers—have faced long wait times when calling the IRS for assistance. I want you to know it’s frustrating for me as well as IRS employees. This remains a major area of concern for the IRS.”

Koskinen also looked beyond tax season. “While the April 15 milestone will quickly pass, please remember we appreciate the work you do throughout the year helping individual and business clients with extensions, amended returns and compliance issues,” he said. “We look forward to continuing to work with tax professionals and all of our partners in the tax community in the year ahead. Thanks again for your hard work, and congratulations on reaching April 15.”

To view article in original format go to Accounting Today.

Authors Note: We selected the title Tax Professionals Survive 2015 Tax Season because we know – first hand – the number of hours reputable tax professionals devote to their clients.

Find out why US-TaxLaws makes your taxes work for you, and are your best source for professional tax preparation and/or financial consulting services. Find out how we can help you. Give us a call at 619-589-8680.

Personal Tax Preparation Business Tax Preparation Partnership Tax Preparation Corporate Tax Preparation Incorporation-Choice of Entity Business Support Services Corporate Compliance Audit Representation Retirement Tax Planning Wills & Trusts, Estate Planning Bookkeeping Payroll

Millennials Are First To File Early Taxes

Millennials Are Planning to Save Tax Refund

Read an interesting article in Accounting Today,

“The Millennial generation is the most diligent when it comes to filing their taxes early, according to a new survey. Ninety percent of Millennials filed at least one month ahead of the tax deadline, compared to an average of 77 percent for all other age groups, according to a poll of 500 U.S. adults by the consumer insights firm Instantly.

The survey also found that 33 percent of Millennials plan to save their federal and state tax refunds, compared to only 18 percent of non-Millennials, who are more likely to use their refunds to pay down debt and bills. The study also found that 17 percent of Millennials feel a sense of civic pride when filing their taxes, while the majority of non-Millennials feel that taxes are just something they have to do.”Media buzz around tax season tends to focus on last-minute filers, but the study found that most people file early, with Millennials leading the charge,” said Instantly chief marketing officer Andy Jolls in a statement.Instantly also found that more than 82 percent of Americans said they have filed their taxes a month ahead of deadline, while only 4 percent of U.S. adults reported they will wait until April 15 to file their taxes

The survey also revealed that nearly 50 percent of Americans use online tax programs over other filing methods, citing ease of use as the main reason. Twenty percent of respondents said they use a tax preparation service such as H&R Block, while 18 percent still file themselves on paper, and 14 percent rely on an accountant.

In addition, 75 percent of those polled expect to receive less than the average national tax refund of $3,120, or to owe money. Despite the tools and increased convenience available today, there is still plenty of hesitation around filing.

The survey found that 79 percent of respondents were apprehensive about the outcome of filing their taxes. Concerns about filing incorrectly and not getting all the money back that they deserve topped their fears. The biggest usage of tax refund money is paying down bills and debts for 36 percent of Americans.

To read the article in its original format in Accounting Today. To see the complete survey results, click here.”

Update on Earned Income Credit

Increase to Earned Income Credit

The earned income credit applies to working taxpayers that have income falling below certain thresholds. The qualification threshold depends on the number of persons in each family.

The thresholds in 2014 to qualify for this credit include:

No Children: earnings must be less than $14,590, or $20,020 if Married Filing Jointly.
One Child: earnings must be less than $38,511, or $43,941 if Married Filing Jointly.
Two Children: earnings must be less than $43,756, or $49,186 if Married Filing Jointly.
Three or More Children: earnings must be less than $46,997, or $52,427 if Married Filing Jointly.

The tax credits themselves have also increased in 2014, with the maximum received as indicated below:

No Children: $496
One Child: $3,305
Two Children: $5,460
Three or More Children: $6,143

Hey Boomers – want to know where is the best place to live in retirement?

Want to know where is the best place to live in retirement?

Use This Interactive Map on State-by-State Guide to Taxes on Retirees

Is *retirement* in your life plan? Want to know where is the best place to live in retirement? Visit Kiplinger and click on any state in the map for a detailed summary of taxes on retirement income property and purchases, as well as special tax breaks for seniors.

Go over to Kiplinger for more maps including the most tax-friendly and least tax-friendly states for retirees. Read more at http://www.kiplinger.com/tool/retirement

SOURCES: State tax departments, CCH and the Tax Foundation.

IRS to Parents: Don’t Miss Out on These Tax Savers

If you’re a parent, here are several tax benefits you should look for when you file your federal tax return:

Dependents. In most cases, you can claim your child as a dependent. You can deduct $3,950 for each dependent you are entitled to claim. You must reduce this amount if your income is above certain limits. For more on these rules, see Publication 501, Exemptions, Standard Deduction and Filing Information.
Child Tax Credit. You may be able to claim the Child Tax Credit for each of your qualifying children under the age of 17. The maximum credit is $1,000 per child. If you get less than the full amount of the credit, you may be eligible for the Additional Child Tax Credit. For more, see Schedule 8812 and Publication 972, both titled Child Tax Credit.
Child and Dependent Care Credit. You may be able to claim this credit if you paid for the care of one or more qualifying persons. Dependent children under age 13 are among those who qualify. You must have paid for care so that you could work or could look for work. See Publication 503, Child and Dependent Care Expenses, for more on this credit.
Earned Income Tax Credit. You may qualify for EITC if you worked but earned less than $52,427 last year. You can get up to $6,143 in EITC. You may qualify with or without children. Use the 2014 EITC Assistant tool at IRS.gov to find out if you qualify. See Publication 596, Earned Income Tax Credit, to learn more.
Adoption Credit. You may be able to claim a tax credit for certain costs you paid to adopt a child. For details see Form 8839, Qualified Adoption Expenses.
Education tax credits. An education credit can help you with the cost of higher education. There are two credits that are available. The American Opportunity Tax Credit and the Lifetime Learning Credit may reduce the amount of tax you owe. If the credit reduces your tax to less than zero, you may get a refund. Even if you don’t owe any taxes, you still may qualify. You must complete Form 8863, Education Credits, and file a return to claim these credits. Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim them. Visit the IRS’s Education Credits Web page to learn more. Also see Publication 970, Tax Benefits for Education, for more on this topic.
Student loan interest. You may be able to deduct interest you paid on a qualified student loan. You can claim this benefit even if you do not itemize your deductions. For more information, see Publication 970.
Self-employed health insurance deduction. If you were self-employed and paid for health insurance, you may be able to deduct premiums you paid during the year. This may include the cost to cover your children under age 27, even if they are not your dependent. See Publication 535, Business Expenses, for details.

You can get related forms and publications on IRS.gov.

Source: IRS Tax Tips

IRS YouTube Videos:

See If You Qualify for the Earned Income Tax Credit – English | ASL
Earned Income Tax Credit – 2015 – Spanish
Education Tax Credits – English | Spanish | ASL

IRS Podcasts:

Education Tax Credits – English | Spanish

2015 Tax Dates

January 15, 2015

4th Quarter 2014 Estimated Tax Payment Due

April 15, 2015

Individual Tax Returns Due for Tax Year 2014

Individual Tax Return Extension Form Due for Tax Year 2014

1st Quarter 2015 Estimated Tax Payment Due

Last Day to make a 2014 IRA Contribution

June 15, 2015

2nd Quarter 2015 Estimated Tax Payment Due

September 15, 2015

3rd Quarter 2015 Estimated Tax Payment Due

October 15, 2015

Extended Individual Tax Returns Due

Last Chance to Recharacterize 2014 Roth IRA Conversion

January 15, 2016

4th Quarter 2015 Estimated Tax Payment Due

Will you have enough to retire?

Methodology

Retirement is something we want to look forward to. Some have planned this *future* … others, not so much. To get an idea of what you have in contrast to what you will need, CNN’s article “Will You Have Enough To Retire” includes an online calculator.

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This calculator estimates how much you’ll need to save for retirement. To make sure you’re thinking about the long haul, we assume you’ll live to age 92. But you could live to be 100 or incur large medical bills early on in retirement that may raise your costs even further. Social Security is factored into these calculations, but other sources of income, such as pensions and annuities, are not. All calculations are pre-tax.

The results offer a general idea of how much you’ll need and are not intended to be investment advice. The results are presented in both future dollars (at retirement) and today’s dollars, which is calculated using an inflation rate of 2.3%.

USE CNN ONLINE CALCULATOR http://money.cnn.com/calculator/retirement/retirement-need/

How we calculate your savings goal

First, we determine what your income will be at the time you retire by growing your current income at an annual rate of 3.8% (the inflation rate of 2.3%, plus the salary growth rate of 1.5%). We then assume you can live comfortably off of 85% of your pre-retirement income. So if you earn $100,000 the year you retire, we estimate you will need $85,000 during the first year of retirement. For each subsequent year, we increase your income need by 2.3% to keep up with inflation. We then factor in Social Security by subtracting your estimated benefits (more on that below) since that income will reduce the amount you will need to save.

The second step is to calculate the total savings you will need at the time you retire, in order to generate enough income for each year of retirement. To do this, we determine what it would cost to purchase a fixed income annuity, with inflation-adjusted payments, using a discount rate (or rate of return) of 6%. The cost to purchase this hypothetical annuity is your target savings goal.

How we calculate the amount you will save

To figure out how much you will save by the time you retire, we first estimate your future income by growing your current income at a rate of 3.8% (the inflation rate of 2.3%, plus the salary growth rate of 1.5%). Then, we determine what the sum of your annual contributions will be between now and retirement. We assume your current savings and future contributions are invested and will earn an average annual rate of return of 6%.

How we estimate Social Security benefits

We estimate your Social Security benefits based on the assumption that you will have worked at least 35 years and will start collecting benefits at age 67. For most people who are working today, that’s considered full retirement age. If you plan on retiring after age 67, we assumed the benefits are invested (along with your savings) and grown at the same average rate of return of 6%. We use your estimated pre-retirement income to calculate your estimated annual Social Security benefits, based on current benefit formulas and accounting for inflation. To better understand your actual Social Security benefits, please visit www.ssa.gov.

Sources: Social Security Administration; Federal Reserve of Philadelphia; Department of Labor; CNN http://money.cnn.com/calculator/retirement/retirement-need/

2015 SCORE Workshops in San Diego

Continuing Education for the entrepreneur, start-up and small business owner.

Note: Fees apply for most workshops.
Click on linked titles below for additional information and to register.
Access their calendar here.

Starting a Restaurant – January 20, 2015 FREE 9:00 a.m. – 12:00 p.m. PST
(Poway, CA)
This workshop is a MUST if you are serious about owning and operating your own restaurant! These essential aspects of a restaurant project will be discussed: Concept Planning…

Tax Considerations for Small Businesses – January 21, 2015 FREE 9:00 a.m. – 11:00 a.m. PST (Downtown San Diego, CA) See Parking Notes Below.
There are several types of taxes that businesses must pay during the calendar year. Understanding each one of these tax liabilities, being certain to meet the time requirements (and save penalty…

Advanced LinkedIn Marketing Hands On Laptop Training – January 21, 2015
6:00 p.m. – 8:30 p.m. PST (San Diego, CA)
This is an intensive hands on workshop designed for business owners that want to take their LinkedIn presence to the next level. It’s a packed agenda including: Advanced Networking…

Bing Ads for Small Businesses – January 23, 2015 FREE 8:30 a.m. – 10:00 a.m. PST
(Fashion Valley San Diego, CA)
Bing Ads is a robust collection of tools and information you can use to place advertisements on the web. Bing Ads can help you: Connect with customers who are engaged and likely to spend more…

Business Plan B: Setting Goals and Telling the World – January 24, 2015
9:00 a.m. – 12:00 p.m. PST (Kearny Mesa, CA)
Having identified your target market and competitive advantage in the first session, this workshop helps you develop a mission statement, preliminary goals and a marketing plan.

Notes on Parking in Downtown San Diego

The SBA/SCORE office is located across India St. from the America Plaza Trolley stop and one block away from the Santa Fe Depot Train and Trolley Station.
Parking is available in our building (entrance is on Columbia Street)
(Credit or Debit Only) $2.00 per/30 minutes – Maxium $24.00
Early Bird Special $12 (In by 9AM – Out by 6PM) – All prices subject to change without notice.
Additional parking is available in the area at indoor and outdoor lots – prices vary.
All metered street parking is limited to the time designated on the meter (usually 2 hours.) You must move your car after the time is up. You cannot add money to the meter to extend your parking time.
Allow extra driving time as construction around building may cause traffic delays.

SCORE is a Resource Partner of the U.S. Small Business Administration

SCORE services are provided without regard to race, color, religion, gender, sexual orientation, national origin, age, disability, genetic information, marital status, amnesty, or status as a covered veteran in accordance with applicable federal, state and local laws. Persons with disabilities may request reasonable special accommodations with a two week advance notice. Contact: Jill Andrews, 550 West C Street, Suite 550, San Diego, CA 92101 or (619) 727-4885. The material in this email is based on work supported by the U.S. Small Business Administration under cooperative agreement #SBAHQ12 S-0001. Any opinions, findings and conclusions or recommendations expressed in this email are provided by SCORE and do not necessarily reflect the views of the SBA.

To find a SCORE Chapter near you visit: www.score.org or web search SCORE with your city or state.

Click here to find an SBA District Office near you.

Reminders For This Tax Season

Have you set up your appointment to have taxes done?

The following are large items that are already set in law that you can count on (literally and figuratively) for this tax season. Don’t forget about income limitations and phase outs.

Child Credits.

For each qualifying child under age 17 knocks up to $1,000 from your tax bill.

College Education.

Two big credits are available. The American Opportunity Credit can reduce your tax bill by up to $2,500 per eligible student or up to $2,000 through the Lifetime Learning Credit.

0% Capital Gains Rate.

This capital gains rate is available to all taxpayers in the 10% and 15% tax brackets. Married taxpayers qualify for the 0% rate if their taxable income is $73,800 or less, for single taxpayers $36,900 or less, and head of household is $49,400. To see the 2015 Tax Brackets.

Tax Free Gains on Home Sales.

Married couples can exclude up to $500,000 from their gain from their income from the sale of their home, for single taxpayers the maximum exclusion is $250,000. Ownership and occupancy rules apply.

Energy Saving Credits.

You can claim a credit for up to 30% of the cost of buying and installing solar panels, solar water heaters, geothermal heat pumps and small wind energy systems.

WHO WANTS A FREE TAX TIP?

Facebook, GE, Johnson & Johnson and other stocks that Baby Boomers love.

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Increase to Earned Income Credit

Want to know where is the best place to live in retirement?

If you’re a parent, here are several tax benefits you should look for when you file your federal tax return:

Methodology

Continuing Education for the entrepreneur, start-up and small business owner.

Have you set up your appointment to have taxes done?