30 Mar 2020
0

Cut Your Tax Bill with IRAs

Roger Rossmeisl, CPA
Individual Tax Briefs
Cutting Your Tax Bill with IRAs

If you’re getting ready to file your 2019 tax return, and your tax bill is higher than you’d like, there may still be an opportunity to cut your tax bill with IRAs. If you qualify, you can make a deductible contribution to a traditional IRA right up until the 2020 filing date and benefit from the resulting tax savings on your 2019 return. Do you qualify? You can make a deductible contribution to a traditional IRA if: You (and your spouse) aren’t an active participant in an employer-sponsored retirement plan, or You (or your spouse) are an active participant in an employer plan, and your modified adjusted gross income (AGI) doesn’t exceed certain levels that vary from year-to-year by filing status. For 2019, if you’re a joint tax...

25 Mar 2020
0

Coronavirus Tax Relief for Individuals

Roger Rossmeisl, CPA
Individual Tax Briefs
Coronavirus Tax Relief for Individuals

The IRS and Congress have responded with some Coronavirus tax relief for individuals. Taxpayers now have more time to file their tax returns and pay any tax owed because of the coronavirus (COVID-19) pandemic. The Treasury Department and IRS announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. Taxpayers can also defer making federal income tax payments, which are due on April 15, 2020, until July 15, 2020, without penalties and interest, regardless of the amount they owe. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. They can also defer their initial quarterly estimated federal income tax payments...

12 Mar 2020
0

Deducting Charitable Gifts on Your Tax Return

Roger Rossmeisl, CPA
Individual Tax Briefs
Deducting Charitable Gifts on Your Tax Return

Many taxpayers make charitable gifts — because they’re generous and they want to save money on their federal tax bills. But with the tax law changes that went into effect a couple years ago and the many rules that apply to charitable deductions, deducting charitable gifts may no longer yield you a tax break for your generosity. Are you going to itemize? The Tax Cuts and Jobs Act (TCJA), signed into law in 2017, didn’t put new limits on or suspend the charitable deduction, like it did with many other itemized deductions. Nevertheless, it reduces or eliminates the tax benefits of charitable giving for many taxpayers. Itemizing saves tax only if itemized deductions exceed the standard deduction. Through 2025, the TCJA significantly increases the standard deduction. For 2020,...

08 Mar 2020
0

Answers Regarding 2020 Individual Tax Limits

Roger Rossmeisl, CPA
Individual Tax Briefs
Answers Regarding 2020 Individual Tax Limits

Right now, you may be more concerned about your 2019 tax bill than you are about your 2020 tax situation. That’s understandable because your 2019 individual tax return is due to be filed in less than three months. However, it’s a good idea to familiarize yourself with tax-related amounts that may have changed for 2020 . . .  2020 individual tax limits. For example, the amount of money you can put into a 401(k) plan has increased and you may want to start making contributions as early in the year as possible because retirement plan contributions will lower your taxable income. Note: Not all tax figures are adjusted for inflation and even if they are, they may be unchanged or change only slightly each year due to...

15 Feb 2020
0

Filing Your Taxes Early Can Minimize Identity Theft

Roger Rossmeisl, CPA
Individual Tax Briefs
Filing Your Taxes Early Can Minimize Identity Theft

The IRS opened the 2019 individual income tax return filing season on January 27. Even if you typically don’t file until much closer to the April 15 deadline (or you file for an extension), consider filing your taxes early this year. The reason: You can potentially protect yourself from tax identity theft — and you may obtain other benefits, too. Tax identity theft explained and how filing your taxes early can help In a tax identity theft scam, a thief uses another individual’s personal information to file a fraudulent tax return early in the filing season and claim a bogus refund. The legitimate taxpayer discovers the fraud when he or she files a return and is informed by the IRS that the return has been rejected because one...

11 Feb 2020
0

4 Changes That May Affect Your Retirement Plan

Roger Rossmeisl, CPA
Individual Tax Briefs
4 Changes That May Affect Your Retirement Plan

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 which may affect your retirement plan. 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 to a traditional IRA, as long he or she has compensation, which generally means earned income from wages or self-employment. Change #2: The required minimum distribution (RMD) age was raised from 70½ to 72 Before 2020, retirement plan participants and IRA owners were...

06 Feb 2020
0

Tax Deductibility of Home Office Expenses

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Deductibility of Home Office Expenses

Technology has made it easier to work from home so lots of people now commute each morning to an office down the hall. However, just because you have a home office space doesn’t mean you can deduct expenses associated with it. What are the rules for tax deductibility of home office expenses? Regularly and exclusively In order to be deductible for 2019 and 2020, you must be self-employed and the space must be used regularly (not just occasionally) and exclusively for business purposes. If, for example, your home office is also a guest bedroom or your children do their homework there, you can’t deduct the expenses associated with the space. Two options If you qualify, the home office deduction can be a valuable tax break. There are two options...

31 Jan 2020
0

Tax Implications of Your Side Gig

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Implications of Your Side Gig

The number of people engaged in the “gig” or sharing economy has grown in recent years, according to a 2019 IRS report. But what are the tax implications of your side gig?  I'm talking about 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 don’t receive an income statement reporting the amount of money you made. IRS report details The IRS recently released a report examining two decades of tax returns and titled “Is Gig Work Replacing Traditional Employment?” It found that “alternative,...

26 Jan 2020
0

Adoption Related Tax Savings

Roger Rossmeisl, CPA
Individual Tax Briefs
Adoption Related Tax Savings

If you’re adopting a child, or you adopted one this year, there may be adoption related tax savings 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 parents may also be able to exclude from their gross income up to $14,080 for 2019 ($14,300 for 2020) of qualified adoption expenses paid by an employer under an adoption assistance program. Both the credit and the exclusion are phased out if the...

18 Jan 2020
0

What Does it Take to Get a Medical Expense Tax Deduction

Roger Rossmeisl, CPA
Individual Tax Briefs
What Does it Take to Get a Medical Expense Tax Deduction

As we all know, medical services and prescription drugs are expensive. You may be able to deduct some of your expenses on your tax return but the rules make it difficult for many people to qualify. However, with proper planning, you may be able to time discretionary expenses to your advantage for medical expense tax deduction purposes. The medical expense tax deduction: basic rules For 2019, the medical expense deduction can only be claimed to the extent your unreimbursed costs exceed 10% of your adjusted gross income (AGI). You also must itemize deductions on your return. If your total itemized deductions for 2019 o 2020 will exceed your standard deduction, moving or “bunching” nonurgent medical procedures and other controllable expenses into one tax year may allow you to...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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