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...

01 Apr 2020
0

IRS Q&A on Receiving Economic Impact Payments

Roger Rossmeisl, CPA
Individual Tax Briefs
IRS Q&A on Receiving Economic Impact Payments

In an Information Release (IR 2020-61), the Treasury Department and IRS have announced that distribution of economic impact payments, made as part of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, people who did not file 2018 or 2019 federal income tax returns will need to submit "a simple tax return" to receive the stimulus payment. The Information Release answers the following questions: Who is eligible for the economic impact payment? Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment...

01 Apr 2020
0

Expanded Coverage of the CARES Act

Roger Rossmeisl, CPA
Individual Tax Briefs, Small Business Tax Briefs, Taxes
Expanded Coverage of the CARES Act

This post provides expanded coverage of the CARES Act, Congress’s gigantic economic stimulus package that the President signed into law on March 27, 2020. PROVISIONS AFFECTING INDIVIDUALS Recovery rebates for individuals To help individuals stay afloat during this time of economic uncertainty, the government will send up to $1,200 payments to eligible taxpayers and $2,400 for married couples filing joints returns. An additional $500 additional payment will be sent to taxpayers for each qualifying child dependent under age 17 (using the qualification rules under the Child Tax Credit). Rebates are gradually phased out, at a rate of 5% of the individual’s adjusted gross income over $75,000 (singles or marrieds filing separately), $122,500 (head of household), and $150,000 (joint). There is no income floor or ‘‘phase-in’’—all recipients who are under...

01 Apr 2020
0

CARES Act Tax Relief for Individuals

Roger Rossmeisl, CPA
Individual Tax Briefs
CARES Act Tax Relief for Individuals

The Coronavirus Aid, Relief, and Economic Security (CARES) Act signed by President Trump on 3/27/2020 provides a variety of tax and financial relief measures to help Americans during the Coronavirus (COVID-19) pandemic. This post explains some of the CARES Act tax relief for individuals. Individual cash payments Under the new law, an eligible individual will receive a cash payment equal to the sum of: $1,200 ($2,400 for eligible married couples filing jointly) plus $500 for each qualifying child. Eligibility is based on adjusted gross income (AGI). Individuals who have no income, as well as those whose income comes entirely from Social Security benefits, are also eligible for the payment. The AGI thresholds will be based on 2019 tax returns, or 2018 returns if you haven’t yet filed your 2019...

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...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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