3 Keys to Mid-Year Retirement Planning Checkup

Retirement Planning, Retirement Savings Checkup, Retirement Plan, Ramsay CPA, Mahtomedi, MNWith Q2 firmly in the rearview and Q3 of the 2016 calendar year off to a strong start, now is the perfect time to review your retirement savings goals and opportunities.

From contributions to spending and net worth, give your retirement investments a mid-year checkup to make sure your retirement plans are still on track. Here are three keys to any checkup worth its salt.

1. Adjust Your Annual Contributions.

Whether you contribute to a 401(k) or to Roth IRAs, you still have time to fine-tune your annual contributions to maximize your retirement savings. If you don’t already belong to your employer’s retirement plan, join as soon as you can. If the plan allows for contributions, review your contribution amount to take advantage of the opportunity to save for your retirement.

The maximum annual salary deferral contributions allowed for 2016 are $18,000 to 401(k) or 403(b) plans and $12,500 to SIMPLE plans. If you are 50 or older by the end of the year, your plan may allow you to make additional catch-up contributions of $6,000 to 401(k) or 403(b) plans and $3,000 to SIMPLE plans.

If an employer’s retirement plan is not an option, you can still contribute toward your retirement via a traditional or Roth IRA. For 2016, you can contribute a maximum of $5,500 ($6,500 if you are 50 or older) or your taxable compensation for the year, whichever is less.

2. Rebalance Your Net Worth.

From Brexit to the immanent presidential election, this year’s events have resulted in a volatile stock market. If you are near retirement and see a big fluctuation in your net worth in 2016, perhaps you have too much invested in stocks. While the bull has stampeded throughout the US stock market in recent months, an unstable economic climate could quickly curtail the bear’s hibernation.

3. Stick to Your Spending Budget.

Many of us overspend during the holiday season, resolve to be more frugal in the new year and successfully adhere to a stricter budget for the first several months. However, much like diet and exercise resolutions, summertime can throw a wrench in our plans and reset the cycle. Mid-year is a good time to check your budget and see if you are spending too much money. Consider increasing the salary deduction percentage if you aren’t maxed out on your 401(k) contributions yet. Less cash in the bank might take a little getting used to but it will help you achieve your budgetary goals.

Confused about which retirement plan is right for you? Ramsay & Associates can analyze your needs and help you understand which plan makes the most sense for your financial circumstances. Contact us today to learn more!

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Happy Fourth of July!

Happy Fourth of July from everyone at Ramsay & Associates. We hope you have a safe and wonderful Fourth!

Happy Fourth of July, Ramsay and Associates,  CPA, Mahtomedi, MN

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Updated Mileage Rate for 2015

a car is on a calculator. cost of gasoline, wear and insurance.With the new year comes change, and in this case, an updated Standard Mileage Rate (SMR) from the IRS.

For business miles driven in 2015, the SMR is 57.5 cents per mile, up from 56.0 cents in 2014. This increase in the rate is even better when one considers the plunge in gas prices over the last six months – locally we’re seeing regular unleaded under $2.00 per gallon, and in some places under $1.90.

A bigger deduction that costs less to create? That’s an unusual win-win for taxpayers.

Also, remember to keep a mileage log showing the miles driven, the date, and what the business purpose was. This comes up routinely on audit, and not having the documentation is one of the biggest ways taxpayers end up owing the government.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Tax Extenders Bill Passes – With Two Weeks To Spare

Irs Federal Income Tax Forms 1040 And Schedule DBusinesses, individuals, and CPA’s around the country got an early holiday gift today as the Senate passed a tax extenders bill the President is expected to sign into law later this week.

The extender bill is quite similar to most we’ve seen in the past – this is the 6th tax extender bill passed near (or after) the end of the year in the last decade. This one puts back into place as of 1/1/14 a large number of benefits popular among taxpayers, but only keeps them in place through 12/31/14, so this debate will come again next year, but we’re happy to have these for now.

Among the more popular items extended for 2014:

  • $500,000 Section 179 limitation with a $2 million investment cap, up from the $25,000/$500,000 that would have been
  • 50% bonus depreciation on new fixed assets in service by 12/31/14
  • The Research and Development Tax Credit
  • Exclusion from income up to $2 million of debt forgiven on a principle residence foreclosure or short sale
  • $250 deduction for out of pocket expenses for teachers
  • Option to deduct sales taxes instead of state and local income taxes
  • Deduction of certain mortgage insurance premiums
  • Deduction of up to $4,000 for higher education tuition and fees
  • Ability to transfer up to $100,000 from an IRA to a charity with no tax
  • Ability to deduct up to $250,000 of qualified leasehold improvements up front
  • 15-year life for qualified leasehold improvements

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Waiting on Tax Renewals – In Santa’s Bag?

Irs Federal Income Tax Forms 1040 And Schedule DAs the end of the year approaches, we’re seeing the usual jockeying by Congress to clear their calendar of easy items before they all head home for the holiday break, and come back to a lame duck Congress and a President with nothing to lose. In all of this, the one thing missing so far is a tax extension bill.

The House and Senate had reached a compromise a few weeks back to extend the expired tax breaks in the short run, but that bill was threatened with veto by the President who thought it favored businesses and the wealthy over middle and low income Americans. The President also wanted extensions on the middle and low income tax breaks to run through 2018, an apparent attempt to keep a future Republican President and Congress from undoing what he’s done. This bill is dead.

Now, there is another bill coming out of the Republican controlled House to simply extend all of the expired items for the 2014 tax year, but Senate Majority Leader Harry Reid has indicated that it might not come up in the Senate, as they need to pass both a bill to fund the Federal government and a military funding bill before they can get to the tax extenders.

Either way, this will be yet another year that doesn’t see the tax code actually resolved until well after the end of the year, meaning confusion for taxpayers. Stay tuned.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.