april 15 - Linkenheimer LLP CPAs & Advisors

Get Credit for IRA Contributions Made by April 15 on 2020 Tax Returns

The Internal Revenue Service notes that taxpayers of all ages may be able to claim a deduction on their 2020 tax return for contributions to their Individual Retirement Arrangement made through April 15, 2021. There is no longer a maximum age for making IRA contributions.

An IRA is designed to enable employees and the self-employed to save for retirement. Most taxpayers who work are eligible to start a traditional or Roth IRA or add money to an existing account.

Contributions to a traditional IRA are usually tax deductible, and distributions are generally taxable. There is still time to make contributions that count for a 2020 tax return, if they are made by April 15, 2021. Taxpayers can file their return claiming a traditional IRA contribution before the contribution is actually made. The contribution must then be made by the April due date of the return. While contributions to a Roth IRA are not tax deductible, qualified distributions are tax-free. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the Saver’s Credit.

Generally, eligible taxpayers can contribute up to $6,000 to an IRA for 2020. For […]

By Linkenheimer LLP|2021-03-12T17:04:38+00:00March 12th, 2021|401k, ira, retirement|0 Comments

Estimated Tax Payments: The Deadline for the First 2021 Installment is Coming Up

April 15 is not only the deadline for filing your 2020 tax return, it’s also the deadline for the first quarterly estimated tax payment for 2021, if you’re required to make one.

You may have to make estimated tax payments if you receive interest, dividends, alimony, self-employment income, capital gains, prize money or other income. If you don’t pay enough tax during the year through withholding and estimated payments, you may be liable for a tax penalty on top of the tax that’s ultimately due.

Four due dates

Individuals must pay 25% of their “required annual payment” by April 15, June 15, September 15, and January 15 of the following year, to avoid an underpayment penalty. If one of those dates falls on a weekend or holiday, the payment is due on the next business day.

The required annual payment for most individuals is the lower of 90% of the tax shown on the current year’s return or 100% of the tax shown on the return for the previous year. However, if the adjusted gross income on your previous year’s return was more than $150,000 (more than $75,000 if you’re married filing separately), you must pay […]

By Linkenheimer LLP|2021-03-10T19:34:32+00:00March 10th, 2021|tax deadlines|0 Comments

The History of April 15th and Tax Day

April 15 isn’t most Americans’ favorite day, and that’s because most years, it’s the official, federal tax deadline (for the first time in 65 years, tax day now falls on a different day, July 15, 2020) . Tax Day, as it’s called, has a long and interesting history in the States that goes all the way back to Abe Lincoln’s leadership. Federal income tax was introduced with the Revenue Act of 1861 to help fund the Civil War, and subsequently repealed, re-adopted, and held unconstitutional. The early taxes were based on assessments, not voluntary tax returns. Tax payment dates varied by act.

1861: The First Federal Income Tax

Abraham Lincoln, who was an American president from 1861 to 1865, proclaimed the first federal income tax his first year in office. 1861—particularly August 5—is the historical day that marks the future-changing decision. At the time, Lincoln announced a 3% tax rate for anyone who made over $800 a year (roughly $24,000 with today’s inflation). The decision was made to help fund the Union’s efforts during the civil war. Though we are still being taxed today, Lincoln’s tax system was repealed in 1871.

1894: Tariff Act of 1894 Rules […]

By Linkenheimer LLP|2020-09-03T20:03:05+00:00April 15th, 2020|irs, Linkenheimer, New Tax Laws, tax deadlines|0 Comments

Three Questions You May Have After You File Your Return

Once your 2018 tax return has been successfully filed with the IRS, you may still have some questions. Here are brief answers to three questions that we’re frequently asked at this time of year.

Question #1: What tax records can I throw away now?

At a minimum, keep tax records related to your return for as long as the IRS can audit your return or assess additional taxes. In general, the statute of limitations is three years after you file your return. So you can generally get rid of most records related to tax returns for 2015 and earlier years. (If you filed an extension for your 2015 return, hold on to your records until at least three years from when you filed the extended return.)

However, the statute of limitations extends to six years for taxpayers who understate their gross income by more than 25%.

You’ll need to hang on to […]

By Linkenheimer LLP|2020-09-03T20:04:06+00:00April 18th, 2019|irs, New Tax Laws, tax planning, tax time|0 Comments

Don’t Forget: Tax Deadline is April 15th

If you’re a California resident who owes estimated CA tax payments, your next payment due date is rolling up fast. By April 15, the first installment of your 2019 state tax is due. Generally, you must make estimated payments if you expect to owe at least $500 for 2019, after you subtract withholding or credits you may have, or face penalties. To learn more about who is required to make estimated payments, how to pay, and how to obtain a handy worksheet to calculate the correct amount, click on https://bit.ly/2FJ03wl or contact your Linkenheimer CPA for help.

By Linkenheimer LLP|2020-09-03T20:04:07+00:00April 11th, 2019|tax deadlines, tax planning|0 Comments