Frequently asked questions about IRAs and employee sponsored retirement plans can be found here. More information about the different types of retirement plans can be found here. A side-by-side comparison of common features of traditional and Roth IRAs can be found here. Information about the type of distributions that can be rolled over, types of plans and IRAs that may accept rollovers and tax consequences can be found here.
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Most pre-retirement payments you receive from a retirement plan or IRA can be “rolled over” by depositing the payment in another retirement plan or IRA within 60 days. You can also have your current financial institution or plan administrator directly transfer the payment to another plan or IRA. Why should you roll over your IRA? When you roll over a retirement plan distribution, you generally don’t pay tax on it until you withdraw it from the new plan. If you don’t roll over your payment, it will be taxable (other than qualified Roth distributions and any amounts already taxed). You
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If tax was owed on April 18, 2016 and a payment of an estimate equal to or greater than the tax owed, penalties and interest will be charged by the IRS. Generally, interest will accrue from the due date of the return until the date the tax is paid in full. The interest rate is set every quarter and is equal to the federal short term interest rate plus 3%. The IRS compound interest daily. If the full amount of tax owed wasn’t paid on April 18th, the IRS will also charge .5% for each month or part of
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If you are looking for a new job in the same line of work, you can deduct the cost of preparing and mailing your resume to prospective employers along with fees paid to placement agencies. If you travel to look for a new job, you may be able to deduct the cost of your trip. The IRS has specific guidelines for deducting business travel expenses and they can be read here. Job search expenses are listed on Schedule A. Reimbursed expenses cannot be deducted. Expenses incurred for looking for a first job or a the first job in a long time cannot
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Taxpayers are required to report income from hobbies on their tax return. There are 3 areas to consider if income is produced from a hobby: 1. First, decide if the activity is a hobby or a business based on the 9 factors below–all 9 factors should be considered –no one factor is decisive: Do you carry on the activity in a businesslike manner? Do you put the time and effort you into the activity to intend to make a profit? Do you depend on income from the activity for your livelihood? If you have losses, are your losses due to
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Taxpayers who filed extensions should complete and file their returns by Monday, October 17th. If you owe taxes, filing on time will help you avoid a potential late filing penalty. If you owe tax money and can’t pay all of your taxes, pay as much as you can to reduce interest and penalties for late payment. The IRS offers installment agreements so taxpayers can pay their bill over time. Interest and penalties will accrue until the tax bill is paid. So, it’s best to pay as much as you can as quickly as you can.
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