Winter 2013 Volume XVIII, No. 2 Newsletter

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Winter Notes:

winterSince our last newsletter, we’ve been quite busy implementing changes to stay current with today’s technologies. We have previously discussed our goal of e-filing 100% of individual tax returns which we accomplished this year. We also set up secure electronic portals for each client, so that we could receive confidential information and documents. Most of you have used these portals with great success. Our stated goal of going 100% paperless is on track – we have scanned virtually all client related paperwork & tax forms which now reside on our secure servers. My partner, Travis Raml CPA, leads these initiatives – he and I and are now beginning our third year together. Behind the scenes, Ellen Silverstein begins her twentieth year as my associate working on the corporate side and Jeff Linker returns for his nineteenth year as our associate working on the individual tax side. In addition, Becky and Robin continue as our fabulous bookkeepers, providing their expertise with Quickbooks. We are so excited to have migrated many our clients to the Quickbooks on-line software, which has proved to be a quality accounting package.

My personal goal was to increase our corporate and entity business during 2013. I am very happy to have accomplished this goal and am grateful for all of your business. Special thanks to everyone for the many client referrals during the year - - they are very much appreciated. I really enjoy working in my profession and assisting folks with their accounting, taxes and finances; I am certain this enthusiasm shows whenever I meet with a new or existing client. One of my goals for 2014 is to increase our business in the area of personal financial planning, and to that extent, I invite each of you to visit with us and explore how we can help you to meet your goals and increase the quality of your life. We don’t sell any products here at our firm, instead we are your trusted advisors.

During the course of the year, we have many Baltimore Orioles baseball tickets & Maryland Terrapin basketball tickets. If you are interested in attending a game, please don’t hesitate to call.

As we head into what promises to be a very busy & challenging tax season, I would like to thank the many individuals who came in to visit with us for income tax planning. I think you’ll agree that it was certainly time well spent.

Five Simple Steps for Maximizing Your Business’ Use of Quickbooks:

  1. Decide which version of QuickBooks is right for you. The first decision is the online or desktop version. Pros and cons exist for both, but ultimately, your comfort with cloud-based solutions will probably dictate which direction you go. Other decisions would include home or professional editions.
  2. Correctly set up your QuickBooks skeleton at the beginning. The “skeleton”, or basic infrastructure of QuickBooks is made up of several components: Vendors, Customers, Employees, Chart of Accounts/Company, and Banking. Since these elements provide the foundation on which your QuickBooks resides, making sure they’re set up correctly from the get-go will save you from lost time and headaches down the road.
  3. Take advantage of QuickBooks built-in efficiency boosting tools. Whether it’s the automated speed of Memorize Transaction, Batch Invoice, Memorize Reports or Process Multiple Reports, these tools will add greater efficiency to your accounting process.
  4. Reconcile. Reconciling your QuickBooks activity with monthly bank statements is a must for verifying the accuracy of your accounting records and producing financial statements. You can sync QuickBooks directly with your online banking service, credit cards, and loans, and reconciling monthly can help you identify and deal with issues before they stack up and cause major problems.
  5. Institute proper back up procedures. Because your company’s financial data is worth it. Also always open the correct backup.

Thanks to Tom Burtzlaff of CMIT Solutions of Columbia for providing his insights. Tom can be reached at 443-542-5553.

Tax Saving Ideas for 2013 & Beyond:

  • Use the tax free gains in your home. Individuals can exclude up to $250,000 of gain in their primary residence, making it one of the greatest tax shelters out there. Married couples have a $500,000 exclusion.

  • Keep your taxable income down by taking advantage of pre-tax deductions such as 401(k), dependent care and flexible spending accounts. This strategy may help high income earners avoid the new Medicare surtax and the new investment income surtax.

  • Make gifts to family members. You can make tax free gifts of up to $14,000 per individual each year.

  • Consider a Roth IRA. Once you fund money into a Roth IRA on an after-tax basis, all future growth and distributions are tax-free.

  • Open a 529 College Savings account. The money you put away in a 529 college savings plan grows tax-free and future withdrawals for college education expenses are tax free.

  • Beat the capital gains tax by exploiting the 0% rate. Those in an ordinary income tax bracket of ten or fifteen percent can sell stock at a zero percent gains rate. For 2013, a couple can have up to $72,500 in taxable income (singles at $36,250), and still be in the fifteen percent tax bracket.

2013 Dollar Limitations for Retirement Plans:

Annual dollar limit for defined contribution plans, SEP’s

$51,000

Maximum salary deferrals for 401(k), 403(b) plans  

$17,500

Catch-up contribution limits for 401(k), 403(b) plans  

$5,500

Maximum salary deferral for SIMPLE IRA plans  

$12,000

Maximum IRA contribution  

$5,500

Catch-up contribution limits for IRA’s 

$1,000

Social Security taxable wage base   

$113,700

 

Show Your Enthusiasm, it’s Contagious:

We all enjoy working around enthusiastic people. They inspire us and motivate us to give more and to be better people. Employers have told us that when they evaluate job applicants, they not only look at their skill and experiences, but they also look for those who demonstrate enthusiasm. As they have said, job candidates who demonstrate positive attitudes have an advantage over those who display negative or lackluster attitudes. Employers are increasingly worried that negative applicants will not get along with others at work, will treat customers poorly, and may not put much effort into their work. Here are a few ways that you can display enthusiasm at work:

  • Make sure your enthusiasm comes across as sincere. Even non-verbal cues can reflect a lot about your enthusiasm.
  • Use positive communication in your e-mails and other correspondence. After drafting an e-mail, reread it to make sure it has a positive focus.
  • Proactively approach colleagues to offer assistance or seek out tasks and projects. Show initiative.
  • Take time for hobbies to reduce stress. It’s amazing how exercise or having fun can alter your mood.
  • Have passion for your work to keep you excited and keep your enthusiasm high, even during stressful times.
  • Focus on being positive. Try to look at the positive aspect of situations you find yourself in. If you find yourself surrounded by negative people, you may need to spend less time with them.
  • Show patience. Having patience enables you to relax and not feel so stressed. We live in a very impatient world.

Thanks to Joyce E. A. Russell for her insights.
Joyce is the vice dean and the director of the Leadership Development Program at the University of Maryland’s Smith School of Business.

Enjoy the Holidays
and we'll see you soon!

 

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Matthew R. Horowitz, C.P.A.
(410) 312-7622 • email
10015 Old Columbia Rd. Suite B-215, Columbia, Maryland 21046