It depends. Tax law requires the payment of income taxes throughout the year as you earn income. This obligation can be met through quarterly estimated tax payments, tax withholding, or both. It is a good idea to set aside a portion of the money withdrawn from a tax-deferred retirement plan for the required minimum distribution (RMD) and make quarterly estimated tax payments to the IRS unless your plan custodian provides income tax withholding services. The IRS provides payment vouchers to …
Are 4-H club expenses tax deductible? My son racked up a lot of expenses on his project.
More than likely they are not. Unless your son has a profitable bona fide business (e.g., raising and selling livestock as part of a 4-H project), the expenses for his 4-H project are probably considered “hobby” expenses for tax purposes and would not be deductible. Consult with a tax adviser for specifics related to your situation. If, as a parent of a 4-H’er, you’ve become a volunteer leader, you may be able to deduct certain expenses as a volunteer.
See …
How Long do Taxpayers Have to Claim a Tax Refund?
Tax law provides most taxpayers with a three-year window of opportunity for claiming a tax refund. If no return is filed to claim a refund within three years, the money becomes the property of the U.S. Treasury. The three-year limit begins on the date that the tax return was originally due.
For example, for 2016 returns due on the tax filing date in April 2017, the window of opportunity ends three years later in April 2020. The law requires that …
Once a person’s estate has been settled, how long should you keep tax returns that the deceased had filed?
Three years from the year that the estate was settled would be sufficient for federal income tax returns. This is the same minimum time frame that is suggested to keep documentation for federal tax returns when tax filers are alive. If you want to be on the safe side, you can extend this up to six years, which is the time frame in which the IRS can initiate an inquiry if it suspects that someone did not pay their fair …
Due to circumstances beyond my control, my Required Minimum Distribution (RMD) was not withdrawn until early January. What is the procedure I need to follow in such a case?
The deadline date for Required Minimum Distributions (RMD) is December 31 of each year except for your first RMD. You generally have until April 1 of the year following the calendar year that you turn 70½ to take your first RMD. You can withdraw your RMD in one lump sum or make periodic withdrawals throughout the year. Failure to make RMD withdrawals triggers an excess accumulation tax. The tax is 50 percent of the required distribution that you didn’t take.…
How long must I keep real estate documents for property no longer owned?
While the basic rule is to keep records for three years after you have filed your return, that period is lengthened if any information is questioned by the Internal Revenue Service (IRS). Then it becomes three years after the final resolution of the item(s) in question for records related to the item(s). To be on the safe side, some real estate records should be kept for six years, and some may need to be kept indefinitely.
For a more complete …
What is the Final Deadline to Make an IRA Contribution?
The IRS is firm on the tax filing deadline. An IRA contribution for the prior calendar year must be made by the tax filing deadline, which does not include extensions. Contributions made after April 15th (or an alternate date if this date falls on a holiday or a weekend) will count as a contribution for the current tax year. For example, a contribution made after the 2017 tax filing deadline will be considered a 2018 IRA account contribution.
Also, when …
How Does Losing a Job Affect Your Income Taxes?
There are a number of ways that income taxes can be affected by the loss of a job. Below are descriptions of three common situations and information from the IRS about how they affect federal income taxes:
- You get a new job but earn less than you did before: If you had a high income previously, where certain tax deductions were limited, you may no longer be subject to income-based phase-outs. If your income was more moderate before and is
What were Traditional IRA and Roth IRA Contribution Limits in the Past?
IRAs were established by legislation passed in 1974. Traditional individual retirement accounts (IRAs) first became available in 1975. Anyone with earned income can make the maximum traditional IRA contribution as long as they had at least that much income in a given year. A non-working spouse can establish his/her own traditional IRA if the earned income of the working spouse equals or exceeds the total contributions to both partners’ IRAs.
IRA maximum contribution limits have increased over the years. They …
What is the Difference Between Progressive and Regressive Taxes?
A progressive tax is a type of tax that takes a larger percentage of income from taxpayers as their income rises. An example is the federal income tax, where there are six marginal tax brackets ranging from 10% (lowest-income taxpayers) to 39.6% (highest-income taxpayers). Most state income taxes have a similar progressive structure.
A regressive tax is the exact opposite. Higher-income taxpayers pay a smaller percentage of their income than lower-income taxpayers because the tax is not based on ability …