What Types of Records Should You Keep for Tax-Deductible Mileage?

Some people record all their mileage on a calendar, planner, or business diary that they keep in their car. Be sure to jot down the date, the purpose of the trip, the starting and ending odometer readings, and the total number of miles driven. Another good source of documentation is a copy of the forms that you provide to your employer for expense reimbursement.

Remember, you are entitled to deduct the difference between the IRS business mileage reimbursement rate (54 …

What is the Capital Gains Exclusion for the Sale of a House?

Single taxpayers can exclude up to $250,000 of capital gains on the sale of a home, and married taxpayers filing jointly can exclude $500,000.

Taxpayers are eligible for the exclusion if they have owned and used a home as their main home for a period aggregating at least two years out of the five years prior to its date of sale. The exclusion is allowed each time that you sell a primary residence but no more than once every two …

Can You Split a Federal Income Tax Refund Between a Direct Deposit and a Paper Check?

No. You cannot split your refund between a direct deposit and a paper check. According to IRS tax refund procedures, you can either opt for the safety, security, and speed of direct deposit to one, two, or three different accounts, or you can request your refund via a paper check, but you cannot combine the two refund methods.

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Can You Direct Deposit a Refund From an Amended Tax Return?

You cannot even have the refund amount direct deposited into any financial account. At the present time (2017), the IRS does not offer a direct deposit option for refunds on amended returns. In fact, there is no place on the form to designate a place for direct deposit.

In addition, only an original tax return can be electronically filed. You must file Form 1040X for an amended return on paper and mail it to the IRS.

The IRS will mail …

How do I pay taxes on my required minimum distribution (RMD) so I don’t get in trouble with the IRS?

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 It is a good idea to set aside a portion of the money withdrawn from a tax-deferred retirement plan for the required minimum distribution (RMD) and make quarterly estimated tax payments to the IRS unless your plan custodian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 …