taxpayer

IRS Reminds Retirees of April 1 Deadline to Take Required Retirement Plan Distributions

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The Internal Revenue Service today reminded taxpayers who turned age 70½ during 2017 that, in most cases, they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Sunday, April 1, 2018.

The April 1 deadline applies to all employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans. The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs, however, they do not apply to ROTH IRAs.

The April 1 RMD deadline only applies to the required distribution for the first year. For all subsequent years, including the year in which recipients were paid the first RMD by April 1, the RMD must be made by Dec. 31. A taxpayer who turned 70½ in 2017 and receives the first required distribution (for 2017) on April 1, 2018, for example, must still receive the second RMD by Dec. 31, 2018.

Affected taxpayers who turned 70½ during 2017 must figure the RMD for the first year using the life expectancy as of their birthday in 2017 and their account balance on Dec. […]

By |March 15th, 2018|irs, retirement|0 Comments

AMT Retained with Higher Exemption Amounts

The alternative minimum tax (AMT) is a tax system separate from the regular tax that is intended to prevent a taxpayer with substantial income from avoiding tax liability by using various exclusions, deductions, and credits.

Under it, AMT rates are applied to AMT income determined after the taxpayer “gives back” an assortment of tax benefits. If the tax determined under these calculations exceeds the regular tax, the larger amount is owed. In computing the AMT, only alternative minimum taxable income (AMTI) above an AMT exemption amount is taken into account. The AMT exemption amount is set by statute and adjusted annually for inflation, and the exemption amounts are phased out at higher income levels.

Under pre-Act law, for 2018, the exemption amounts were scheduled to be:

(i) $86,200 for marrieds filing jointly/surviving spouses;

(ii) $55,400 for other unmarried individuals;

(iii) 50% of the marrieds-filing-jointly amount for marrieds filing separately, i.e., $43,100;

And, those exemption amounts were reduced by an amount equal to 25% of the amount by which the individual’s AMTI exceeded:

(i) $164,100 for marrieds filing jointly and surviving spouses (phase-out complete at $508,900);

(ii) $123,100 for unmarried individuals (phase-out complete at $344,700); and

(iii) 50% of the marrieds-filing-jointly amount for marrieds filing separately, i.e., $82,050 (phase-out complete at […]

By |January 12th, 2018|amt, New Tax Laws, tax deductions|0 Comments

Tips for Tax Payers Traveling for Charity

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During the summer, some taxpayers may travel because of their involvement with a qualified charity. These traveling taxpayers may be able to lower their taxes.

Here are some tax tips for taxpayers to use when deducting charity-related travel expenses:

  • Qualified Charities.  For a taxpayer to deduct costs, they must volunteer for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are generally qualified, and do not need to apply to the IRS. A taxpayer should ask the group about its status before they donate. Taxpayers can also use the Select Check tool on IRS.gov to check a group’s status.
  • Out-of-Pocket Expenses.  A taxpayer may be able to deduct some of their costs including travel. These out-of-pocket expenses must be necessary while the taxpayer is away from home. All costs must be:
    • Unreimbursed,
    • Directly connected with the services,
    • Expenses the taxpayer had only because of the services the taxpayer gave, and
    • Not personal, living or family expenses.
  • Genuine and Substantial Duty.  The charity work the taxpayer is involved with has to be real and substantial throughout the trip. The taxpayer can’t deduct expenses if they only have nominal duties or do not […]
By |July 28th, 2017|charity, deduction, tax|0 Comments

IRS Suspends Identity Protection PIN Online Program

The IRS has announced that it has temporarily suspended its online Identify Protection Personal Identification Number (IP PIN) program to look at further strengthening security features of the tool. The IP PIN online program allowed taxpayers, who had received such numbers and then lost or misplaced them, and certain other taxpayers, to retrieve IP PINs online. An IP PIN is a six-digit number assigned to taxpayers to help prevent the misuse of their Social Security Numbers (SSNs) on fraudulent income tax returns. Following the suspension of this system, taxpayers, who are IP PIN holders but who lost their CP01A letters containing an IP PIN, will need to call the IRS. The IRS Statement on IP PIN is available at https://www.irs.gov/uac/Newsroom/IRS-Statement-on-IP-PIN

If you have any questions, please contact your Linkenheimer CPA.

By |March 11th, 2016|irs|0 Comments

California Tax Relief Available for Taxpayers Affected by Wildfires

The California State Board of Equalization (SBE) has announced that taxpayers impacted by the Butte Fire in Amador and Calaveras counties and the Valley Fire in Lake and Napa counties may request an extension to file their returns, relief from penalties and/or interest on some taxes and fees, or to replace copies of records lost to damage. (California SBE News Release No. 76-15-G, 09/17/2015.)

Requesting relief and taxes and fees for which relief is available. Taxpayers and fee payers can go online to request relief from penalty and/or interest, and an extension of time to file a tax/fee return. Any taxpayer or feepayer can use the online system to make their request; those without Internet access may call the SBE Customer Service Center at 1 (800) 400-7115.

Relief from penalty and interest is available for the following taxes and fees: sales and use taxes; fire prevention fee; alcoholic beverage tax; cigarettes and tobacco products excise taxes; energy resources surcharge; emergency telephone users surcharge; natural gas surcharge; timber yield tax; fuel taxes (diesel fuel tax, interstate user tax, use fuel tax, motor vehicle fuel tax, aircraft jet fuel tax); underground storage tank maintenance fee; oil spill prevention […]

By |September 22nd, 2015|tax|0 Comments

IRS Sending out ID Verification Letters

IRS Is Sending out Identity Verification Letters to Possible Identity Theft Victims:  In its efforts to combat identity theft, the IRS is stopping suspicious tax returns that have indications of being identity theft, but contain a real taxpayer’s name and/or social security number and sending out (by US Postal Service) Letter 5071C to request that the taxpayer verify his or her identity. (The IRS will not email or telephone the taxpayer directly to request this information so please be cautious of anyone calling or emailing claiming to be from the IRS.) Taxpayers may use the idverify.irs.gov site or call a toll-free number on the letter to confirm their identity, but the IRS is encouraging the use of idverify.irs.gov as the safest, fastest option. Once their identity is verified, the taxpayers can confirm whether or not they filed the return in question. If so, it will take approximately six weeks to process it and issue a refund. If not, the IRS can take steps at that time to assist them. If you have any questions, please contact your Linkenheimer CPA.

By |March 24th, 2015|irs|0 Comments