Things to do before 12/31

There are only a few more weeks until the end of the year and, even though your plate is already overflowing, here are a few tax and financial items to take care of before the ball drops.

1. VHEIP Contributions

Don’t miss out on a valuable Vermont tax deduction! Each parent may contribute up to $2,500 per beneficiary per year for a 10% Vermont tax credit. This means a 2-parent/2-child family could receive a tax credit of $1,000! Don't have children but think you might in the future? Start an account today in your own name and transfer it to your child's name later. Worst case, you can use it to take courses yourself.

2. UPromise Accounts

Along the same lines as a VHEIP, a UPromise account can help you save for your child’s future tuition costs. It’s a great idea to have one when the holiday shopping season hits. Simply go to and create an account. Any online shopping should occur by first accessing your account with UPromise. You can link credit/debit cards for automatic savings, tell friends and family about the program so they can help, and download software to your computer so your shopping will be automatically linked through UPromise. There are also cash back offers for dining out, so treat yourself!

3. Flex Accounts and Health Savings Accounts

You've contributed hard earned money to your flex account so don't let it go to waste. Any dollars still in the account after 12/31 will be lost. It may be difficult to schedule an appointment with your doctor at this point, but think about refilling prescriptions or stocking up on contacts – items you know you’ll use.

The IRS allows HSA contributions up to $3,250 for single plans and $6,450 for family plans. Take advantage of a tax deduction by funding your account. Even if you're losing your high deductible health plan in 2014, you can still use the HSA to reimburse yourself for out-of-pocket expenses. Unused contributions can remain in the account to be used as a pseudo IRA and withdrawn penalty free at retirement age. Technically, contributions can be made until April 15, 2014 for 2013, so feel free to procrastinate on this one. Just be sure your bank codes the contribution to the correct year.

4. Check Credit Report

We recommend using the free website to check in on your credit periodically throughout the year. The site offers reports from 3 credit agencies so you can access one on April 1st, another on August 1st, and the third on December 1st. It is a good idea to pay the fee for obtaining your credit score ONE time during the year.

5. Charitable Contributions

Start cleaning those closets to make room for items received over the holidays! Clean out the pantry and donate to your local food shelf. Sponsor a child for Christmas. Just don't forget those receipts! Also see our previous post on getting the most from your charitable contributions.6. Review Investment Statements

For taxable accounts, check the amount of realized gains/losses. If there are substantial gains, think about selling some “loser” stocks to offset the tax. Always consult your investment advisor beforehand.

For retirement accounts, review beneficiary information to be sure it’s correct. So many times we see an ex-spouse listed as a beneficiary and, usually, it’s already too late.
7. Review Income/Expenses
Don’t get caught by surprise at tax time. If you are experiencing an unusually large profit in your business, think about buying needed equipment to reduce the tax consequences.

Review your household expenses. You don’t need to be fancy with QuickBooks or an Excel spreadsheet – simply look back over your bank statements and credit card statements to see where the money goes. Once you figure it out, set up a budget for 2014 and stick to it!

Health Insurance for Vermont

So many changes, so much confusion.

In July 2013, we attended a seminar put on by Blue Cross/Blue Shield of Vermont for small employers. Even so close to implementation deadlines, the answer to many of the questions remained “we don’t know yet”. As we near the first open enrollment period, we’ve compiled a list of resources to help you stay informed.


Example Employee Notices – Due October 1, 2013:

Small Businesses

Tax Credit Calculator:
Rates and Plans:
Am I a Small Business? and the Coverage Decision:


Subsidy Calculator:
BC/BS Plan Match/Finder:
MVP Plan Finder:

Getting The Most Out Of Your Charitable Contribution Deduction

Every year, clients ask “How can I lower my tax liability?” One of the best ways is by taking advantage of something you’re already doing: charitable contributions.

First, make sure your charitable contributions are actually deductible. This can be done by checking with your tax advisor or by finding Schedule A attached to your tax return. Then, consider these tips:

1. Gifts

Giving gifts to clients or staff? Don’t gift too much or you may have to issue the recipient a Form 1099-MISC at year-end, making the value of the gift taxable to that person. What about the hard-to-buy-for family member or friend? There are only so many Starbuck’s or spa gift cards you can get away with. And what if you don’t want them to know the value of the gift? Why not make a charitable contribution in their honor? I, once, adopted a zebra for a family member. My daughter had fun choosing the appropriate animal and a gift package was sent to the recipient. (And I got a tax deduction, but that’s beside the point…) There are many organizations that allow contributions to be made on behalf of a 3rd party and will send a card to that person acknowledging the gift. Be sure to research the organization thoroughly before contributing.

2.  Receipts

One highly cringe-worthy moment during tax season is when I hear the words “Planet Aid”. Not because they aren’t a great organization providing a great service to people in need. Simply because the yellow boxes don’t hand out receipts for donations made. The IRS now requires a receipt for all noncash contributions. Maybe it’s worth the drive to Salvation Army or Goodwill or another organization where someone will help you carry your bags and hand you a receipt to finalize the transaction. It is then up to you to determine the value of the items you’ve unloaded.

3. Disaster Relief

With all the National Disasters and economic disasters of late, we all know a family or individual who could use a little extra assistance. And we’re not normally thinking of a tax deduction as we rush to help. But, if we are… try contacting a local nonprofit, church, or school to setup a fundraiser. Donations are only tax deductible when made to a qualifying organization, not to an individual. It could take a little extra time to jump through the hoops of providing relief but the organization can help cast a wider net and land some additional donations.

4. Yard Sales

As we start to have our summer yard sales, consider giving a percentage (or all) to a charity. This is not only a great marketing strategy that gets more foot traffic, but buyers are more likely to spend if they know the money is going to a good cause. Get the kids involved too! A bake sale or lemonade stand can bring in extra cash that the kids can hand-deliver to a local charity. What better lesson to teach our kids? (Just be sure they get a receipt. In your name.)

5. Volunteer Vacation

Now it’s time for a vacation. How about a volunteer vacation? Build a school in Africa, restore coral reefs near Belize, preserve hiking trails in Colorado… The possibilities are endless! Cost and deductibility vary depending on the host organization so be sure to do your research and ask questions.

Some other considerations:

• Your own personal time/labor is not deductible. But keep track of any materials you may buy in the process.
• Mileage is deductible at 14 cents per mile. Track your miles to board meetings, special events, and fundraising.
• Most charitable contributions are limited to 50% of your adjusted gross income. Anything over this amount is carried forward to next year’s tax return.