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...

03 May 2020
0

Changes to the Child Tax Credit

Roger Rossmeisl, CPA
Individual Tax Briefs
Changes to the Child Tax Credit

If you’re a parent, or if you’re planning on having children, you know that it’s expensive to pay for their food, clothes, activities and education. Fortunately, TCJA made changes to the Child Tax Credit, which is available for taxpayers with children under the age of 17, as well as a dependent credit for older children. Recent tax law changes Changes made by the Tax Cuts and Jobs Act (TCJA) make the child tax credit more valuable and allow more taxpayers to be able to benefit from it. These changes apply through 2025. Prior law: Before the TCJA kicked in for the 2018 tax year, the child tax credit was $1,000 per qualifying child. But it was reduced for married couples filing jointly by $50 for every $1,000 (or...

03 May 2020
0

Tax Aspects of Selling Mutual Fund Shares

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Aspects of Selling Mutual Fund Shares

Perhaps you’re an investor in mutual funds or you’re interested in putting some money into them. You’re not alone. The Investment Company Institute estimates that 56.2 million households owned mutual funds in mid-2017. But despite their popularity, the tax rules involved in selling mutual fund shares can be complex. Selling mutual fund shares: tax basics If you sell appreciated mutual fund shares that you’ve owned for more than one year, the resulting profit will be a long-term capital gain. As such, the maximum federal income tax rate will be 20%, and you may also owe the 3.8% net investment income tax. When a mutual fund investor sells shares, gain or loss is measured by the difference between the amount realized from the sale and the investor’s basis in...

23 Apr 2020
0

Economic Impact Payment FAQs

Roger Rossmeisl, CPA
Individual Tax Briefs
Economic Impact Payment FAQs

Millions of eligible Americans have already received their Economic Impact Payments (EIPs) via direct deposit or paper checks, according to the IRS. Others are still waiting. The payments are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here are some answers to Economic Impact Payment FAQs. Who’s eligible to get an EIP? Eligible taxpayers who filed their 2018 or 2019 returns and chose direct deposit of their refunds automatically receive an Economic Impact Payment. You must be a U.S. citizen or U.S. resident alien and you can’t be claimed as a dependent on someone else’s tax return. In general, you must also have a valid Social Security number and have adjusted gross income (AGI) under a certain threshold. The IRS also says that automatic payments...

19 Apr 2020
0

CARES Act’s Impact on Excess Business Losses

Roger Rossmeisl, CPA
Individual Tax Briefs
CARES Acts Impact on Excess Business Losses

Back in Blog Post #778 on 4/1/20, I summarized the Coronavirus Aid, Relief, and Economic Security (CARES) Act tax provisions.  That post included a brief discussion of the CARES Act’s impact on excess business losses.  Here is more about the deferral of, and changes to the limit on, excess business losses. Deferral of the excess business loss limits The Tax Cuts and Jobs Act (the 2017 Tax Law) provided that net tax losses from active businesses in excess of an inflation-adjusted $500,000 for joint filers, or an inflation-adjusted $250,000 for other covered taxpayers, are to be treated as net operating loss carryforwards in the following tax year. The covered taxpayers are individuals (or estates or trusts) that own businesses directly or as partners in a partnership or...

19 Apr 2020
0

Get My Payment Application Debuts on IRS.gov

Roger Rossmeisl, CPA
Individual Tax Briefs
Get My Payment Application Debuts on IRS.gov

As appearing in e-News for Tax Professionals: Issue Number 2020-16 Working with the Treasury Department, the new Get My Payment application, allowing taxpayers  to check on their Economic Impact Payments, debuted on the IRS website.  The application will answer common questions as an initial round of more than 80 million Economic Impact Payments hits recipients’ bank accounts. Get My Payment will show the projected date when a deposit has been scheduled, similar to the “Where’s My Refund tool” many taxpayers are already familiar with. Get My Payment also allows people to provide their bank account information. People who did not use direct deposit on their last tax return can also use the application to input their bank information to receive the payment by direct deposit, expediting...

17 Apr 2020
0

IRS Announces More COVID-19 Relief and Details

Roger Rossmeisl, CPA
Individual Tax Briefs
IRS Announces More COVID-19 Relief and Details

In the midst of the Coronavirus (COVID-19) pandemic, Americans are focusing on their health and financial well-being. To help with the impact facing many people, the government has provided a range of relief. Here are some new announcements made by the IRS. More deadlines extended As you probably know, the IRS postponed the due dates for certain federal income tax payments — but not all of them. New guidance now expands on the filing and payment relief for individuals, estates, corporations and others. Under IRS Notice 2020-23, nearly all tax payments and filings that would otherwise be due between April 1 and July 15, 2020, are now postponed to July 15, 2020. Most importantly, this would include any fiscal year tax returns due between those dates and any...

09 Apr 2020
0

CARES Act Changes EBP and Charitable Contribution Rules

Roger Rossmeisl, CPA
Individual Tax Briefs
CARES Act Changes EBP and Charitable Contribution Rules

As we all try to keep ourselves, our loved ones, and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes that were part of a tax law passed on March 27.  The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains a variety of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But also, the CARES Act changes EBP rules and provides a new tax break for some people who contribute to charity. Waiver of 10% early distribution penalty IRAs and employer sponsored retirement plans are established to be long-term retirement planning accounts. As such, the IRS imposes a penalty tax of an additional 10% if funds are...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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