2/24: Name Change and IRS Refunds; Dates to Remember; Reducing 2013 Taxes

Tax Snacks: Bite-size tax news and information on the fly

Tax Snacks

Don’t let a name change hold up your IRS refund:


Failing to report a name change to the Social Security Administration (SSA) can create an apparent mismatch between that agency and the IRS. This often leads to an inquiry that must be resolved before the IRS will issue your refund. If you recently divorced, remarried, adopted a dependent child or for any other reason changed your name or a spouse or dependent’s name that will appear on your tax return, you should obtain Form SS-5 and file it with the SSA prior to filing your return. The SSA can be reached at 1-800-772-1213, and you can find a copy of Form SS-5 and instructions here.

Upcoming dates to remember:

  • February 28 – Forms 1099/W-2 (and related 1096/W-3) must be mailed to IRS.
  • March 17 – Tax returns or extensions for calendar year-end Subchapter C and S corporations must be filed with the IRS.
  • March 17 – Existing Subchapter C corporations wishing to convert to S corporation status effective 2014 must file election Form 2553 with the IRS.

Time travel! What can you do now to reduce your 2013 taxes?

Even those of you without a tricked-out Delorean and a flux capacitor (I may be dating myself with that reference) may be able to take action now, in 2014, to lower last year’s taxes by using some common retirement plans. For those who qualify, here’s how:

  1. Make a deductible contribution to a conventional IRA. This can lower your income by as much as $5,500. If you turned age 50 by the end of last year, you also can contribute another $1,000, known as a “catch-up contribution,” thereby deducting $6,500. (You also most likely understood my movie reference.) Qualification rules may be found here. Note that the contribution deadline is April 15, regardless of whether you file an extension. (Also note that contributions to Roth IRAs can be beneficial in the long run, but will not lower 2013 taxes. Those contributions are due April 15 as well.)
  2. Businesses, including self-employed individuals, can contribute even more with the use of a simplified employee pension (“SEP”). The maximum deduction is the lesser of (a) 25% (but only approximately 18-19% in the case of self-employed individuals) of net income and (b) $51,000. A catch-up contribution of $5,500 may be added by those who turned age 50 before 2014, and a contribution reported on Form 1040 may be made as late as April 15. In fact, for those who properly file an extension, the contribution may be made later, as long as it is made no later than the return is filed, and in no case later than October 15. Qualification rules may be found here.

These plans can be formed now to accept 2013 contributions. Most banks and well-known mutual fund families offer such accounts, and they are easy to establish. Contributions made in 2014 that properly relate to 2013 should be designated as 2013 contributions.

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