form 1040 - Linkenheimer LLP CPAs & Advisors

Still Time to Contribute to an IRA for 2016

Available in one form or another since the mid-1970s, individual retirement arrangements (IRAs) are designed to enable employees and the self-employed to save for retirement. Contributions to traditional IRAs are often deductible, but distributions, usually after age 59½, are generally taxable. Though contributions to Roth IRAs are not deductible, qualified distributions, usually after age 59½, are tax-free. Those with traditional IRAs must begin receiving distributions by April 1 of the year following the year they turn 70½, but there is no similar requirement for Roth IRAs.

Most taxpayers with qualifying income are either eligible to set up a traditional or Roth IRA or add money to an existing account. To count for a 2016 tax return, contributions must be made by April 18, 2017. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the saver’s credit when they complete their 2016 tax returns.

Generally, eligible taxpayers can contribute up to $5,500 to an IRA. For someone who was at least age 50 at the end of 2016, the limit is increased to $6,500. There’s no age limit for those contributing to a Roth IRA, but anyone who was at […]

Reminder of Reporting Requirement for Taxpayers with Foreign Connections

The IRS is reminding all U.S. citizens and resident aliens with an interest in or signature or other authority over foreign financial accounts, whose total value exceeded $10,000 at any time during 2014, they must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114 [Report of Foreign Bank and Financial Accounts (FBAR)] by 6/30/15. The IRS encourages taxpayers with foreign assets to determine if they have a FBAR filing requirement. Separately, certain taxpayers living abroad (U.S. citizens and resident aliens, including those with dual citizenship who lived or worked abroad during all or part of 2014) may have to file a Form 1040 for 2014, including the Foreign Account Tax Compliance Act (FATCA) related Form 8938. The Form 1040 deadline for these taxpayers is automatically extended two months, to 6/15/15, by attaching a statement to their return explaining that they were living overseas or serving in the military outside the U.S. on the regular due date of their tax return. If you have any questions, please contact your Linkenheimer LLP CPA.