Category Archives: EricJohn Ltd

The final deadline for 2019 tax returns

Thursday (Oct. 15) is the last deadline for 2019 income tax returns. It really only affects those who asked to delay filing earlier. For those taxpayers, here’s your reminder. If you applied for an automatic extension to file with the IRS around Tax Day – which, you’ll remember, was moved from April 15 to July 15 because of the coronavirus epidemic – your time is almost up. The 2019 return is due to the Internal Revenue Service by 11:59 p.m. on Thursday. Most likely, you estimated and paid an amount of income tax back then. Now is the time to … Continue reading

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Tax-Saving Window Is Closing for Retirees

Retirees now can act to change their normal IRA payouts and avoid some income taxes, but they’ll have to be quick.  The Internal Revenue Service this week reminded owners of IRAs and beneficiaries of other retirement plans about the Aug. 31 deadline for halting their scheduled payments from those plans. Congress suspended the Required Minimum Distributions (RMD) from those plans only for the year 2020. The thought was to help them minimize taxes in these difficult financial times. That waiver was part of the coronavirus relief package called the CARES Act, which is short for Coronavirus Aid, Relief and Economic … Continue reading

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Who Should Sign Your Tax Return?

Well, you should sign, obviously!  So should any tax preparer you paid to fill out the return. But sometimes life gets in the way of that simple solution.  What if you’re in a hospital bed? What if you’re out of the country on military duty?  What if your son or daughter is too young to sign? (Children can have income and taxes due before they can write, of course.) Here are a few Internal Revenue Service guidelines passed along by seminar firm TaxSpeaker. Child’s return – Children can turn in their own tax returns and still qualify as dependents on … Continue reading

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Check Here For A 50% Return. Really!

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

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Reminder – Tax Time Has Arrived!

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

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Open the Plain White Envelope!

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

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Pandemic Unemployment Benefits Are Income

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

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The Fix-It Form Goes Electronic, Finally!

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

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More Virus-related Relief From The Feds

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

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RMDs In The Year Of Coronavirus

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

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