SEP-IRA Benefits and Drawbacks

Businesses have a wide variety of retirement account options for owners and employees. The most common example is the 401-k. This blog concentrates on a less well-known option called SEP-IRA which stands for Simplified Employee Pension Individual Retirement Account. We are going to call them SEP for the rest of this article. They are really…

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Watch Out for Tax Penalties

Article Highlights: Underpayment of Estimated Tax and Withholding Penalty Required Minimum Distribution Penalty Late Filing Penalty Late Payment Penalty Negligence Penalty Fraud Penalty Dishonored Check Penalty Missing ID Number Penalty Early Withdrawal Penalty Failure to Report Tips Penalty Foreign Reporting Excessive Claim Penalty Frivolous Return Penalty Failure to File Information Returns Penalty Most taxpayers don’t…

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10 Things to Know About Credit Scores

Once you get above a certain age, you start hearing about a magical thing called a credit score. You hear that everybody has one and that you need to do everything you can to bolster it. You hear that there are things you can do to hurt your credit score and that once you’ve messed…

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Thinking of Dumping Old Tax Records?

Article Highlights: General statute is 3 years Some states are longer Fraud, failure to file and other issues can extend the statute Records to dump Record to Keep Longer Tired of having all those old tax records taking up drawer or closet space and collecting dust. Want to dump as much as you can? People…

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You Should Be Keeping Home Improvement Records

Article Highlights: Keeping home improvement records Home gain exclusion amounts Records may be required to avoid tax Individuals who meet the 2-out-of-5-year use and ownership tests can exclude up to $250,000 ($500,000 if both filer and spouse qualify) of gain from the sale of their home, and generally don’t need to keep a record of…

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Big Tax Breaks for Hiring Your Children in the Family Business

Article Highlights: Child Under the Age of 19 or a Student Under the Age of 24 Kiddie Tax Tax on a Child’s Earned Income Deduction for the Business Employment Taxes IRAs and Retirement Plans With jobs at a premium during the COVID-19 pandemic, you might consider hiring your children to help out in your business.…

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Gifts to Friends and Family

It always feels good to hook your friends and family up with gifts, but gifters beware. There are limits on how nice you can be before taxes become a factor. And it matters because federal gift tax rates ain’t no joke. They can reach as high as 40%. Connecticut is the only state that charges,…

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IRS Provides Additional 2020 RMD Rollover Relief

Article Highlights: CARES Act Waiver of RMDs 60-Day Rollover Period Extension Further Rollover Relief RMDs in General Effect of Withholding on RMD Rollover One IRA Rollover per 12 Months Rule The CARES Act waived required minimum distributions (RMDs) from IRAs and employer plans such as 401(k)s for 2020. However, the CARES Act was not passed…

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Government Keeping Your Refund?

Article Highlights: Bureau of the Fiscal Service Allowable Refund Offsets Disputing an Offset Injured Spouse Claim We all look forward to receiving our tax refunds, but what if you were expecting a refund and it never arrived?  It may be because you have outstanding federal or state debts—and not just tax-related debts.  The Treasury Department’s…

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Charity Volunteer Tax Breaks

Article Highlights: Away-from-home travel Lodging and meals Entertaining for charity Automobile travel Uniforms Substantiation requirements If you volunteered your time for a charity or governmental entity during the COVID-19 pandemic, you probably qualify for some tax breaks. These rules actually apply to all charity volunteers not just COVID-19 volunteers. Although no tax deduction is allowed…

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