Final corrections for taxpayers who overpaid their taxes on unemployment compensation received in 2020 have been completed by the IRS. Approximately 14 million returns were corrected, resulting in nearly 12 million refunds totaling $14.8 billion.
Tax Breaks for Older Adults and Retirees
Everyone wants to save money on their taxes, and retirees and older adults are no exception. If you’re 50 or older, here are six tax tips that could help you do just that.
Standard vs. Itemized Deductions
When completing a tax return, taxpayers have two options: take the standard deduction or itemize their deductions. Most taxpayers use the option that gives them the lowest overall tax. Due to all the tax law changes in recent years, including increases to the standard deduction, that means taking the standard deduction – but not always. Let’s look at a few details about these two options.
What Is a Designated Roth Account?
Many 401(k) plans allow taxpayers to make Roth contributions as long as the plan has a designated Roth account. Your plan may also allow you to transfer amounts to the designated Roth account in the plan or borrow money.
How Filing Status Affects Your Tax Return
A taxpayer’s filing status defines the type of tax return form they should use when filing their taxes. Filing status can affect the amount of tax they owe, and it may even determine whether they need to file a tax return at all. As taxpayers get ready for the upcoming filing season, let’s take a closer look at how filing status affects a tax return.
Tip Income: Is it Taxable?
The short answer is that yes, tips are taxable. If you work at a hair salon, barber shop, casino, golf course, hotel, or restaurant, or drive a taxicab, then the tip income you receive as an employee from those services is considered taxable income. Here are a few other tips about tips:
Retirement Contributions Limits Announced for 2023
Cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for 2023 are as follows:
Take Retirement Plan Distributions by December 31
For many years, IRS rules stated that taxpayers could not keep retirement funds in their retirement accounts indefinitely. They must start taking withdrawals from their IRA, SIMPLE IRA, SEP IRA, or retirement plan account when they reach age 70 1/2. These withdrawals are known as required minimum distributions or RMDs.
There’s Still Time for Meal and Entertainment Tax Deductions
Business owners have until the end of 2022 to take advantage of the IRS Regulations on Meal & Entertainment Tax Deductions.
Eligible Families Can Claim Tax Benefits Until Nov. 17th
Starting in October, more than 9 million letters were sent out by the IRS to individuals and families who appear to qualify for a variety of key tax benefits – but did not claim them by filing a 2021 federal income tax return. Many in this group may be eligible to claim some or all of the 2021 Recovery Rebate Credit (RRC), the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC), and other tax credits depending on their personal and family situation. The letter provides a brief overview of each of these three credits. As a reminder, these and other tax benefits were expanded under last year’s American Rescue Plan Act (ARPA) and other recent legislation.