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Latest Blog Posts
- Check Here For A 50% Return. Really!
- Reminder – Tax Time Has Arrived!
- Open the Plain White Envelope!
- Pandemic Unemployment Benefits Are Income
- The Fix-It Form Goes Electronic, Finally!
- More Virus-related Relief From The Feds
- RMDs In The Year Of Coronavirus
- Workers Can Tap IRAs To Cope With Coronavirus Finances
- IRS: Track Your Coronavirus Payment
- The Very Latest Word On Minnesota Estimated Taxes
Author Archives: Eric Buechler
Where can you expect to find a 50 percent return on some of your extra money? For some workers, the answer is: Internal Revenue Service. If that prospect seems too good to be true, take a look at the Retirement Savings Contribution Credit, also known as the “Saver’s Credit,” financial seminar firm Taxspeaker suggested recently. You can find that 50 cents on the dollar in your federal tax return, if you satisfy two basic qualifications: · Savings: Make a contribution to either a personal or an employer-sponsored retirement plan. Just about any type qualifies including traditional and Roth IRAs, a 401(k) account, a 403(b), … Continue reading
Yes, the coronavirus extension expires on Wednesday. Federal and state taxpayers have until the end of the day on July 15 to file their 2019 income tax returns and make payments. As almost everyone knows, the Internal Revenue Service and the Minnesota Department of Revenue granted a 3-month reprieve from the normal April 15 deadline because of the coronavirus emergency. So, on Wednesday, we’re back to the normal taxpaying procedures. Taxpayers who still cannot finish up their 2019 returns by then can file for an automatic extension on federal Form 4868. It postpones the date for filing the return to … Continue reading
You know that sinking feeling that you tossed something really important into the garbage? Apparently that dreaded goof came true for some names on the U.S. Treasury Department’s mailing list. They threw away a plain, white envelope that looked like junk mail but actually contained a prepaid debit card for their federal Economic Impact Payment – part of coronavirus relief. The card is worth at least $1,200 to each person. In mid-May, Treasury moved to speed up delivery of some payments by issuing prepaid debit cards. Until then, the payments had been issued as electronic bank deposits and paper checks. … Continue reading
The federal government recently added $600 a week to unemployment insurance benefits now being drawn by millions of workers. The extra cash was among three new benefits in the Coronavirus Aid, Relief and Economic Security Act (CARES), which took effect late in March. Generous as that is, though, workers might want to set aside some money for income taxes. The fact is, Congress has not exempted those $600-a-week payments or the regular unemployment benefits from federal taxes. With several types of pandemic payments underway, taxpayers might be baffled about tax impacts. For example, the well-publicized stimulus payments of up to $1,200 per … Continue reading
The Internal Revenue Service has promoted electronic filing for years, to the point where more than 90 percent of taxpayers are sending federal tax returns and other reports directly to its computers. But there’s been one big exception. The only way for taxpayers to change an individual income tax return after filing it has been by sending a paper Form 1040-X through the mail. Commissioner Charles Reddig now has announced that, after years of trying, the IRS has “overcome the unique challenges related to the 1040-X” and succeeded in moving it online. Beginning this summer, taxpayers will be able to amend … Continue reading
The federal government has found another way deep in the nooks and crannies of tax codes to help taxpayers in financial pain from the coronavirus epidemic. The Internal Revenue Service now is allowing mid-year changes to “cafeteria plans,” such as health Flexible Spending Arrangements (FSA), so that workers who use them can deal with losses of income, unexpected bills and, perhaps, postponements of health care appointments. Typically, the employees must tell employers which cafeteria plans they wish to use and how much of their wages to place in them during a firm enrollment period each year. The money goes into … Continue reading
We’ve written recently about ways to tap a retirement account for extra money during the coronavirus emergency. But what about the flip side – holding in tax-deferred money that was scheduled to be withdrawn from an IRA or 401(k)? It winds up that Congress temporarily suspended the rule on Required Minimum Distributions (RMD) in its coronavirus relief law. In short, retired workers can just omit the withdrawals they would have to take from their retirement accounts this year. It’s a one-time offer, good just for tax year 2020. Normally, when workers reach age 72 – it was 70½ until recently … Continue reading
American workers under the age of 59½ generally haven’t been able to reach into their IRAs without paying stiff penalties. But the federal government temporarily has changed that in the throes of the coronavirus epidemic. In March, the CARES Act (Coronavirus Aid, Relief and Economic Security Act) opened retirement plans to as much as $100,000 worth of penalty-free withdrawals for coronavirus victims. That gives workers and their families another lifeline from their own funds to endure the emergency, even if many would view it as a last resort. By the way, the temporary change also is available from some other … Continue reading
First came “Where’s My Refund?”, a way for taxpayers to track refunds from their federal tax returns. Now, with more than 80 million Americans due for coronavirus relief dollars, the Internal Revenue Service is going online again with a tracking service for those Economic Impact Payments. “Get My Payment,” which is located on the IRS Web site (www.irs.gov) , gives taxpayers a quick way to discover how much they will receive in payments and when the deposits might arrive. It tracks either electronic payments or paper checks. To use “Get My Payment,” taxpayers must provide a few identification details, including … Continue reading
Here is a late-breaking update about estimated payments of Minnesota income taxes. As noted in our previous post, the Minnesota Department of Revenue is requiring individual taxpayers to submit estimated taxes for the first quarter of the 2020 tax year by April 15. Those payments were not postponed by the emergency actions involving coronavirus. On Friday (April 10), Minnesota Revenue announced three formulas that will avoid penalties, interest or extra taxes. Taxpayers will be safe if they base the payments on: 90 percent of their estimated tax liability for 2020 or 100 percent of the taxes they paid for the … Continue reading