KEVIN A. MELE, P.C. Certified Public Accountant
TAX SMARTS TAX SMARTS Age MAtters In the tAx LAw
Smith Mountain Lake Area For Over 30 Years”
Many tax provisions are linked to age, so whenever there’s a birthday in the family, check for changes your tax planning should take into account. Some of the major tax milestones include the following: AGE .. WHAT IT MEANS FOR YOUR TAXES.
13 ... Beginning at this age, your child no longer qualifies for
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the child care credit.
17 ... From this age on, your son or daughter no longer qualifies for the child tax credit (different from the child care credit, above).
18 ... When your child reaches this age, his or her Coverdell education savings account is not permitted to accept new contributions. 18 ... Beginning at this age, you must pay social security taxes for any of your children that you employ in an unincorporated business. 19 ... Is your child a full-time student? Unless you answer “yes,” you could lose the dependency deduction once your child reaches this age.
24 ... Upon reaching this age, none of your child’s investment income will be taxed at your rate under the “kiddie tax” rules.
30 ... By this age any amount remaining in your child’s Coverdell education savings account must be distributed or rolled over to an education savings account for another qualifying family member.
59½ .. You may start withdrawing money from your IRA, 401(k), and other retirement plans without penalty.
65 ... Beginning at this age, you generally qualify for a higher standard deduction. 65 ... Also at this age, low-income seniors may qualify for a special tax credit. 70½ .. You must start withdrawing at least the minimum amount from your IRA each year, or you face a stiff penalty. (This requirement doesn’t apply to Roth IRAs.
Kevin A. Mele, CPA is a Certified QuickBooks Pro Advisor who specializes in custom QuickBooks design, installation, and training for your business.
Please give me a call if you would like to discuss the above issue or for any other assistance concerning your individual and business accounting and tax needs; please feel free to contact me at (540) 297-4204. SMITHMOUNTAINLAKE.COM
Published on Jan 9, 2012
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