27 Jun 2020
0

There’s Still Time to Make a 2019 IRA Contribution

Roger Rossmeisl, CPA
Individual Tax Briefs
Theres Still Time to Make a 2019 IRA Contribution

Do you want to save more for retirement on a tax-favored basis? If so, and if you qualify, you can make a  2019 IRA contribution for the 2019 tax year between now and the extended tax filing deadline and claim the write-off on your 2019 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 $6,000 (or $7,000 if you were age 50 or older as of December 31, 2019). If you’re married, your spouse can potentially do the same, thereby doubling your tax benefits. The deadline for 2019 traditional and Roth contributions for most taxpayers would have been April 15, 2020. However, because of the novel coronavirus (COVID-19) pandemic, the IRS...

27 Jun 2020
0

IRS Payment Options for Those Owing Taxes

Roger Rossmeisl, CPA
Individual Tax Briefs
IRS Payment Options for Those Owing Taxes

In a News Release (IR 2020-48), the IRS has provided a list of payment options available to taxpayers who need to make a tax payment or who owe taxes they can’t pay.  Taxpayers who owe taxes Taxpayers who owe taxes can choose among the following payment options: Electronic funds withdrawal (EFW) Taxpayers who electronically file their tax returns using tax preparation software or a tax professional can pay any taxes they owe from their bank account using EFW. EFW is free and available when electronically filing a tax return with an amount due. IRS Direct Pay IRS Direct Pay allows taxpayers to pay their federal taxes, separately from filing their return, directly from their bank account, without any fees or preregistration. Taxpayers can schedule payments up to 30 days in advance...

24 Jun 2020
0

What Qualifies as a “Coronavirus-Related Distribution”?

Roger Rossmeisl, CPA
Individual Tax Briefs
What Qualifies as a "Coronavirus-Related Distribution"?

As you may have heard, the Coronavirus Aid, Relief and Economic Security (CARES) Act allows “qualified” people to take certain “coronavirus-related distributions” from their retirement plans without paying tax. So how do you qualify? In other words, what’s a coronavirus-related distribution? Early distribution basics In general, if you withdraw money from an IRA or eligible retirement plan before you reach age 59½, you must pay a 10% early withdrawal tax. This is in addition to any tax you may owe on the income from the withdrawal. There are several exceptions to the general rule. For example, you don’t owe the additional 10% tax if you become totally and permanently disabled or if you use the money to pay qualified higher education costs or medical expenses New exception Under the CARES...

22 Jun 2020
0

COVID-19 Individual Tax Questions Answered

Roger Rossmeisl, CPA
Individual Tax Briefs
COVID-19 Individual Tax Questions Answered

The Coronavirus (COVID-19) pandemic has affected many Americans’ finances. Here are some COVID-19 individual tax questions answered. My employer closed the office and I’m working from home. Can I deduct any of the related expenses? Unfortunately, no. If you’re an employee who telecommutes, there are strict rules that govern whether you can deduct home office expenses. For 2018–2025 employee home office expenses aren’t deductible. (Starting in 2026, an employee may deduct home office expenses, within limits, if the office is for the convenience of his or her employer and certain requirements are met.) Be aware that these are the rules for employees. Business owners who work from home may qualify for home office deductions. My son was laid off from his job and is receiving unemployment benefits. Are they...

16 Jun 2020
0

Residency Audits on Departing Californians

Roger Rossmeisl, CPA
Individual Tax Briefs
Residency Audits on Departing Californians

                In the attached audio clip (click on photo above to listen), Spidell Publishing's "California Minute" discusses a subject that is gaining traction with the California Franchise Tax Board.  With California’s increasing taxes and regulations, many people are leaving the Golden state for greener pastures. When a new nonresident taxpayer, especially one with high income, comes into the FTB’s sights, even before the taxpayer knows an audit is happening, the auditor will have pulled documents from other government databases and built the residency case. (This is Blog Post #829) Spidell Publishing, Inc. has been a critical source of California tax information for tax professionals since 1975, promoting ideas, references, solutions, and guidance, plus news and commentary covering all aspects of tax and its administration....

03 Jun 2020
0

Keep Life Insurance Out of Your Estate

Roger Rossmeisl, CPA
Individual Tax Briefs
Keep Life Insurance Out of Your Estate

If you have a life insurance policy, you probably want to make sure that the life insurance benefits your family will receive after your death won’t be included in your estate. That way, the benefits won’t be subject to the federal estate tax. Under the estate tax rules, life insurance will be included in your taxable estate if either: Your estate is the beneficiary of the insurance proceeds, or You possessed certain economic ownership rights (called “incidents of ownership”) in the policy at your death (or within three years of your death). The first situation is easy to avoid. You can just make sure your estate isn’t designated as beneficiary of the policy. The second situation is more complicated. It’s clear that if you’re the owner of the...

03 Jun 2020
0

2019 Gift Tax Return Deadline is Coming Up

Roger Rossmeisl, CPA
Individual Tax Briefs
2019 Gift Tax Return Deadline is Coming Up

If you made large gifts to your children, grandchildren or other heirs last year, it’s important to determine whether you’re required to file a 2019 gift tax return. And in some cases, even if it’s not required to file one, it may be beneficial to do so anyway. Who must file? Generally, you must file a gift tax return for 2019 if, during the tax year, you made gifts: That exceeded the $15,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse), That you wish to split with your spouse to take advantage of your combined $30,000 annual exclusion, That exceeded the $155,000 annual exclusion for gifts to a non-citizen spouse, To a Section 529 college savings plan and wish to accelerate up to five...

25 May 2020
0

Home Mortgage Interest Deduction Rules

Roger Rossmeisl, CPA
Individual Tax Briefs
Home Mortgage Interest Deduction Rules

If you own a home, the interest you pay on your home mortgage may provide a tax break. However, many people believe that any interest paid on their home mortgage loans and home equity loans is deductible. Unfortunately, that’s not true. First, keep in mind that you must itemize deductions in order to take advantage of the home mortgage interest deduction. Deduction and limits for “acquisition debt” A personal interest deduction generally isn’t allowed, but one kind of interest that is deductible is interest on mortgage “acquisition debt.” This means debt that’s: 1) secured by your principal home and/or a second home, and 2) incurred in acquiring, constructing or substantially improving the home. You can deduct interest on acquisition debt on up to two qualified residences:...

19 May 2020
0

Economic Impact Payment Less Than You Expected?

Roger Rossmeisl, CPA
Individual Tax Briefs
Economic Impact Payment Less Than You Expected?

Nearly everyone has heard about the Economic Impact Payment (EIP) that the federal government is sending to folks to help mitigate the effects of the coronavirus (COVID-19) pandemic. The IRS reports that in the first four weeks of the program, 130 million individuals received payments worth more than $200 billion. However, some people are still waiting for a payment. And others received an EIP but it was less than what they were expecting. Here are some answers why this might have happened. Economic Impact Payment Basic Amounts If you’re under a certain adjusted gross income (AGI) threshold, you’re generally eligible for the full $1,200 ($2,400 for married couples filing jointly). In addition, if you have a “qualifying child,” you’re eligible for an additional $500. Here are some of the...

10 May 2020
0

Gig Economy Workers and Businesses Guidance on IRS Website

Roger Rossmeisl, CPA
Individual Tax Briefs
Gig Economy Workers and Businesses Guidance on IRS Website

Earlier this year, the IRS has announced in IR 2020-4 that it had launched the Gig Economy Tax Center on it's website, IRS.gov. The new website provides guidance specifically designed for gig economy workers and businesses, i.e., those people who earn income providing on-demand work, services or goods. Background The gig economy is also known as the sharing, on-demand or access economy. It usually includes businesses that operate through a digital platform, an app or website, to connect people and to provide services to customers. While there are many types of gig economy businesses, ride-sharing (i.e. Uber/Lyft) and home rentals (i.e. AirBNB) are two of the most popular. Often, gig economy activity is through a digital platform like an app or website. IRS summarizes the unique tax aspects of...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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