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401k Mistakes

Participating in a 401(k) or similar retirement plan is a tax-advantaged way to save for retirement. If you have the option of participating in a 401(k) plan, avoid these five common mistakes.

* Failing to participate fully. Too many employees opt out of the plan or don't contribute as much as they can afford. At a minimum, try to set aside enough to receive the full employer-matching contribution. For example, your employer might offer to match 30% of the first 3% of payroll. That match is equivalent to a 30% first-year return on the amount you contribute.

* Over-investing in company stock. Don't invest too much of your plan contributions in company stock. Remember, even if the company is doing well now, things can change. And if the worst happens and you lose your job, you don't want to lose your retirement savings too. (Think of Enron employees.) If your employer uses company stock for the matching contribution, you may have no choice. But at least you can select other investments for your own contributions.

* Failing to diversify. Choose a well-diversified mix of investments in the plan. Then continually monitor and rebalance your investments as they grow. Coordinate your investment choices with your non-401(k) savings to make sure you have an appropriate mix. Seek professional advice if you need it.

* Borrowing from your plan. Take a loan from the plan only as a last resort. Remember, these savings are for your retirement, not to fund everyday needs. When you borrow from the plan, you're losing the tax-deferred growth on those funds.

* Withdrawing your savings if you change jobs. It's tempting to cash out your savings if you change jobs. But if you do, you'll owe taxes and probably a penalty. More important, you'll lose the future tax-favored growth that you might need in retirement. Instead, arrange a direct rollover into an IRA or your new employer's plan.



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Delaware Top WorkplaceWe sincerely thank our employees for again voting us the highest ranking CPA firm on the list, and 3rd overall in the small business catagory.  

You can see the full article here

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We are hiring! 

Gunnip CPAs is seeking several professionals to join our tax and audit teams to assist a diverse group of individual and business clients.  We provide assurance, tax and business consulting services to clients throughout the Mid-Atlantic region.   Our team of professionals works with clients in industries such as manufacturing, wholesale, professional services, commercial development, contractors, nonprofit organizations and state and local government.  We look for people who are seeking a career in public accounting.

Since 2008, our employees have consistently ranked us in the Top 10 small workplaces in Delaware. Since 2011, we have been the highest ranking CPA firm on the list. Our staff specifically names our exceptional benefits package, high appreciation level and low-stress, flexible environment as the main reasons they stay.

To learn more about our current opportunities see our TAX MANAGER and STAFF ACCOUNTANT positions. 


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The IRS recently announced the inflation-adjusted contribution limits for health savings accounts (HSAs) for 2015. HSAs allow taxpayers with high-deductible health insurance plans to set aside pretax dollars that can be withdrawn tax-free to pay unreimbursed medical expenses. The 2015 contribution limit for individuals is $3,350; the limit for family coverage is $6,650. A catch-up contribution of an additional $1,000 is permitted for individuals who are 55 or older.

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Gunnip & Company CPAs is proud to recognize our dedicated staff and announce the following accomplishments and promotions. 

Lindsay J Jennings CPA and Anne R Lane CPA have each been promoted to Manager.

Lindsay Jennings CPA  Anne Lane CPA

Lindsay started her career as an intern at Gunnip.  Her primary focus is the audit and review of construction and real estate entities, law practices, employee benefit plans and nonprofit organizations.  She is a graduate of the University of Delaware.

Anne has worked in various accounting positions including working in The Netherlands before coming home to Delaware.  Her primary focus is tax, specializing in tax planning strategies and compliance for individuals and businesses.  She is a graduate of Colorado State University and earned a Masters in Taxation from Villanova University School of Law.

John M. Leary CPA and Ryan J. Bond have each been promoted to Supervisor.

John started his career with Gunnip in 2008 as a graduate of West Chester University.  John is involved on audits, reviews, and compilation engagements in industries including governments, not-for-profits, private schools and privately-held companies. 

Ryan graduated from the University of Arizona in 2007. He worked in firms in Tucson before moving to Delaware.  Ryan provides tax planning, research and analysis for individuals, and business owners to help grow and maintain their businesses.


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The premium tax credit is a refundable tax credit that helps eligible people with moderate incomes afford health insurance purchased through the Health Insurance Marketplace.

You can choose to have all or part of the credit paid in advance to your insurance company to lower what you pay for your monthly premiums, or you can claim the credit when you file your tax return. If you choose to have the credit paid in advance, you must reconcile the advance payments with the actual credit you compute when you file your tax return.

Advance credit payments made to your insurance company are based on an estimate of the credit that you will claim on your federal income tax return. The Marketplace estimates the credit by using information about your family composition and projected income that you provide when you submit your application.

Report Changes in Circumstances

It is important for you to report changes in circumstances to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payment. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.

Changes you should report to the Marketplace include:
* Birth or adoption
* Marriage or divorce
* Moving to a different state
* Changes in household income
 Incarceration or release from incarceration
 Gaining or losing health care coverage or eligibility
 Other changes affecting income and household size

These changes may also open the door for the Marketplace special enrollment period that permits health care plan changes. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.

File a Federal tax Return

If you receive advance credit payments in any amount or if you plan to claim the premium tax credit, you must file a federal income tax return. If you receive any advance credit payments, you will use your return to reconcile the difference between the payments and of the credit.

To find out more about the premium tax credit and other tax-related provisions of the health care law, please call Gunnip CPAs at (302) 225-5000 or email us at info@gunnip.com. We will be happy to help.



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Valerie C. Middlebrooks, CPA has been elected President of Jewish Family Services of Delaware.  Previously serving as the organization’s Vice President of Finance, Valerie will serve a two-year term. Jewish Family Services of Delaware (JFS) is a health and human service agency serving families within the Delaware community regardless of religious preference.  Their primary services include outpatient behavioral health counseling and the Brandywine Village Network for adults 50+.

Valerie is a Partner at Gunnip & Company CPAs.  She is involved in all areas of taxation including strategic planning, research, analysis and preparation for the firm’s clients, including individuals, small and large privately held companies, public corporations and not for profit organizations.  She is active in the community.  In addition to her role at JFS, she serves as Treasurer for the Delaware Society of Certified Public Accountants and Treasurer of the Fund for Women. 

To learn more about Val, click here.


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Worthless Stock

In the last few years, you may have purchased stock in a company that's now out of business, or in another one whose share price is now just pennies. Does this mean you can take a tax loss for a worthless security? Here's a quick look at the rules.

First, the stock must be completely worthless before you can claim a loss. For example, if it's a publicly traded company and the share price is as low as a penny, it still doesn't qualify as worthless. (If this is the case, you may be better off selling it to your broker for a penny and taking a regular capital loss.)

If it is worthless, you must be able to identify an event that caused it to become worthless and a date for that event. For example, even if a company declares bankruptcy, the stock may not be worthless if there's a chance it will reorganize and emerge from bankruptcy. But if it becomes clear at a bankruptcy hearing that the creditors will own the reorganized company, you can consider your stock worthless at that time.

You must claim a worthless security's loss in the tax year it became worthless. Because this is sometimes not obvious until later, the IRS allows you to go back seven years to file an amended return claiming the loss.

Because these are general rules and because it is often a judgment call to decide that a stock is worthless, we encourage you to contact our office with any questions you have.  (302) 225-5000 or info@gunnip.com.


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Are you a grandparent who wants to help pay for a grandchild's college education? You'll find several ways to do this, each with its own limitations and tax consequences.

GIFTS. The simplest way is to make an outright cash gift to your grandchild each year. In 2014, you can give up to $14,000 without any gift tax liability. If your spouse joins in the gift, you can jointly give each grandchild up to $28,000 each year.

DIRECT PAYMENTS. You can give unlimited amounts without gift tax consequences if you make the payments directly to a qualified education institution on behalf of your grandchild. Payments can only be for tuition, not for dorm fees, meals, books, etc.

EDUCATION ACCOUNTS. You could set up a Coverdell education savings account or a Section 529 plan for your grandchild. These plans offer tax-free growth of amounts you contribute to them. Age, income, and contribution limits apply, however.

To discuss the options best suited to your circumstances, contact our office at info@gunnip.com or 302.225.5000.


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Individual taxpayers seeking new jobs may incur a variety of expenses, including costs directly associated with moving to a new job location or those specifically related to the job search. Many of these expenses are deductible, but the rules are strict, and expenses must be carefully documented and substantiated. You may be able to take advantage of these deductions, if you plan carefully.

Any moving expenses you may incur, including expenses of traveling to the new location and transporting household goods and personal effects, are deductible so long as you meet certain requirements relating to when you begin work at the new position and how far the new job is from the old job and your old residence. These expenses are deductible even if you are seeking employment for the first time or in a completely new field. Also, qualified moving expenses reimbursed or paid by your employer are considered nontaxable fringe benefits.

You also may be able to deduct the expenses you incur in searching for a new job, including the costs of a headhunter or employment service, and the expense of preparing your resume. These expenses are deductible so long as the job being sought is in the same line of work as the old job, even if you are unemployed at the time of the job search. Further, the job search does not have to be successful in order to qualify for the deduction. However, job hunting expenses for a first job, or related to changing to a new career, are not deductible.

Although these are just a few examples, there are many more tax issues that you should consider. We would like to meet with you to discuss your overall tax planning strategies and how you can benefit from these deductions. Please contact our office at your earliest convenience to make an appointment.



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