Answers To Your Tax Season Questions

Revisor

The IRS announced it will open the 2024 income tax return filing season on January 29. That’s when the tax agency will begin accepting and processing 2023 tax year returns. Here are answers to seven tax season questions we receive at this time of year. 1. What are this year’s deadlines? The filing deadline to submit 2023 returns or file …

The Kiddie Tax Could Affect Your Children Until They’re Young Adults

Revisor

The so-called “kiddie tax” can cause some of a child’s unearned income to be taxed at the parent’s higher marginal federal income tax rates instead of at the usually much lower rates that a child would otherwise pay. For purposes of this federal income tax provision, a “child” can be up to 23 years old. So, the kiddie tax can …

It’s Possible (but not easy) to Claim a Medical Expense Tax Deduction

Revisor

One of your New Year’s resolutions may be to pay more attention to your health. Of course, that may cost you. Can you deduct your out-of-pocket medical costs on your tax return? It depends. Many expenses are tax deductible, but there are several requirements and limitations that make it difficult for many taxpayers to actually claim a deduction. The rules …

Don’t Overlook Taxes When Contemplating a Move to Another State

Revisor

When you retire, you may think about moving to another state — perhaps because the weather is more temperate or because you want to be closer to family members. Don’t forget to factor state and local taxes into the equation. Establishing residency for state tax purposes may be more complex than you think. Pinpoint all applicable taxes It may seem …

Court Awards and Out-of-Court Settlements May (or may not) be Taxed

Revisor

Monetary awards and settlements are often provided for an array of reasons. For example, a person could receive compensatory and punitive damage payments for personal injury, discrimination or harassment. Some of this money is taxed by the federal government, and perhaps by state governments. Hopefully, you’ll never need to know how payments for personal injuries are taxed. But here are …

Four Ideas That May Help Reduce Your 2023 Tax Bill

Revisor

If you’re concerned about your 2023 tax bill, there may still be time to reduce it. Here are four quick strategies that may help you trim your taxes before year end. 1. Accelerate deductions and/or defer income. Certain tax deductions are claimed for the year of payment, such as the mortgage interest deduction. So, if you make your January 2024 payment …

Don’t Forget To Empty Out Your Flexible Spending Account

Revisor

If you have a tax-saving flexible spending account (FSA) with your employer to help pay for health or dependent care expenses, there’s an important date coming up. You may have to use the money in the account by year-end or you’ll lose it (unless your employer has a grace period). As the end of 2023 gets closer, here are some …

Key 2024 Inflation-Adjusted Tax Amounts For Individuals

Revisor

The IRS recently announced various 2024 inflation-adjusted federal tax amounts that affect individual taxpayers. Most of the federal income tax rate bracket thresholds are about 5.4% higher than for 2023. That means that you can generally have about 5.4% more income next year without owing more to the federal government. Standard deduction Here are the inflation-adjusted standard deduction numbers for …

11 Exceptions To The 10% Penalty Tax On Early IRA Withdrawals

Revisor

If you’re facing a serious cash shortfall, one possible solution is to take an early withdrawal from your traditional IRA. That means one before you’ve reached age 59½. For this purpose, traditional IRAs include simplified employee pension (SEP-IRA) and SIMPLE-IRA accounts. Here’s what you need to know about the tax implications, including when the 10% early withdrawal penalty tax might …

Contributing to Your Employer’s 401(k) Plan: How It Works

Revisor

If you’re fortunate to have an employer that offers a 401(k) plan, and you don’t contribute to it, you may wonder if you should participate. In general, it’s a great tax and retirement saving deal! These plans help an employee accumulate a retirement nest egg on a tax-advantaged basis. If you’re thinking about contributing to a plan at work, here …