Flexible spending accounts (FSAs) allow taxpayers to set aside pre-tax dollars to pay for out-of-pocket medical expenses. The drawback has been the fact that unused amounts each year are forfeited. Plans could provide a 2½ month grace period to use up unspent set-asides.

Now a change announced by the IRS adds more flexibility to these accounts. Plans can be modified by employers to allow up to $500 of unused amounts to be carried over into the following year. Health FSAs cannot have both the old 2½ month grace period and the $500 carryover; they can have one or the other (or neither).

Take Note - Don't Miss Out

• IRS will open the 2014 filing season on January 31, a 10-day delay due to the October government shutdown.
• January 31 is the deadline for employers to provide 2013 W-2s to employees.
• Payers must furnish payees with Form 1099s by January 31. The deadline for providing Form 1099-B to customers is February 18.
• January 31 is the deadline for employers to file annual federal unemployment tax returns.

a Quick Reminder that 1099 reporting due in January.

Nearly every company, large or small, has to file Form 1099-MISC with the IRS and send a copy to recipients by January 31, 2014.

You use Form 1099-MISC to report miscellaneous payments to non-employees. This includes fees for services paid to independent contractors, such as consultants, lawyers, cleaning services, and others. Generally, you don't report fees paid to corporations, but there are exceptions (payments to lawyers, for example).

Reminder! If you have a rental property and pay a contractor, such as a landscaper or pool cleaner... they are now required to be issued a 1099 or your deduction may be jeopardized.

For details or filing assistance, contact our office.

Do you want to simplify your tax return, yet still claim a deduction for your home office?  Beginning in tax year 2013 (returns that we will file in 2014), taxpayers may use a simplified option when figuring the deduction for business use of their home.  

Get 'extra credit' for your kids in college

The price tag on a college diploma keeps going up, but at least you might be able to salvage some tax benefits if you're paying the tab.

An Example: If your child is attending college this fall, you may have a chance to claim an enhanced tax break for higher education expenses.