Get a Jump on College Tuition

Parents and grandparents saving for college have an opportunity to put money aside in a tax-advantaged plan.

Section 529 plans are available in all states and the District of Columbia and allow you to either prepay or contribute to an account for paying a student's qualified education expenses. Among the advantages:

• Qualified withdrawals are free from federal tax and the earnings are allowed to grow tax free.
• You can change from one type of investment to another within the plan.
• Family members, such as grandparents, can contribute and benefit by reducing their taxable estates.
• The student or the student's parents still may be eligible to claim federal tax credits — the American Opportunity (formerly the Hope Scholarship) or the Lifetime Learning credits.
• The designated beneficiary of an account can be changed to another member of the family.

There is no federal tax deduction for contributions to these plans (although some states do allow deductions).

Contact us to help determine if a Section 529 plan is right for your family.

We can help come up with a solid plan to save money for the education of your

children or grandchildren. Save money for the education of your

children or grandchildren.

Get Out and Give Back Dayton!

Flagel, Huber, Flagel & Co. associates team with up

Generation Dayton to participate in the annual

Get Out and Give Back Dayton!

At Flagel, Huber, Flagel & Co., we are committed to community involvement. On May 4, 2012 several of our associates delivered on this commitment, giving their time and energy to help four local organizations and the people they serve:

Brett Vandeman had the privilege of working with Habitat for Humanity. Although not a carpenter by trade, Brett found himself slowly becoming an expert at installing flooring.  He worked with a group of 10 for the entire afternoon and is proud to have helped a family of seven from Sudan make their American dream of homeownership come true.

Mindy Knippen spent her afternoon assisting the Community Blood Center. Her help in sorting and boxing t-shirts to be handed out at the CBC’s mobile donation units was much appreciated.

Tiffany Boone greatly enjoyed her day with The Humane Society.  Their largest fundraising event of the year is right around the corner and she was able to help stuff and organize bags for approximately 1200 walkers.  Her work was also greatly appreciated and will be put to good use.

Katie Pavy, Brandon Gross and Stephanie Turvene helped clean the historic neighborhood of Oregon District.  The park is owned by the city of Dayton, but residents volunteer to maintain the upkeep.  They worked hard digging up and relocating plants, raking, and disposing of unwanted grass in various locations.  During their time on the jobsite, they interacted with local residents and heard great stories about the Oregon District’s rich history. 

They each came back with stories of their wonderful experiences, and we are proud of their hard work and enthusiasm.   We are committed to the highest standards of accounting and business excellence, as well as excellence within our communities.

Left to Right: 

Brett Vandeman, Tiffany Boone, Stephanie Turvene,

Mindy Knippen, Katie Pavy and Brandon Gross.

Starting a New Business or Organization?

When starting a new venture, there are a variety of entity choices — although some will be easily ruled out based on your operation. Most entities are governed by state statutes, with federal income tax rules and regulations also coming into play. The six basic entities are:

1. A sole proprietorship is owned by one person, who may also be the only worker. Note that a sole proprietorship is not a separate legal entity. The owner receives all profits, bears all losses, and is personally liable for legal claims that arise from accidents, faulty merchandise, employees, unpaid bills and other business problems.

2. A general partnership involves two or more owners who make decisions for the business together. Partners share profits, losses, and liability. Although a partnership can be very informal, it is generally considered a legal entity under applicable state law.

3. A C corporation is a legal entity owned by its stockholders united under a common name. Corporations issue stock and elect a board of directors to manage the company. Shareholders have limited liability for the obligations of the business. Corporate income is taxed twice. The corporation distributes its earnings as dividends to stockholders, who must include the dividends as personal income on their tax returns.

4. An S corporation limits the number of stockholders to 100. Many small companies choose this option, because it's a good way to avoid the double taxation of corporations and also provides limited personal liability for the owners. However, there are some restrictions placed on S corps. For example, there can be only one class of stock and the corporation must be domestic.

5. A not-for-profit organization is set up with a specific mission to improve society, such as a museum, charitable foundation, religious organization, research group or trade association. It is not an option for a regular for-profit business. Not-for-profit organizations generally do not pay taxes on their income, cannot sell stock or pay dividends, and have strict requirements imposed on their activities.

6. A limited liability company gives owners protection from the claims of business creditors and others. Individual LLC members' liability for business debts is limited to the value of their interest in the business — hence the name "limited liability."

In addition, there are sub-entities within some of the above six categories. Contact us to discuss the options. We can help decide which one is right for your operation.

Planning on Setting Up a Home Office?

If you're self-employed as a sole proprietor, partner, or LLC member, you may be able to deduct the costs of maintaining an office at home.

Generally, in order to claim a business deduction for an office inside your home, you must use the space exclusively as your principal place of business, or as a place to meet with patients, clients or customers.

In fact, current tax law gives you several ways to qualify for a home office write-off. Assuming you're eligible, here's the payoff:

o You can deduct 100 percent of any expenses that are directly related to your home office, such as an additional phone line.

o You can deduct a percentage of indirect expenses that relate to your entire residence, such as mortgage nterest and property taxes.

There are special rules for qualified daycare providers and taxpayers storing business inventory or product samples.

The great thing about home office deductions is they go on Schedule C (if you are a sole proprietor or single-member LLC owner) or Schedule E (if you are a partner or member of a multi-member LLC). Write-offs that appear on these business schedules are double tax savers, because they reduce both your income and self-employment tax bills.

Of course, there are some restrictions on home offices. And if you are an employee, different rules apply. Contact our firm for the details, including the recordkeeping requirements.



Turning Age 70 1/2?

Under the so-called required minimum distribution rules, you must begin taking annual payouts from your traditional IRA by no later than April 1st of the year after you turn 70 1/2. (If you have a Roth IRA, it is exempt from these rules.)

• It doesn't matter if you would prefer to leave your traditional IRA untouched. You must begin taking required minimum distributions by no later than the April 1st deadline.

• If you don't, the IRS can assess a penalty equal to 50 percent of the difference between what you should have withdrawn from the account under the required minimum distribution rules and what you actually took out (if anything). That's a very harsh penalty, so this isn't something you want to ignore.

• Your required minimum distributions are taxable.

As you might suspect, the whole idea here is to force people who would otherwise leave their traditional IRAs untouched to begin emptying their accounts and paying the resulting income taxes.

Contact us to find out how the required minimum distribution rules affect you.

We don't want you to get hit with the 50 percent penalty!

We can also identify some appropriate income tax and estate planning strategies

to consider at this stage of your life.