It’s time to take a look at a few things for your personal tax return.
New charitable contribution option If you do not itemize deductions, you can claim up to $300 of cash or check contributions to a charity on the front page of your tax return. Non-cash donations such as clothing, furniture and other personal property, do not qualify for this deduction. These non-cash donations are still reported on Schedule A (Itemized Deductions).
Did you receive a stimulus payment in 2020? The 2020 tax return asks for any stimulus payment received. If you received too little or none at all this may be the way to receive your payment.
Did you take a distribution from your qualified retirement plan or IRA? If so, and it was for COVID-19 reasons, you will not incur the 10% early withdrawal penalty. Also, you have options on how much to report on your tax return. For example, if you withdrew $60,000 from your IRA, you can report the entire amount in 2020 or spread this out over three years. If you repay the loan within three years, amended returns can be filed to refund the tax paid on the distribution. Contact us for the COVID rules on this distribution.
Look at Roth IRA conversions this year. Did you have less income in 2020? Do you have a traditional IRA? Will your income increase in 2021 and possibly further? What do you think tax rates will be going forward? These are all considerations when looking at Roth IRA conversions. This year may be a good opportunity to pay a one-time lower tax on your conversion. Generally, Roth IRA withdrawals are non-taxable. There are many considerations so call us to discuss your individual situation.
Is your income too high to qualify for a Roth IRA? You can still contribute to a traditional IRA and then convert to a Roth IRA. If you have multiple existing traditional IRA’s the rules are a bit different. Call us and we can discuss the details.
New rules for 529 accounts You can use 529 accounts to pay for apprenticeship program expenses such as fees, books, supplies and equipment required for the program. Also, up to $10,000 (in total, not yearly) can be paid on qualified student loans. This can be for the designated beneficiary or their sibling.
How you can lower capital gains tax With record stock market values check with your financial adviser on estimated capital gains, interest, and dividends on your accounts. Several companies have announced extra year end dividends in anticipation of higher tax rates next year. If you have stock that’s declined in value it may be a good time to sell to offset other gains you may have.
We hope you and your family have a safe and happy holiday season. If you have any questions regarding your personal tax return, or any other related subject, please contact us at David Mills, CPA, LLC.
This tax season, make sure you are getting the tax return you deserve with our help. Taxes are a complex system, and having a knowledgeable and experienced professional at your back can be the best way to improve your return. We offer tax planning and preparation for both individuals and small to medium-sized businesses.
For business owners, your personal and business taxes are closely linked. It’s especially important for business owners to have proper tax preparation. One issue many business owners face is that sometimes business owners think only of yearly taxes, but they are subject to many more such as:
We have the experience and knowledge required to guide you through the many regulations and laws. Minimizing these taxes is a goal of every business. We can help you and your business through our advising!
Many individuals believe that their tax return is relatively simple. You can go the simple route, but you are likely making mistakes and missing out on deductions you are able to claim. We can help you get the most out of your tax return.
Get the most out of your tax return. Call us today so we can provide you with professional tax preparation. You’ll see the difference for yourself and your business.
If you are like most people regarding taxes, you don’t feel confident in what you are doing. A tax consultant can help relieve stress and reduce mistakes while filing taxes. Check out five reasons why you should consider hiring a tax consultant.
Have you found a mistake on a previous tax return in the past three years? You can work with a tax constant to file an amended return. A consultant can help to minimize any damage that may have been caused. It can also provide you with peace of mind in knowing that your tax return will be properly handled.
Have you gotten married or divorced in the last year? If so, your tax filing may be affected.
Filling Your taxes can be time-consuming. A tax consultant will be able to work quickly and efficiently. They will be able to save you the stress of making sure your taxes are done right.
Taxes can become confusing if you live and work in different states. If you’ve recently moved to a new state it can be confusing as well.
A tax consultant will be able to assist you in the different states’ tax rules and can help you sort out any issues that arise.
A common mistake of new business owners is waiting to hire a tax professional. How you file your taxes the first year can impact future tax filings. It is important to start off right.
David Mills is proud to assist our customers with their taxes and make recommendations that fit your needs. If you need assistance with your taxes, contact David Mills today. We look forward to working with you!
When it comes to paying your taxes, many people find themselves scrambling in April trying to get their act together. While you may think it would be an annual routine for many, about 20% of people wait until the last week to pay their taxes. Are you in that 20%? Whether you are or are not, understanding the benefits of filing taxes earlier than later is very important and will help taxpayers in the long run.
The most obvious reason to file your taxes early is to receive your tax refund as soon as you can. Last year the IRS made it possible to have your tax refund direct deposited into your account, which will allow you to receive your tax refund even faster rather than waiting weeks for a paper return.
Tax fraud is a major issue that many people end up having to deal with. While tax fraud is more common than you think, there are ways to prevent it. One of these ways is to file your taxes as early as possible. By filing taxes early, it will be more difficult for criminals to pull off. This is because if the IRS receives a duplicate return after you have already filed yours, it will be noted as fraudulent. If you have not filed yours yet, you could be in trouble.
If you discover that you owe a balance to the IRS, filing taxes early will allow you extra time to sort everything out. If you file as soon as you can in January, then you will have until mid-April to come up with the extra money that you owe. The extra time makes it much less stressful for you and your financial situation.
If you wait until the last minute to file your taxes, you may find yourself scrambling in search of receipts, personal information, etc. Thus, leading to the need for a tax extension. This turns into a serious issue when you owe a balance to the IRS and do not pay what you owe. The IRS will charge you interest and penalties until the full amount is paid off. Filing your taxes early will help you avoid all of these potential issues.
Waiting until the last minute to file taxes will do nothing but add additional stress to your life. You will feel the pressure to find your needed information and file as fast as you possibly can, which can lead to errors and other problems down the road. Tax season is stressful enough, there is no need to add even more stress by waiting until the last minute.
If you are in need of additional tax information or need assistance in filing your taxes, contact David Mills CPA LLC today. We provide expert accounting and financial services to small and medium-sized businesses, as well as individuals across Morton, Peoria, & the rest of Central Illinois. We look forward to answering any questions you may have!