For one reason or another, you may need to take some money out of an IRA before reaching retirement.* You can withdraw money from an IRA at any time and for any reason, but it's important to keep in mind that most IRA withdrawals are at least partially taxable. In other words, you'll owe regular income tax on the amount. In addition, the taxable portion of a withdrawal taken before age 59 1/2, which is called an "early withdrawal," will be hit with a 10% penalty — unless you qualify for an exception.
In the News
Earlier this year, employers were polled by Mercer, a global benefits consulting service, to give their preliminary thinking about flexible work arrangements in a post-pandemic environment. Their answers suggest that, in some cases, companies with employees working remotely have become more receptive to these arrangements.
Most people aren't currently exposed to the federal estate tax, thanks to the generous unified federal estate and gift tax exemptions. However, there are still good reasons to review your estate plan and possibly update it to reflect the current federal estate and gift tax regime as well as life events. Plus, there's always uncertainty about the future direction of the federal estate and gift tax rules.
As you know, we spend a lot of time in this e-newsletter talking about tax return filing responsibilities. But not everyone is required to file. If a person's income falls below prescribed levels, he or she may not have to bother. However, as we'll explain, it may be a good idea to file even if it's not required.
The Achieving a Better Life Experience (ABLE) Act of 2014 allows states to set up ABLE account programs, which are similar to state-run Section 529 college savings programs. That is, you can establish a tax-favored ABLE account to cover qualified disability expenses of a family member or loved one who's named as the designated account beneficiary. Here's how you can take advantage of this tax-advantaged opportunity.
The CARES Act granted several valuable federal tax breaks for individuals and businesses. But most will expire at the end of 2020 or at the end of tax years that begin in 2020. Here's a roundup of tax breaks scheduled to go off the books soon, unless Congress extends them.
The FBI has warned of a staggering increase in ransomware attacks against businesses since the start of the COVID-19 pandemic. Here's what business owners and managers should know about these attacks to help prevent them — and manage an attack if preventive measures fall short.
The Families First Coronavirus Relief Act (FFCRA) made substantial tax subsidies available to eligible employers, so they can provide paid sick leave and Family and Medical Leave Act (FMLA) leave for certain employees impacted by the COVID-19 pandemic.
Today's college students often leave school with an overwhelming amount of debt. In some cases, student loans are discharged (also known as being cancelled or forgiven). In other cases, these loans are paid off by an employer. Both actions have tax consequences for the student loan borrowers. We'll explain the tax implications, but first, let's cover some necessary background information.
Thursday, October 22, 2020
Over the years, Congress has established some nice tax breaks for transportation-related employee fringe benefits to encourage taxpayers to be more ecology-minded when commuting to work.