The Mistake That Turned My Refund Into a Tax Bill

February 20, 2013

This past weekend I decided to prepare my 2012 tax return.  I typically like to do this early in the year so that I get my tax refund sooner rather than later, but something very strange happened to me this year: I ended up owing the IRS money!  This is unusual for me.  I’m usually getting money back, but call it a case of bad luck or just Murphy’s Law, after writing last week’s blog post on how to estimate the right number of allowances to claim on your W-4 so that you end up close to breaking even with the IRS, I ended up NOT breaking even with the IRS.  WHAT WENT WRONG? Continue reading “The Mistake That Turned My Refund Into a Tax Bill”

How to Turn Your Investment Lemons Into Lemonade in the Next Two Days

December 29, 2011

We usually wait until April 15th to worry about taxes, but the time to do something about them is mostly well before that. Some examples include contributing to your employer’s retirement plan and flexible spending accounts. But there is also one thing that you can do right now if you have investment losses outside of your retirement plan.(I know I do and if you have any taxable investments, you probably do too). Here’s how you can turn losses into extra cash on April 15th: Continue reading “How to Turn Your Investment Lemons Into Lemonade in the Next Two Days”

Reimbursing Employees for Business Expenses: Tax Benefit or Tax Bomb?

April 19, 2011

Since I had to write a big check to Uncle Sam last week, I wanted to share my family’s experience with unreimbursed employee expenses and the unintended impact it could have on you and your employees.

There are two ways an employer can choose to pay employees in order to reimburse them for out of pocket expenses for costs dealing with overnight travel, business use of their vehicle, home office use, and other business related expenses. Continue reading “Reimbursing Employees for Business Expenses: Tax Benefit or Tax Bomb?”

Employee Communications: Last Minute Tax Tips

April 05, 2011

As I was conducting a workshop last week focusing on health insurance coverage, an employee asked if he could put additional money in his Health Savings Account (HSA) above and beyond what the employer contribution was.  “Of course!!” I said, and even better, if he made the contribution prior to April 18th it could be used as a deduction for his tax return NOW.  So it got me thinking about other tips that could be shared with employees over the next few weeks to help them muster through the chore of doing their taxes and save a few extra bucks. Continue reading “Employee Communications: Last Minute Tax Tips”

The Impact of Being an HCE

February 15, 2011

Some of your employees may have recently received a letter in the mail notifying them that they are considered an HCE – highly compensated employee.  The good news is that being an HCE means a nice paycheck, since the employee would have made at least $110,000 in 2010.  The bad news is that because of their HCE status, their ability to contribute to the company 401(k) may be limited.  Continue reading “The Impact of Being an HCE”

Trends in Employee Benefits: In Plan Roth Rollovers

January 11, 2011

As if the Roth vs. pre-tax 401(k) contribution decision isn’t enough already to cause confusion for employees, now the IRS has allowed employers to offer in-plan Roth rollovers for eligible rollover distributions.  As part of the Small Business Jobs Act of 2010, employees can take advantage of this opportunity for distributions made after September 27, 2010 if their employer adds the in-plan Roth rollover option through a plan amendment.  Plan sponsors of a 401(k) or 403(b) were able to add the feature in late 2010, and a 457 government plan may adopt an amendment to include a designated Roth account for in-plan Roth rollovers after December 31, 2010. Continue reading “Trends in Employee Benefits: In Plan Roth Rollovers”