Thinking about moving to another state in retirement? Don’t forget about taxes

| Tax Briefs

When you retire, you may consider moving to another state — say, for the weather or to be closer to your loved ones. Don’t forget to factor state and local taxes into the equation. Establishing residency for state tax purposes may be more complicated than it initially appears to be. Identify all applicable taxes It may seem like a no-brainer to simply move to a state with no personal income tax. But, to make a good decision, you must consider all taxes that can potentially apply to a state Read more [...]

The chances of IRS audit are down, but you should still be prepared

| Tax Briefs

The IRS just released its audit statistics for the 2018 fiscal year, and fewer taxpayers had their returns examined as compared with prior years. However, even though a small percentage of tax returns are being chosen for audit these days, that will be little consolation if yours is one of them.   Latest statistics   Overall, just 0.59% of individual tax returns were audited in 2018, as compared with 0.62% in 2017. This was the lowest percentage of audits conducted since 2002.   However, Read more [...]

Hire your children this summer: Everyone wins

| Tax Briefs

If you’re a business owner and you hire your children (or grandchildren) this summer, you can obtain tax breaks and other nontax benefits. The kids can gain on-the-job experience, save for college and learn how to manage money. And you may be able to: Shift your high-taxed income into tax-free or low-taxed income; Realize payroll tax savings (depending on the child’s age and how your business is organized); and Enable retirement plan contributions for the children. It must be a Read more [...]

Selling your home? Consider these tax implications

| Tax Briefs

Spring and summer are the optimum seasons for selling a home. And interest rates are currently attractive, so buyers may be out in full force in your area. Freddie Mac reports that the average 30-year fixed mortgage rate was 4.14% during the week of May 2, 2019, while the 15-year mortgage rate was 3.6%. This is down 0.41 and 0.43%, respectively, from a year earlier. But before you contact a realtor to sell your home, you should review the tax considerations. Sellers can exclude some gain If Read more [...]

How entrepreneurs must treat expenses on their tax returns

| Tax Briefs

Have you recently started a new business? Or are you contemplating starting one? Launching a new venture is a hectic, exciting time. And as you know, before you even open the doors, you generally have to spend a lot of money. You may have to train workers and pay for rent, utilities, marketing and more. Entrepreneurs are often unaware that many expenses incurred by start-ups can’t be deducted right away. You should be aware that the way you handle some of your initial expenses can make a large Read more [...]

Plug in tax savings for electric vehicles

| Tax Briefs

While the number of plug-in electric vehicles (EVs) is still small compared with other cars on the road, it’s growing — especially in certain parts of the country. If you’re interested in purchasing an electric or hybrid vehicle, you may be eligible for a federal income tax credit of up to $7,500. (Depending on where you live, there may also be state tax breaks and other incentives.)   However, the federal tax credit is subject to a complex phaseout rule that may reduce or eliminate the Read more [...]

Three questions you may have after your return is filed

| Tax Briefs

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 now throw away?   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 Read more [...]

Make a deductible IRA contribution for 2018. It’s not too late!

| Tax Briefs

Do you want to save more for retirement on a tax-favored basis? If so, and if you qualify, you can make a deductible traditional IRA contribution for the 2018 tax year between now and the tax filing deadline and claim the write-off on your 2018 return. Or you can contribute to a Roth IRA and avoid paying taxes on future withdrawals. You can potentially make a contribution of up to $5,500 (or $6,500 if you were age 50 or older as of December 31, 2018). If you’re married, your spouse can potentially Read more [...]

Still working after age 70½? You may not have to begin 401(k) withdrawals

| Tax Briefs

If you participate in a qualified retirement plan, such as a 401(k), you must generally begin taking required withdrawals from the plan no later than April 1 of the year after which you turn age 70½. However, there’s an exception that applies to certain plan participants who are still working for the entire year in which they turn 70½. The basics of RMDs Required minimum distributions (RMDs) are the amounts you’re legally required to withdraw from your qualified retirement plans and traditional Read more [...]