Happy New Year — and welcome to the new decade! We hope that you had a joyous holiday season surrounded by friends and family.
If you want to stash away more money for retirement in 2020, the Internal Revenue Service (IRS) recently announced that the contribution limits for some popular retirement accounts have increased.
Also experiencing a change for 2020 are the IRS tax rate tables and standard deductions.
Let’s take a look at the retirement account changes first.
The gig economy continues to expand. Workers, who are freelancers or independent contractors, now number roughly 57 million, which is about half of the entire working population.
Gig workers need to understand their responsibility to the Internal Revenue Service. Without employers to withhold taxes from their paychecks, gig workers must calculate their own payments to the IRS.
Compared to past joint tax return filing with their deceased spouse, a surviving spouse may land in a higher marginal tax bracket – referred to as the “widow’s penalty.” Unfortunately, the Tax Cuts and Jobs Act (TCJA) has made the widow’s penalty more severe in many instances.
With this in mind, clients, even in their 70s or 80s, may consider greater traditional IRA withdrawals or Roth IRA conversions as a means to take advantage of preferable marginal tax rates. It is important to act while both spouses are alive.
If you are enrolled in a high deductible health plan (HDHP) through work or on your own, funding a Health Savings Account (HSA) could be considered a top priority
Tax season is officially over, but the Internal Revenue Service may not be finished with you.
There is always the chance that the IRS will audit your returns.
As a result of the Tax Cuts and Jobs Act (TCJA) of 2017, many taxpayers may not itemize deductions in the future. Therefore, the benefit of deductions of smaller charitable donations you may have had in the past, could end up being eliminated under the new rules with the doubling of the standard deduction and removal of many other itemized deductions.
After prolonged negotiations between both houses of Congress, significant federal tax reform was signed into law by the President in the final week of 2017. What began as a Republican‐led blueprint for a simplified tax system in late 2016 became a 500+ page bill in its final form. The new tax laws will affect the vast majority of individuals and businesses through revised tax rates, as well as some noteworthy changes to deductions.
If you’d like to lower your tax burden for 2017, there is still time to pull this off, but you have to hurry. Here is a list of six actions that you can take before January 1, 2018.
Many donors don’t fully appreciate the potential tax savings that can come from charitable giving. Not only is the timing of the gift important, but how the gift is made (whether in cash or securities) also has an impact on the possible tax benefits.