Tax Rules

Sadly, the IRS is very clear about this; contributions must be cash.

Depending on your particular case and Social Security agent, you may get your surcharge waived, lowered, or upheld.

Fortunately, closing a specific account doesn’t reset your Roth clock.

Roth conversions can only be performed during the IRA owner’s lifetime.

Luckily, the form is organized by type of tax credit and the NAP credit section of Schedule CR is only five lines long.

Alas, the year you move the funds from traditional IRA to Roth IRA is the year that those assets are taxed.

Taxpayers of any income level, age, and employment or retirement status can convert their pre-tax individual retirement assets to Roth IRA.

The draft 2020 Form 1040 instructions clarify: the $300 limit is per form.

The SECURE Act of 2019 changed several things, so here is an updated review of this complex subject.

Hopefully this simple guide helps you get started in the right direction for correcting these surprise excess distributions.

Unfortunately, neither “yes” nor “no” is a correct answer to this question.

Individuals with more than $5M may be served well from gifting to utilize the higher estate exclusions before they sunset.

You can transfer up or across the family tree. However, if you want to transfer down a family tree, you can run into taxation problems.

Now non-nuclear family or friends who are more than 10 years younger than the decedent and in good health are never eligible for stretch provisions and must distribute the whole balance over 10 years.

Unfortunately, the answer is that you cannot. The 529 account owner receives any state tax deductions for contributions make to their account.

Form ADJ of the 760 lines 8a – 8c are where you report miscellaneous deductions.

Oddly enough, what qualifies something as a unique account is both a unique account registration and investment portfolio selection.

This latest notice now gives both seniors and heirs who have not yet been able to put their formerly RMD funds back into their IRAs the chance of redistributing those funds to the IRA that distributed them.

Once you know how to file it, it is a simple and easy process.

It took me one hour to complete from start to finish. Hopefully, now that I have bumbled my way through it on my own and documented the steps, it takes you less time.

Don’t let stress about tax filing requirements keep you or your child from a powerful opportunity to provide for their future.

Hopefully, this extension helps some take advantage of this welcome relief.

You always have until the tax filing deadline to make your IRA contributions regardless of when you file.

Unfortunately, as part of the Tax Cuts and Jobs Act back in December 2017, Congress eliminated the ability to undo Roth conversions, so there isn’t a way to undo a conversion.

In this way, those with inherited IRA distributions they would like to reverse or those with distributions no longer eligible for regular 60-day rollover contributions may be able to still complete either a Roth conversion or IRA redistribution with those assets.

Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020.

What can you do when you are in the middle of the Roth IRA contribution phaseout range?

Hopefully, this bit of tax history gives seniors and heirs a bit of comfort in taking advantage of this welcome relief.

I do not need to file Schedule H and imagine that most parent household employers also do not need to file this schedule.

Congress enabled those who are taking the standard deduction to deduct $300 of charitable giving if they do not itemize.

Among the temporary measures, Congress waived required minimum distribution (RMD) requirements for only tax year 2020.

My daughter was employed at her first job, earned her first income, and was able to fund her Roth IRA for the first time.

The given numbers on a 1099-R are insufficient to be able to fill out your tax return correctly. Knowledge of what was actually done is required in order to file your taxes accurately.

Who will be responsible to pay for the taxes related to the distribution? Where do you report the taxable portion on your tax return?

For domestic tasks like babysitting there are often two options: independent contractor or household employee. Taking the time to educate yourself on the difference may be worth your while.

This person has an IRA balance, but is about to empty it with a reverse Rollover. So the question is one of timing: can they do the IRA Rollover before the nondeductible contribution so that their cream and coffee never mix?

Luckily for the charitably-inclined individuals with nondeductible balances, QCDs are excluded from your Form 8606 taxable and nontaxable calculations.

The SECURE Act was merged into the 2020 budget bill which is now law.

Having a 401(k) plan with both pre- and post-tax balances is quite common, but mistakes are common as well.

Every school sets a budget or allowance for room and board, referred to as the cost of attendance. Are you allowed to reimburse yourself for the entire amount of Room and Board even if you did not spend that much?

The first step to answering this question is to check that the school you want to attend is an eligible educational institution.

The process of correcting cost basis problems, although time consuming, is worthwhile.

If a portion of your charitable gift is nondeductible, then no portion of the gift can be counted as a Qualified Charitable Distribution. But there is one accepted loophole for QCDs.

This June, the IRS came out with their final ruling on how charitable gifts to receive state tax credits will be handled. This is how the strategy works now.

Here is a simple list of the retirement account types and their differences.

“I will be turning 70 1/2 and wanted to start making contributions to charity from an IRA and taking the QCD at that time. Would this bill require me to wait two more tax years, until I am 72, to do this?”

On May 23, 2019, the House passed the Setting Every Community Up for Retirement Enhancement Act of 2019 with a vote of 417 Yeas and 3 Nays. It is on its way to the Senate.

I must say that homeschooling was by far my best education experience.

“If you claimed the standard deduction on your federal income tax return, you must also claim the standard deduction on your Virginia return.”

Be sure to remember to tell your tax preparer that you did a QCD.