Two important tax deadlines in June

Don’t overlook the following two deadlines this month if they apply to you:

* The second quarterly payment of estimated income tax for 2014 is due on June 16.

* If you have foreign bank, savings, or investment accounts that exceeded $10,000 in 2013, you are required to file “Treasury Department Form 114″ by June 30, 2014.

Form 114 is new this year, replacing the prior Form 90-22.1. This report is not a form that you file with your income tax return. Rather, it is a separate form that must be filed electronically with the Treasury Department in Detroit. The report must be received by the Treasury Department by the June 30 due date. No filing extension is available. Penalties for failing to meet this filing requirement are severe and can include jail time.

Contact our office if you need details about these requirements or filing assistance.

Don’t make these common IRA mistakes

These days we need to do all we can to boost our retirement savings, and tax breaks can be a big help. Using a traditional IRA to build your nest egg is a great idea. Just be sure you don’t make any of these common IRA mistakes.

THE WRONG INVESTMENTS. Don’t put tax-free investments, such as municipal bonds, in an IRA. You’ll end up paying ordinary income tax on money that wouldn’t have been taxed, or you’ll sacrifice earnings for a tax benefit you’ll never receive.

NO CATCH-UP CONTRIBUTIONS. Be aware that if you’re 50 or older, you can contribute an extra $1,000 to your IRA each year.

THE WRONG BENEFICIARY. Your choice of beneficiary can affect how quickly IRA funds must be distributed. The longer money stays in an IRA, the longer it grows tax-free.

EARLY WITHDRAWALS. You’ll pay regular income tax as well as a 10% federal penalty and a 2.5% state penalty on early withdrawals from your IRA unless an exception applies. Early withdrawals are those you take when you’re under age 59½.

MISSED RMDs. You are required to take distributions from your IRA when you reach 70½. You have until April 1 of the year after you turn 70½ to begin withdrawals. The penalty for withdrawing less than the required amount is 50% of the shortage.

IRA mistakes can be costly. If you’d like answers to your IRA questions, give us a call.

Women and Money – Statistics

Facts about money and the female life span:

  • For every dollar a man earns, a woman earns 77 cents, according to the most recent Bureau of Labor Statistics. (In 1970, that number was 69 cents. At this rate, it will take more than 150 years to level out that discrepancy.)
  • Almost half of working women earn less than $6.33 an hour.
  • Women represent 40% of the workforce, but only 5% of senior executives.
  • Married Baby Boomer women can expect to outlive their husbands by 15-20 years on the average.
  • Single mothers and the 20 million displaced homemakers are 4x more likely than others to be poor.
  • Fifty percent of women over 65 are widows. Median yearly income: African Americans, $5,938; whites, $9,366.
  • Eighty-seven percent of the elderly poor are women.
  • A woman who works full-time for 40 years will earn $523,000 less than her male counterpart. (At 65 years of age, that extra half a million dollars could keep her from becoming one of the elderly poor.)