Millions of second-round Economic Impact (Stimulus) Payments are being made via direct deposits, paper checks, and prepaid debit cards. The IRS is supposed to distribute all payments by Friday, Jan. 15, 2021. Eligible taxpayers who didn’t receive their payment will need to claim it on their 2020 tax returns.
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If you’re working remotely during the pandemic, next year’s tax season could get complicated if you’re sheltering in place in a different state. That’s because some states tax income earned while there even if you primarily reside and work in a different state. For example, if you live in New Jersey but are working remotely […]
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The Internal Revenue Service has announced that anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the CARES Act RMD waiver for 2020. The 60-day rollover period for any RMDs already taken this year has […]
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Under IRC section 36B, eligible individuals who purchase health insurance through a Health Insurance Exchange may claim a Premium Tax Credit on form 8962. Among the various requirements, the tax credit is based on whether a taxpayer claims a personal exemption deduction under IRC section 151 for the taxpayer, the taxpayer’s spouse, and any dependents […]
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Most individuals are aware of the tax benefits of selling a principal residence. Section 121 of the IRS code allows for the exclusion of up to $500,000 (for those filing married filing jointly) of the profit from the sale if the property was used for at least two in five years as a principal residence. […]
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Traditional and Roth IRA distributions are due a 10% penalty if you take them ahead of time, but there are exceptions for early withdrawal that let you skip the fine. In retirement when you look for a tax-advantageous way to save on retirement, an IRA can fit the bill. Typical IRAs offer an upfront tax […]
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Did you know that the IRS considers any forgiven debt as a source of income and that taxes must be paid on that “revenue.” And if you’ve ever settled a debt for less or had debt forgiven completely, you’ve likely received a surprise in the mail coming tax season the Form 1099-C. A 1099-C reports […]
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If your child lives in your household but makes significant income, whereby you can not claim him or her as a dependent, you can still file as a Qualified Widow(er). A qualified widow or widower status is for people who have recently lost a spouse and are at home supporting a child. If your spouse […]
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An attempt by Congress to end the medical expense deduction caused an intense reaction because it would have affected people in nursing homes and those with costly chronic diseases. In the end, the deduction was retained and made slightly more generous by lawmakers. They lowered the threshold from 10 percent to 7.5 percent of income […]
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The tax overhaul also suspended many other deductions or imposed new limits on them while targeting major write-offs such as mortgage interest and state and local taxes. These changes usually expire in late 2025. On Schedule A, a grab bag of items, Congress eliminated deductions for miscellaneous expenses. The change removed deductions for unreimbursed travel, […]
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