Here is the answer to this frequently asked question (drumroll please): Maybe! The IRS has posted a tip sheet showing the steps you have to do to find out if you may need to pay some tax on your benefits: http://content.govdelivery.com/accounts/USIRS/bulletins/a770e0?reqfrom=share Remember something that the IRS doesn’t discuss: any good tax software today has an automatic calculation of whether part of the benefits are taxable, so if you use TurboTax or have a paid preparer you shouldn’t have to worry about it. Just keep in mind that this can be an issue. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa
Musings of a Burbank CPA: House Ways and Means Chairman Camp Releases Tax Reform Proposal
Well the long awaited (?) House Committee Tax Reform has been released. See this posting by Roger Russell for all the exciting details: http://www.accountingtoday.com/news/House-Ways-Means-Chairman-Camp-Releases-Tax-Reform-Proposal-69802-1.html?utm_campaign=daily-feb%2027%202014&utm_medium=email&utm_source=newsletter Remember this is really only the very first step in any kind of significant tax reform. It is a long way from this to actually reforming the tax code. It should be interesting to see how all this really shakes out; in the final analysis, will anything, even a supposed bipartisan tax reform proposal, actually get to the President’s desk through Congress the way it is structured now. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Android and the IPhone: Has been Featured On https://twitter.com/bstonercpa
Burbank CPA Tax Musings: Do You Owe Tax on Your Roth IRA Withdrawals?
You took money out of your Roth IRA last year, thinking it was tax free (isn’t the selling point of a Roth IRA tax free withdrawals in exchange for giving up an up-front tax deduction?) Not so fast, my friend! (I always wanted to say that.) There are some situations where you may still owe both tax and penalties unless you follow the rules. See this article in MarketWatch from the Wall Street Journal by Bill Bischoff for more details: http://www.marketwatch.com/story/taxes-on-roth-ira-withdrawals-2014-02-25 Remember by giving up the tax deduction now, instead of deferred taxation of all the earnings like in a traditional IRA you get tax free earnings, but you have to keep the earnings in the Roth IRA for five years or until you turn 59 1/2, whichever is later. If you take your earnings earlier then that there can be taxes and/or early distribution penalties on them. Make sure you know the rules and apply them to your situation before you take any money out. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Download my business app for Android and the IPhone: Has been [...]