As you probably already know, there are two basic types of IRAs: the traditional IRA and the Roth IRA. With either one, the deadline for contributions for the 2020 tax year is May 17, 2021 (extended from April 15, 2021). There are no further extensions even if you obtain the regular “automatic extension” for [...]
Congress keeps raising the stakes for the Child Tax Credit (CTC). Following other recent tax law changes, the new American Rescue Plan Act (ARPA) includes several significant enhancements to the CTC for 2021. What’s more, these tax breaks will start paying off in July—not when you file your 2021 tax return. Background: Prior to ARPA, [...]
The pandemic has seen a dramatic rise in the instances of Unemployment Fraud in the United States. The Alabama Department of Labor has confirmed nearly 30,000 cases throughout the state. We have seen plenty of this type of fraud as well. Businesses and employees are being targeted, with scammers using real names to file unemployment claims [...]
Do you own investment real estate—perhaps an apartment building—you rent out to tenants? Despite complications this year, the real estate may still be a valuable source of income. Of course, any rental income you receive is taxable, but the resulting tax liability may be offset by deductible expenses. In some cases, you might even qualify [...]
On March 17, the IRS bowed to pressure and postponed the due date for filing 2020 tax returns by one month, from April 15 to May 17. (May 15 falls on a Saturday.) Even better: The extension also applies to payments of tax liability. Subsequently, the IRS clarified that taxpayers have until May 17 to [...]
In the latest round of COVID-19 legislation, the American Rescue Plan Act of 2021 passed the Senate by a 50-49 vote on March 6, 2021. The bill had been subject to many changes in the Senate after passing in the House on February 27. The bill was signed into law by the President on [...]
Frequently, taxpayers pay close attention to itemized deductions, but forget about “above-the-line” deductions that could be even more valuable. These deductions reduce your adjusted gross income (AGI) for various tax purposes. Following is a list of ten key items available on 2020 returns. Charitable donations: Usually, charitable deductions are limited to itemizers. However, under the [...]
You are not alone. Some 260,000 taxpayers also did. These notices are called CP59 notices. The IRS has not finished processing 2019 returns due to COVID-19 delays and many of these notices were sent in error. The IRS has issued a news release saying these notices can be disregarded if you did in fact file [...]
The massive law enacted by Congress last year in response to the COVID-19 outbreak—the Coronavirus Aid, Relief, and Economic Security (CARES) Act—authorized the distribution of Economic Impact Payments (EIPs) to qualified individuals. (Late in December, Congress authorized another round of payments.) But some eligible taxpayers were shorted or did not receive any payment at all. [...]
Are you planning to sell securities at the end of the year to “harvest” a long-term capital gain? Generally, the maximum tax rate on long-term capital gains is 15% (20% for certain upper-income taxpayers). To qualify as long-term gain, you must have owned the securities for more than one year. For these purposes, the controlling [...]