05 Mar 2024
0

If You Didn’t Contribute to an IRA Last Year, There’s Still Time

Roger Rossmeisl, CPA
Individual Tax Briefs
If You Didn't Contribute to an IRA Last Year, There's Still Time

If you’re gathering documents to file your 2023 tax return and you’re concerned that your tax bill may be higher than you’d like, there might still be an opportunity to lower it. If you qualify, you can make a deductible contribution to a traditional IRA right up until the April 15, 2024, filing date and benefit from the tax savings on your 2023 return. Who is eligible? You can make a deductible contribution to a traditional IRA if: You and your spouse aren’t active participants in an employer-sponsored retirement plan, or You or your spouse are an active participant in an employer plan, but your modified adjusted gross income (AGI) doesn’t exceed certain levels that vary from year to year by filing status. For 2023, if you’re a...

25 Feb 2024
0

Get Ready for the 2023 Gift Tax Return Deadline

Roger Rossmeisl, CPA
Individual Tax Briefs
Get Ready for the 2023 Gift Tax Return Deadline

Did you make large gifts to your children, grandchildren or others last year? If so, it’s important to determine if you’re required to file a 2023 gift tax return. In some cases, it might be beneficial to file one — even if it’s not required. Who must file? The annual gift tax exclusion has increased in 2024 to $18,000 but was $17,000 for 2023. Generally, you must file a gift tax return for 2023 if, during the tax year, you made gifts: That exceeded the $17,000-per-recipient gift tax annual exclusion for 2023 (other than to your U.S. citizen spouse), That you wish to split with your spouse to take advantage of your combined $34,000 annual exclusion for 2023, That exceeded the $175,000 annual exclusion in 2023 for...

25 Feb 2024
0

Filing Jointly or Separately as a Married Couple: What’s the Difference?

Roger Rossmeisl, CPA
Individual Tax Briefs
Filing Jointly or Separately as a Married Couple: What's the Difference?

When you file your tax return, a tax filing status must be chosen. This status is used to determine your standard deduction, tax rates, eligibility for certain tax breaks and your correct tax. The five filing statuses are: Single Married filing jointly, Married filing separately, Head of household, and Qualifying surviving spouse. If you’re married, you may wonder if you should file joint or separate tax returns. It depends on your individual tax situation. In general, you should choose the filing status that results in the lowest tax. But keep in mind that, if you and your spouse file a joint return, each of you is “jointly and severally” liable for the tax on your combined income. And you’re both equally liable for any additional tax the IRS...

18 Feb 2024
0

If You Gave to Charity in 2023, Check to See That Your Have Substantiation

Roger Rossmeisl, CPA
Individual Tax Briefs
If Your Gave to Charity in 2023, Check to See That You Have Substantiation

Did you donate to charity last year? Acknowledgment letters from the charities you gave to may have already shown up in your mailbox. But if you don’t receive such a letter, can you still claim a deduction for the gift on your 2023 income tax return? It depends. What the law requires To prove a charitable donation for which you claim a tax deduction, you must comply with IRS substantiation requirements. For a donation of $250 or more, this includes obtaining a contemporaneous written acknowledgment from the charitable organization stating the amount of the donation, whether you received any goods or services in consideration for the donation and the value of any such goods or services. “Contemporaneous” means the earlier of: The date you file your tax return, or ...

18 Feb 2024
0

IRAs: Build a Tax-Favored Retirement Nest Egg

Roger Rossmeisl, CPA
Individual Tax Briefs
IRAs: Build a Tax-Favored Retirement Nest Egg

Although traditional IRAs and Roth IRAs have been around for decades, the rules involved have changed many times. The Secure 2.0 law, which was enacted at the end of 2022, brought even more changes that made IRAs more advantageous for many taxpayers. What hasn’t changed is that they can help you save for retirement on a tax-favored basis. Here’s an overview of the basic rules and some of the recent changes. Rules for traditional IRAs You can make an annual deductible contribution to a traditional IRA if: You (and your spouse) aren’t active participants in employer-sponsored retirement plans, or You (or your spouse) are active participants in an employer plan, and your modified adjusted gross income (MAGI) doesn’t exceed certain levels that vary annually by filing status. For...

18 Feb 2024
0

Answers to Your Tax Season Questions

Roger Rossmeisl, CPA
Individual Tax Briefs
Answers to Your Tax Season Questions

The IRS announced it opened the 2024 income tax return filing season on January 29. That’s when the tax agency began accepting and processing 2023 tax year returns. Here are answers to seven tax season questions we receive at this time of year. (1)  What are this year’s deadlines? The filing deadline to submit 2023 returns or file an extension is Monday, April 15, 2024, for most taxpayers. Taxpayers living in Maine or Massachusetts have until April 17, due to state holidays. If taxpayers reside in a federally declared disaster area, they may have additional time to file. (2) When is my return due if I request an extension? If you’re requesting an extension, you’ll have until October 15, 2024, to file. Keep in mind that an extension of time...

13 Feb 2024
0

The Kiddie Tax Could Affect Your Children Until They’re Young Adults

Roger Rossmeisl, CPA
Individual Tax Briefs
The Kiddie Tax Could Affect Your Children Until They're Young Adults

The so-called “kiddie tax” can cause some of a child’s unearned income to be taxed at the parent’s higher marginal federal income tax rates instead of at the usually much lower rates that a child would otherwise pay. For purposes of this federal income tax provision, a “child” can be up to 23 years old. So, the kiddie tax can potentially affect young adults as well as kids. Kiddie tax basics Perhaps the most important thing to know about this poorly understood provision is that, for a student, the kiddie tax can be an issue until the year that he or she turns age 24. For that year and future years, your child is finally kiddie-tax-exempt. The kiddie tax is only assessed on a child’s (or young adult’s)...

04 Feb 2024
0

It’s Possible (But Not Easy) to Claim a Medical Expense Tax Deduction

Roger Rossmeisl, CPA
Individual Tax Briefs
It's Possible (But Not Easy) to Claim a Medical Expense Tax Deduction

One of your New Year’s resolutions may be to pay more attention to your health. Of course, that may cost you. Can you deduct your out-of-pocket medical costs on your tax return? It depends. Many expenses are tax deductible, but there are several requirements and limitations that make it difficult for many taxpayers to actually claim a deduction. The rules Medical expenses can be claimed as a deduction only to the extent your unreimbursed costs exceed 7.5% of your adjusted gross income. Plus, medical expenses are deductible only if you itemize, which means that your itemized deductions must exceed your standard deduction. Due to changes in the Tax Cuts and Jobs Act, which generally went into effect in 2018, many taxpayers no longer itemize. Eligible medical costs include...

01 Jan 2024
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Don’t Overlook Taxes When Contemplating a Move to Another State

Roger Rossmeisl, CPA
Individual Tax Briefs
Don't Overlook Taxes When Contemplating a Move to Another State

When you retire, you may think about moving to another state — perhaps because the weather is more temperate or because you want to be closer to family members. Don’t forget to factor state and local taxes into the equation. Establishing residency for state tax purposes may be more complex than you think. Pinpoint all applicable taxes It may seem like a smart idea to simply move to a state with no personal income tax. But, to make a wise and informed decision, you must consider all taxes that can potentially apply to a state resident. In addition to income taxes, these may include property taxes, sales taxes and estate taxes. If the state you’re considering has an income tax, look at the types of income it taxes....

01 Jan 2024
0

Court Awards and Out-of-Court Settlements May (or May Not) Be Taxed

Roger Rossmeisl, CPA
Individual Tax Briefs
Court Awards and Out-of-Court Settlements May (or May Not) be Taxed

Monetary awards and settlements are often provided for an array of reasons. For example, a person could receive compensatory and punitive damage payments for personal injury, discrimination or harassment. Some of this money is taxed by the federal government, and perhaps by state governments. Hopefully, you’ll never need to know how payments for personal injuries are taxed. But here are the basic rules — just in case you or a loved one does receive an award or settlement and needs to understand them. Under tax law, individuals are permitted to exclude from gross income damages that are received on account of a personal physical injury or a physical sickness. It doesn’t matter if the compensation is from a court-ordered award or an out-of-court settlement, and it...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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