Watch out for “income in respect of a decedent” issues when receiving an inheritance

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Watch out for “income in respect of a decedent” issues when receiving an inheritance

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April 23, 2024 ,

IRD inheritance

Most people are genuinely appreciative of inheritances, and who wouldn’t enjoy some unexpected money? But in some cases, it may turn out to be too good to be true. While most inherited property is tax-free to the recipient, this isn’t always the case with property that’s considered income in respect of a decedent (IRD). If you have large balances in an IRA or other retirement account — or inherit such assets — IRD may be a significant estate planning issue.

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The pros and cons of turning your home into a rental

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April 16, 2024

home rental

If you’re buying a new home, you may have thought about keeping your current home and renting it out. In March, average rents for one- and two-bedroom residences were $1,487 and $1,847, respectively, according to the latest Zumper National Rent Report.
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Keep these 3 issues in mind after you file your return

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April 13, 2024 ,

return filing issues

The tax filing deadline for 2023 tax returns is April 15 this year. If you need more time, you can file for an extension until October 15. In either case, once your 2023 tax return has been successfully filed with the IRS, there may still be some issues to bear in mind. Here are three considerations.

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The tax deadline is almost here: File for an extension if you’re not ready

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April 3, 2024 , , ,

tax filing deadline extension

The April 15 tax filing deadline is right around the corner. However, you might not be ready to file. Sometimes, it’s not possible to gather your tax information by the due date. If you need more time, you should file for an extension on Form 4868.
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Update on retirement account required minimum distributions

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March 26, 2024 , , ,

RMD

If you have a tax-favored retirement account, including a traditional IRA, you’ll become exposed to the federal income tax required minimum distribution (RMD) rules after reaching a certain age. If you inherit a tax-favored retirement account, including a traditional or Roth IRA, you’ll also have to deal with these rules.
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How renting out a vacation property will affect your taxes

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March 19, 2024 ,

vacation rental tax

Are you dreaming of buying a vacation beach home, lakefront cottage or ski chalet? Or perhaps you’re fortunate enough to already own a vacation home. In either case, you may wonder about the tax implications of renting it out for part of the year.

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Beware of a stealth tax on Social Security benefits

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March 13, 2024 ,

stealth tax

Some people mistakenly believe that Social Security benefits are always free from federal income tax. Unfortunately, that’s often not the case. In fact, depending on how much overall income you have, up to 85% of your benefits could be hit with federal income tax.
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A job loss is bad but the tax implications could make it worse

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March 5, 2024 , ,

layoff

Unemployment has been holding steady recently at 3.7%. But there are still some people losing their jobs — particularly in certain industries including technology and media. If you’re laid off or terminated from employment, taxes are likely the last thing on your mind. However, there are tax implications due to your altered employment circumstances.
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New option for unused funds in a 529 college savings plan

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February 27, 2024 ,

529 unused funds

With the high cost of college, many parents begin saving with 529 plans when their children are babies. Contributions to these plans aren’t tax deductible, but they grow tax deferred. Earnings used to pay qualified education expenses can be withdrawn tax-free. However, earnings used for other purposes may be subject to income tax plus a 10% penalty.
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If you didn’t contribute to an IRA last year, there’s still time

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February 20, 2024 , ,

IRA Contribution

If you’re gathering documents to file your 2023 tax return and you’re concerned that your tax bill may be higher than you’d like, there might still be an opportunity to lower it. If you qualify, you can make a deductible contribution to a traditional IRA right up until the April 15, 2024, filing date and benefit from the tax savings on your 2023 return.

Continue Reading: If you didn’t contribute to an IRA last year, there’s still time