4 new law changes that may affect your retirement plan

| Tax Briefs

If you save for retirement with an IRA or other plan, you’ll be interested to know that Congress recently passed a law that makes significant modifications to these accounts. The SECURE Act, which was signed into law on December 20, 2019, made these four changes. Change #1: The maximum age for making traditional IRA contributions is repealed. Before 2020, traditional IRA contributions weren’t allowed once you reached age 70½. Starting in 2020, an individual of any age can make contributions Read more [...]

New law provides a variety of tax breaks to businesses and employers

| Tax Briefs

While you were celebrating the holidays, you may not have noticed that Congress passed a law with a grab bag of provisions that provide tax relief to businesses and employers. The “Further Consolidated Appropriations Act, 2020” was signed into law on December 20, 2019. It makes many changes to the tax code, including an extension (generally through 2020) of more than 30 provisions that were set to expire or already expired. Two other laws were passed as part of the law (The Taxpayer Certainty Read more [...]

Congress gives a holiday gift in the form of favorable tax provisions

| Tax Briefs

As part of a year-end budget bill, Congress just passed a package of tax provisions that will provide savings for some taxpayers. The White House has announced that President Trump will sign the Further Consolidated Appropriations Act of 2020 into law. It also includes a retirement-related law titled the Setting Every Community Up for Retirement Enhancement (SECURE) Act. Here’s a rundown of some provisions in the two laws: The age limit for making IRA contributions and taking withdrawals Read more [...]

Do you have a side gig? Make sure you understand your tax obligations

| Tax Briefs

The number of people engaged in the “gig” or sharing economy has grown in recent years, according to a 2019 IRS report. And there are tax consequences for the people who perform these jobs, such as providing car rides, renting spare bedrooms, delivering food, walking dogs or providing other services. Basically, if you receive income from one of the online platforms offering goods and services, it’s generally taxable. That’s true even if the income comes from a side job and even if you Read more [...]

Adopting a child? Bring home tax savings with your bundle of joy

| Tax Briefs

If you’re adopting a child, or you adopted one this year, there may be significant tax benefits available to offset the expenses. For 2019, adoptive parents may be able to claim a nonrefundable credit against their federal tax for up to $14,080 of “qualified adoption expenses” for each adopted child. (This amount is increasing to $14,300 for 2020.) That’s a dollar-for-dollar reduction of tax — the equivalent, for someone in the 24% marginal tax bracket, of a deduction of over $50,000. Adoptive Read more [...]

Holiday parties and gifts can help show your appreciation and provide tax breaks

| Tax Briefs

With Thanksgiving behind us, the holiday season is in full swing. At this time of year, your business may want to show its gratitude to employees and customers by giving them gifts or hosting holiday parties. It’s a good idea to understand the tax rules associated with these expenses. Are they tax deductible by your business and is the value taxable to the recipients? Customer and client gifts If you make gifts to customers and clients, the gifts are deductible up to $25 per recipient per Read more [...]

Using your 401(k) plan to save this year and next

| Tax Briefs

You can reduce taxes and save for retirement by contributing to a tax-advantaged retirement plan. If your employer offers a 401(k) or Roth 401(k) plan, contributing to it is a taxwise way to build a nest egg. If you’re not already contributing the maximum allowed, consider increasing your contribution rate between now and year-end. Because of tax-deferred compounding (tax-free in the case of Roth accounts), boosting contributions sooner rather than later can have a significant impact on the Read more [...]

Take advantage of the gift tax exclusion rules

| Tax Briefs

As we head toward the gift-giving season, you may be considering giving gifts of cash or securities to your loved ones. Taxpayers can transfer substantial amounts free of gift taxes to their children and others each year through the use of the annual federal gift tax exclusion. The amount is adjusted for inflation annually. For 2019, the exclusion is $15,000.   The exclusion covers gifts that you make to each person each year. Therefore, if you have three children, you can transfer a total of Read more [...]

IRA charitable donations are an alternative to taxable required distributions

| Tax Briefs

Are you charitably minded and have a significant amount of money in an IRA? If you’re age 70½ or older, and don’t need the money from required minimum distributions, you may benefit by giving these amounts to charity. IRA distribution basics A popular way to transfer IRA assets to charity is through a tax provision that allows IRA owners who are 70½ or older to give up to $100,000 per year of their IRA distributions to charity. These distributions are called qualified charitable distributions, Read more [...]

When is tax due on Series EE savings bonds?

| Tax Briefs

You may have Series EE savings bonds that were bought many years ago. Perhaps you store them in a file cabinet or safe deposit box and rarely think about them. You may wonder how the interest you earn on EE bonds is taxed. And if they reach final maturity, you may need to take action to ensure there’s no loss of interest or unanticipated tax consequences.   Interest deferral   Series EE Bonds dated May 2005 and after earn a fixed rate of interest. Bonds purchased between May 1997 and April Read more [...]