Charitable Contributions: Quickly Find Out Which Groups Qualify!

Would the International Organization of Historic Postal Stamp Collectors, if it existed, qualify for a tax-free charitable contribution on your return? How about disaster relief organizations? In the final two weeks of the tax year, you might want to know – and fast. Last week we promised to pass along some guidance from the Internal Revenue Service about donations to charities and other tax-exempt organizations. Charitable giving is one of the few steps you can take to reduce taxes just before year-end, which now is less than two weeks away. Taxpayers can write a check or send money electronically to … Continue reading

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Flex Some Charitable Donations To Lower Taxes

It’s the time of the year when charity abounds and, at the same time, tax returns loom ahead.  Yes, you can help others AND, sometimes, yourself with year-end giving. But you might need to plan how to give, especially with tax reforms now solidly in place. Briefly, the only way for individual taxpayers to claim a federal tax deduction for charitable contributions is to itemize on Schedule A.  That schedule basically adds together list of expenses ranging from medical insurance premiums to interest on home loans for deduction on the tax return. Charitable donations are among them. But here’s also … Continue reading

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Cryptocurrency: It’s “Property” And It’s Taxable, IRS Says

Internal Revenue Service lately has been sending out reminders to people who trade in bitcoins and other financial creations that exist only in the digital world.   The message is:  Yes, this is all taxable. Bitcoin is perhaps the best known “cryptocurrency,” or virtual currency, being traded in exchanges on the Internet. The digital encyclopedia Wikipedia says there might be 4,000 types out there. The currencies are used both as assets like stocks and as payment for purchases like money.  Some employees even receive pay in bitcoin. But, while they are not legal tender, they have value. For tax purposes, the … Continue reading

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No Dawdling With Early IRA Distributions!

Taking an IRA distribution before age 59½ is one of those times when a worker must watch the calendar. You’ll want to be acting quickly and counting the days, as you’ll see here. Sometimes a taxpayer wants to move money from one retirement account to another, or perhaps he/she receives an unexpected distribution directly from a retirement account. If the taxpayer is younger than 59½ years old, a clock starts ticking on arrival.  He/she must roll over that money in a similar retirement account within 60 days, or the money will be heavily taxed.  This is not a time to … Continue reading

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HRA: Three letters That Might Help With Health Expenses

It hasn’t been much noticed, but employers will be able to help their workers afford health expenses to a greater degree beginning next year.  Remember the Health Reimbursement Arrangement, or “HRA”? It allowed employers to provide pre-tax dollars for their workers to pay health insurance premiums and out-of-pocket medical expenses. It has a history that dates back to 1954. The HRA pretty much disappeared when “Obamacare” (Affordable Care Act) arrived. It survived on the books only in limited fashion. Now the HRA has reappeared in its former glory! Employers large or small can offer it. Their employees also have fewer constraints. The Internal Revenue Service … Continue reading

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Minnesota Rewards College Savings Accounts

On Wednesday this week, taxpayers who help to pay for college educations officially could celebrate. Did you take time out to cheer National 529 College Savings Day? Well, it probably wasn’t high on the day’s to-do list for most of us.  But, Minnesotans who contribute to a college savings plan ought to take a hint from the observance and look into two of the state’s educational tax breaks. Many will be eligible for either the Education Savings Account Contribution Credit or the similar Education Savings Account Contribution Subtraction. Both of these allowances are broad. They apply to contributions to any … Continue reading

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Minnesota Gives Tax Salutes To Its Military

One way Minnesota recognizes its military members and their service comes in their tax returns! The state Department of Revenue decided that this month, which is National Military Appreciation Month would be a good time to recap the list of tax deductions and other courtesies available to Minnesota’s men and women in the Armed Forces. They often include Minnesota residents serving actively with regular forces, reserves or National Guard You can look up a list of tax breaks at one Internet address. Minnesota Revenue’s military information page  is:  https://www.revenue.state.mn.us/individuals/individ_income/Pages/Members_of_the_Military.aspx Here are a few to note: Active duty military pay subtraction … Continue reading

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Storm-struck Counties Get One More Week To File Minnesota Taxes

Storm-struck Counties Get One More Week To File Minnesota Taxes Minnesota authorities have extended the April 15 tax deadline by one week for taxpayers in 64 counties hit hard by last week’s winter storm. The Minnesota Department of Revenue said individual taxpayers and businesses now have until April 22 to file their state income tax returns. They will not face late penalties or interest for submitting returns during that extra week. The extension affects only Minnesota tax returns.  Federal returns still are due on April 15. The new deadline follows Gov. Tim Walz’s declaration of an emergency because of Winter … Continue reading

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Still Figuring? Extend Tax Deadline– Automatically!

If the Internal Revenue Service hasn’t heard from you yet, it’s time to think about taking an extension! April 15 really is Tax Day this year; there are no weekends or holidays pushing back the filing deadline, as in some previous years.  And, while there’s been some talk in Congress about giving everyone more time to file, those proposals haven’t turned into law yet. Nonetheless, the government does give taxpayers six more months to file the paperwork. An extension can be filed online or by mail. Better yet, it’s automatically approved. The IRS won’t ask you why you need it. … Continue reading

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