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Businesses:

• Monthly payroll deposits for November due on December 15

Retirement Establishment Deadlines

• Profit Sharing / Money Purchase – December 31
• 403(b)(7)/ Roth 403(b)(7) – December 31
• 401(k)/ Roth 401(k) – December 31
• Individual K/ Roth Individual K – December 31

Individuals:

Retirement Plans Contributions

• Simple IRA – made per pay period
• 403(b)(7)/ Roth 403(b)(7) – made per pay period
• 401(k)/ Roth 401(k) – made per pay period
• Safe Harbor 401(k)/ Roth Safe Harbor 401(k) – made per pay period
• Individual K/ Roth Individual K – made per pay period

 

Retirement Establishment Deadlines

• Individual K/ Roth Individual K – December 31
• 403(b)(7) / Roth 403(b)(7) – Plan year end (December 31)
• 401(k) / Roth 401(k) – Plan year end (December 31)
• Profit Sharing / Money Purchasing – Plan year end (December 31)

Medical Costs

A portion of special diet costs can qualify as a medical expense. If the diet is prescribed by doctor for medical reasons, then the excess amount of costs that you have for foods over what you would normally eat is treated as a medical expense.

Fees for alternative medicine practitioners can be medicals too, according to IRS. Things like acupuncturists, chiropractors, Christian Science practitioners. Same goes for doctor-prescribed treatment at a health institute.

Amounts aid for repairing hearing aids also qualifies. Thus flex plans can reimburse these costs if they choose to do so. This also includes the cost of batteries, if not covered by the flex plan. You just add them to medical expenses and deduct them on Schedule A to extent your medical expenses exceed 7.5% of your AGI.

Meals and Incidentals

 For meals and incidentals only, the Service’s rates remain the unchanged; $65 a day in high-cost areas and $52 elsewhere. Self employed persons who travel are allowed to use these rates in lieu of keeping receipts, but their lodging expenses must be substantiated separately. They can not use the full $242/$163 per diems.

The per diem rate for incidentals expenses stays the same too… $5 per day

Insurance

Swapping life insurance or annuities for long term-care policies won’t be taxed. Congress changed the law to allow such tax deferred exchanges after 2009. Also long-term-care insurance can be offered as part of an annuity contract, and no tax is due if the insurance premiums are paid with the annuity’s cash value. Also the cash value in the annuities and life insurance can be used free of tax to purchase long-term-care coverage.

Police Officer’s Disability Pension

Court ruled that income not taxable after attaining age 50. If a patrolman who was age 50 and has had at least 20 years of service under his belt was eligible for retirement pension.  If you became a disability pension beneficiary you were paid 50% of the base pay of a patrolman who had reached the age of 50 and has had 20 years in the field. Disabled police officers received the same pay as a police officer who has qualified to retire, even if they did not have suffient years to retire.

            The IRS argued that the benefits paid after turning age 50 were taxable retirement income. It cited Tateosian, TC Memo 2008-101, where the Tax Court held that because a disabled pensioner’s disability benefits effectively terminated under Minnesota law once he turned age 50 and became a deemed service pensioner, his payments could no longer be characterized as compensation for personal injuries under SS104(a) for federal income tax purposes.

            The Tax Court determined that the benefits were nontaxable and rejected the IRS’s reliance on Tateosian.  Instead the Court looked to precedent from the Ninth Court, to which an Appeal case would be heard and determined that the payments were not retirement benefits because they were determined with reference to his age ao years of service.

            For purposes of qualifying for retirement, the fact that the plan deems time spent on disability as equivalent to time spent working does not change the treatment for federal income tax purposes. So if someone completed less than 20 years of service, they would not be eligible for retirement payments; therefore, the character of the payments are nontaxable disability payments for federal income tax purposes.

• Beginning July 1, drivers can deduct 55.5 cents per mile for using their private vehicle for business-related travel.
• The new mileage rate for deducting medical and moving expenses is 23.5 cents per mile, up 4.5 cents from 19 cents.
• These mileage rates are also used by the government and many companies as a benchmark to determine how much to reimburse their employees for fuel costs, the IRS said. The costs that are reimbursed by an employer don’t have to be reported as income for tax purposes, unless they exceed the IRS’s payment limit.

Mortgage Interest

Interest paid on mortgage for house that was never built is deductible, Tax Court says. Interest deductible on the loan for 24 months after construction begins. IRS regulations on deducting interest on a loan for a home under construction don’t condition deductibility on the house’s completion.

Businesses:

Monthly payroll deposits for October due on November 15

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Individuals:

Retirement Plan Contributions

• Simple IRA – made per pay period
• 403(b)(7)/ Roth 403(b)(7) – made per pay period
• 401(k)/ Roth 401(k) – made per pay period
• Safe Harbor 401(k)/ Roth Safe Harbor 401(k) – made per pay period
• Individual K/ Roth Individual K – made per pay period

October – Important Tax Dates for Businesses and Individuals

 Businesses:

•  Monthly payroll deposits for September due on October 15
• 3^rd Quarter Payroll Reports due by October 31
• 3^rd Quarter Sales Tax report and payment due on October 20

 Retirement Plans

• Simple IRA Establishment Date is October 1
• Safe Harbor 401(k)/ Roth Safe Harbor 401(k) Establishment Date is October 1

 Retirement Plans for Sole Proprietors and Partnerships

• SEP  – Establishment Date is October 15 ( if extension taken)
• SEP – Contribution Date is October 15 (if extension taken)
• Simple IRA – Contribution Date is October 15 (if extension taken)
• Profit Sharing/ Money Purchase – Contribution date is October 15 (if extension taken)
• 403(b)(7)/ Roth 403(b)(7) – Contribution Date is October 15 (if extension taken)
• 401(k)/ Roth 401(k) – Contribution Date is October 15 (if extension taken)
• Safe Harbor 401(k)/ Roth Safe Harbor 401(k) – Contribution Date is October 15 (if extension taken)
• Individual K/ Roth Individual K Contribution Date is October 15 (if extension taken)

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Individuals:

 Extension Due Date for Income Taxes is October 15

 Retirement Plans Contributions

• Simple IRA made per pay period
• 403(b)(7)/ Roth 403(b)(7) made per pay period
• 401(k)/ Roth 401(k) made per pay period
• Safe Harbor 401(k)/ Roth Safe Harbor 401(k) made per pay period
• Individual K/ Roth Individual K made per pay period