As college costs continue to rise, you may be concerned about how to save and pay for it. Tax-favored strategies may be available. For example, you can contribute to a 529 plan set up to meet a child’s or grandchild’s education expenses. Contributions aren’t deductible but earnings accumulate tax-free. Contributions are taxable gifts to the child and are eligible for the $19,000 gift tax exclusion in 2025. By taking advantage […]
Read More...
The optional standard mileage rate used to calculate the tax-deductible cost of operating a business vehicle increased in 2025. The IRS announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck is 70 cents. In 2024, the rate was 67 cents per mile. The standard rate is useful if you don’t want to track actual vehicle-related expenses. But you still must record certain […]
Read More...
If your employer offers a 401(k) plan, contributing to it is a smart way to build a nice nest egg. Consider increasing the amount in 2025 if you’re not already contributing the maximum allowed. With a 401(k), an employee elects to have a certain amount of pay deferred and contributed to a plan by an employer on his or her behalf. The 2025 contribution limit is $23,500. Employees age 50 […]
Read More...
If you own a small business with no employees (other than your spouse) and want to set up a retirement plan, consider a solo 401(k) plan. This is also an option for self-employed individuals or business owners who wish to upgrade from a SIMPLE IRA or SEP plan. For 2024, you can make an elective deferral contribution of up to $23,000 of your net self-employment (SE) income ($30,500 if you’ll […]
Read More...
The Social Security Administration has announced that the wage base for computing Social Security tax will rise to $176,100 in 2025. This is up from $168,600 in 2024. (Believe it or not, it was just $3,000 from 1937–1950!) Wages and self-employment income above this amount aren’t subject to Social Security tax. The Federal Insurance Contributions Act imposes two taxes on employers, employees and self-employed workers. One is Social Security and […]
Read More...