ployment taxes. Whatever the job, you just need to make sure their wages are appropriate for the work they perform. Of course, when a child has earned income, he is eligi-
ble to contribute to a Roth IRA— the lesser of the total earned income or $5,500. You should strongly consider a Roth IRA for a child, because contributions are made with after tax dollars and withdrawals are tax free after the child reaches 59½. There are also no mandatory withdrawal rules for a Roth IRA. Providing even more flex ibility, you are allowed to withdraw your principal contributions from a Roth IRA at any time without pay- ing a penalty or income tax.
number three CAREFULLY CONSIDER
YOUR BUSINESS STRUCTURE.
Structuring your business as an S-corp can help min-
imize self-employment taxes. If you have real estate hold- ings, you may consider a family limited partnership and transfer minority ownership to your children for estate planning purposes. Limited liability companies or S-corp status may also help you minimize your personal liability. Certain business structures may increase your adminis- trative costs, but you need to consider the after-tax ben - efits of your decision.
number four PAY ATTENTION TO
HOW YOU DEDUCT HEALTH INSURANCE PREMIUMS.
Most taxpayers know insurance premiums may be de- ductible on Schedule A. You may also deduct expenses you pay for medical and dental care for yourself, your spouse, and your dependents. However, your deduction is limited to the amount that exceeds 10 percent of your adjusted gross income. However, as a self-employed individual and providing
you are not eligible for an employer-sponsored health plan through your spouse’s job, your health insurance may be deductible on page 1 of Form 1040, line 29. This should decrease your overall taxable income.
14IGEORGIA REALTOR®
number five TAKE THE HOME
OFFICE DEDUCTION YOU ARE ENTITLED TO.
To be eligible for a home office deduction, the space must
be used regularly and exclusively as your principal place of business, or as a place where you meet or deal with clients in the normal course of business. As a real estate agent, if most of your business is outside your home, but you con- duct substantial administrative and management tasks, such as billing clients, bookkeeping, etc. for your business at home, you may qualify, provided you have no other fixed location where you could conduct these activities. You may be able to deduct a portion of your mortgage
interest, real estate taxes and homeowners insurance. While the IRS simplified the home office deduction cal- culation in 2013, you may be eligible for a larger deduc- tion if you calculated using actual expenses.
number six KEEP GOOD RECORDS TO
ENSURE YOU DON’T MISS OUT ON DEDUCTIONS.
Consider keeping a travel log in your car to record
mileage and vehicle maintenance. You should also use a separate bank account and business credit card for out of pocket expenses. With good records, you should be able to take tax deductions that will leave more money in your pocket. Well-kept records will help you document your business-related expenses, and if you are ever audited, your deductions should have the required documentation to satisfy the IRS.
number seven CONSIDER HAVING
YOUR BUSINESS OWN YOUR AUTOMOBILE.
While most real estate agents opt to track the business miles they put on their personal auto, it may be more
NOVEMBER I DECEMBER 2014
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42