Workers Can Tap IRAs To Cope With Coronavirus Finances

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

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IRS: Track Your Coronavirus Payment

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

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The Very Latest Word On Minnesota Estimated Taxes

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

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Minnesotans: New Tax Day Details

By now, everyone knows that Tax Day has been pushed back to July 15. That’s the new deadline for individual taxpayers to file 2019 returns and to pay their taxes. Both federal and Minnesota governments gave us some more time because of the severe disruptions caused nationwide by the coronavirus disease emergency.  So, original due date, April 15, now looks like just another day in tax season for many of us.  Here are a few details Minnesotans will appreciate about the three-month delay: ·   It’s automatic. There are no applications or extension forms required. File and pay by July 15, and you’re … Continue reading

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How Now, New 1040?

The Internal Revenue Service is streamlining again for the 2019 tax filing season. Its basic form for individual taxpayers, the IRS Form 1040, is a bit shorter and has some convenient changes.  Among them, the tax agency has trimmed the paperwork by dropping three numbered schedules from its main package.  The 1040 for 2018 included six of those related schedules. The IRS did help senior citizens with a new, optional twist. Taxpayers who are 65 and older – born before Jan. 2, 1955 – can choose a customized version named. the “1040-SR.”  One convenience is a handy chart showing standard deduction … Continue reading

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Business Over Dinner? It May Be Delicious, But Is It Deductible?

The Internal Revenue Service on Wednesday (Feb. 26) came out with new regulation to “provide guidance” about business meals and related tax deductions. Basically, the tax agency is issuing its  interpretations of the federal Tax Cuts and Jobs Act from 2017 that cut out some deductions — most notably, the tax breaks for entertainment expenses. But, although those disappeared at the end of 2017, company owners and their employees still can deduct part of the costs of true business meals. For example, if a sales representative takes a potential client out to dinner for business reasons, the company can deduct … Continue reading

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Tax Time Begins Today!

It’s Monday, Jan. 27, and the computers at the Internal Revenue Service will begin to gulp in 2019 returns from individual taxpayers today. They’ll be processing a deluge of numbers. The IRS expects to collect 150 million returns just from individuals this season. Nonetheless, the earliest filers won’t be the bulk of those returns. Many of us still are waiting for necessary records – such as W-2 and 1099 forms from employers – to land in our mailboxes before filing. For example,  Friday (Jan. 31) is the IRS’s deadline for employers to send out those pay reports to workers. In … Continue reading

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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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