The IRS has announced that the federal income tax filing season for tax year 2020 returns begins on Friday, February 12, 2021. Although tax seasons frequently begin in late January, the additional time will allow the IRS to update its programming and test its system to take into account any changes made by the Consolidated Appropriations Act, 2021 (CAA 2021), signed into law on December 27, 2020. Last-minute changes to tax law have already been included in IRS tax forms and instructions.Continue reading “Federal Tax Filing Season Starts Soon”
In the midst of these uncertain times, the government has made some changes to this year’s tax filing, payment, and IRA contribution deadlines, so we want to take this opportunity to outline these changes for you.Continue reading “IRS Filing, IRA Contribution, and Likely RMD Changes”
The IRS audited about 1 million tax returns in fiscal year 2018, and nearly 75% of those examinations were conducted entirely through correspondence.1 Taxpayers selected for an official audit are notified by mail.
Confusing matters, the IRS also mails other types of compliance notices, which may propose additional tax based on math errors, the automated detection of underreported income, or other factors. The National Taxpayer Advocate calls these notices “unreal” audits, because the IRS doesn’t count them as audits. But their impact is real — so the frequency and effectiveness of IRS compliance contacts are somewhat understated. About 8.5 million taxpayers experienced “unreal” audits during fiscal year 2016, and if they were included the audit rate would jump from 0.7% to more than 6.0%.2Continue reading “Five Red Flags That Raise the Odds of an Audit”
Many Americans consider Thanksgiving and Black Friday to be the unofficial start of the Holiday season. What many Americans don’t know however, is that the Tuesday after Thanksgiving is internationally known as “Giving Tuesday.” Started in 2012 by 92nd Street Y and the United Nations Foundation as a response to commercialization and consumerism in the post-Thanksgiving season, “Giving Tuesday” has quickly caught on in the philanthropic community. Last year, a total of $274 million dollars was raised on “Giving Tuesday,” with several large charities and companies such as the Bill and Melinda Gates Foundation and Facebook offering limited matching to participating donations.
Many investors are aware of the impact that inflation can have on our ability to purchase goods and services in the future. Assuming a modest rate of 2% inflation, a car that costs $30,000 today will sell for over $45,000 by 2040. To help mitigate these rising costs, the IRS periodically increases the limits on contributions to tax-advantaged retirement accounts which can be accessed penalty-free after age 59½ and in some cases even earlier than that. To account for inflating wages, the IRS also raises the levels of income at which various tax benefits are available, otherwise known as phase-outs. The first table outlines the new 2019 limits for some of the more popular retirement contributions along with a brief description of each. The second table shows the 2019 phase-out ranges for deducting Traditional IRA contributions and saving inside of a Roth IRA. The Traditional IRA phase-outs only apply if the individual participates in a retirement plan at work.
A recent decision by the Internal Revenue Service (IRS) has now allowed individuals who have been adversely affected by Hurricane Harvey to utilize the assets within their employer-sponsored plan(s) in order to address their financial needs. Continue reading “IRS Providing Relief for Those Affected by Hurricane Harvey”
For those of you who have April 15th marked on the calendar to file taxes and have not yet done so this year, take a deep breath: you have three extra days to get them done. Continue reading “Taxes Due on April 15th This Year? Not So Fast…”
It’s that time of the year – Filing Season…Check out the IRS’s top 12 tax scams for 2016 and make sure you take the proper precautions to protect yourself. Continue reading “The IRS’s Top Dozen Tax Scams for 2016”