Not all income is taxable, according to the IRS. The taxability of income depends on specific rules, requirements, and regulations. Here are several categories of income that are generally not subject to tax: Life Insurance Proceeds When a beneficiary receives life insurance proceeds after the policyholder’s death, these funds are typically tax-free. However, any […]
— Read moreOn July 18, 2024, the Internal Revenue Service (IRS) finalized rules regarding the withdrawal of funds from inherited retirement accounts. These new regulations state that most beneficiaries must withdraw a minimum amount each year over a 10-year period. This is a significant change from the previous policy, which allowed heirs to stretch withdrawals over their […]
— Read moreThe IRS has issued new guidance on June 20, 2024, regarding exceptions to the 10% additional tax for certain emergency distributions and distributions to domestic abuse victims, as outlined in Notice 2024-55. Background Under IRC Section 72(t)(1), distributions from qualified retirement plans are typically subject to a 10% additional tax unless they meet certain exceptions. […]
— Read moreFiling your taxes online offers convenience, allowing you to manage your taxes on your own schedule. However, encountering a rejection of your e-filed return can be frustrating, especially if it happens close to the filing deadline, typically April 15. Fortunately, the IRS provides a five-day grace period for taxpayers to refile a rejected return if […]
— Read moreNavigating the complexities of investment portfolio management involves strategic allocation of resources, especially when it comes to deciding where to direct new funds within your Individual Retirement Account (IRA). An effective approach is to conduct a thorough analysis of your portfolio’s current composition, evaluating the distribution across diverse asset classes, sectors, and geographical regions. For […]
— Read moreThe term “Backdoor Roth IRA” refers to a strategy employed by individuals with higher incomes who are ineligible to directly contribute to a Roth IRA due to specific income limits. Instead of making a direct Roth contribution, these individuals contribute to a non-deductible traditional IRA and subsequently convert it into a Roth IRA. A Roth […]
— Read moreThe Retirement Savings Contributions Credit, commonly known as the Saver’s Credit, is designed to offset a portion of the first $2,000 that individuals voluntarily contribute to retirement accounts like Individual Retirement Arrangements (IRAs), 401(k) plans, and similar workplace retirement programs. This credit extends to eligible individuals with disabilities who are designated beneficiaries of an Achieving […]
— Read moreIn a significant development that spells trouble for gig economy workers and consultants, the Internal Revenue Service (IRS) has sharply increased the penalty for tax underpayments. The penalty, which has nearly tripled since 2021, has now reached 8% as of October 1, a considerable jump from the 3% rate observed just two years ago. This […]
— Read moreReceiving a tax refund is often a welcome financial boost, but what happens when the expected windfall falls short? Many taxpayers have found themselves in the perplexing situation of not receiving their full tax refund from the Internal Revenue Service (IRS). Before delving into the reasons for an incomplete tax refund, it’s crucial to grasp […]
— Read moreThe Internal Revenue Service (IRS) has introduced an enhanced chatbot technology to promptly address basic queries for individuals who have received notifications regarding potential tax underreporting. This new chatbot feature is designed to support taxpayers who have received notices like CP2000, CP2501, and CP3219A. These communications inform taxpayers when the IRS’s tax information from third […]
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