It’s a presidential election year in the US, but you probably knew that already.A perennial issue each election is taxes.We are subject to many different tax levies.Today we are going to talk about Federal income taxes. The 16th amendment to the Constitution was ratified in 1913, allowing Congress to levy an income tax and the US has had an income tax ever since. The instructions for the very first Form 1040 in 1913 took up one page. In 2019 the instructions for Form 1040 is 108 pages long. I believe every US taxpayer should know their Federal income tax liability.(Hint: Your tax refund is not your tax liability). So dig up your 2019 tax return. (go ahead I’ll wait). If your 2019 return is …
Should you take a coronavirus-related distribution from your retirement plan?
The pandemic drags on. Here in Massachusetts, we are taking mask-wearing seriously. Even the iconic ducklings in Boston’s Public Garden and the giant baby head outside of Boston’s Museum of Fine Arts are wearing them. (Does anyone else think the giant baby head is a little weird?) Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, individuals impacted by coronavirus can access up to $100,000 from their retirement plans with fewer consequences than usual. Recently, the IRS issued new guidance regarding these distributions.Should you take a coronavirus-related distribution from your retirement accounts?The first-and-foremost question is: “Do you need …
What Can We Learn From Abigail Adams About Personal Finance?
Abigail Adams was ahead of her time in many ways.She married John Adams the future 2nd president in 1764. During the early years of their marriage, John was frequently away. At a time when women rarely handled business affairs, Abigail tended the family business, a farm in Quincy, MA (where I live) during his many absences.She hired help, traded livestock, supervised the planting and harvesting, and oversaw construction. She kept track of all the finances, all while personally educating their five children. Writing from the Continental Congress John acknowledged his wife's skill with the joking compliment he had received word that their farm never looked better and was likely to …
The IRS Is Not Calling You For Your Bank Information
The first of the “Economic Impact Payments” were direct deposited into recipient bank accounts this week.These payments are part of the sweeping CARES Act stimulus bill.The amount is $1200 per person, with an additional $500 for each qualifying child. To qualify the child must be under the age of 17. People who are claimed as a dependent on another person’s return are not eligible.The payments are phased out for higher income earners, with the phase out beginning at $75,000 for individuals$112,500 for head of household filers and$150,000 for married couples filing joint returns The IRS will use the information from your 2019 tax return if you have filed it already. If not, they …
Stimulus Bill and Tax Deadline Information
It’s difficult to overstate the impact the global pandemic is having on all of us.Today, I focus on how recent changes to tax due dates and the stimulus bill might affect you.The due date to file and pay your Federal income taxes has been extended to July 15, 2020. Most but not all states have followed suit. Just this morning 3/27/20 Massachusetts announced they would also extend the deadline.Also extended to July 15, 2020: Q1 estimated tax payments for 2020Deadline for 2019 IRA contributions. If you have already filed your 2019 tax return and scheduled payment of tax due via direct debit in April, you can cancel the direct debit and send the payment in July. To cancel …
