Did you know that if you want to retire from work at 55, there are ways to start taking your 401K and other similar retirement plan proceeds without the early withdrawal penalty? There is a provision in the Internal Revenue Code – §72(t)(2)(A)(v) that allows you to avoid the 10% penalty on retirement plan distributions before age 59 1/2. There are certain rules to qualify: 1. The plan must be an ERISA-qualified, employer-established defined contribution plan, including 401(k)s, 403(b)s, 501(a)s, federal TSP Plans and some other qualified plans. 2. You must leave employment at your company (ether termination, retirement or resignation) during the year you turn 55 or the year after to qualify for the penalty-free distribution. 3. If you have at least twenty years of service as a police officer, firefighter or medic, you can take the penalty-free distributions starting at age 50. If you have at least twenty-five years of service in these professions, you can take the distributions penalty-free at any age. Now remember that IRAs do not qualify for this special treatment. For an IRA, you have to use another area of §72(t) to set up a series of equal periodic payments (SEPP), which is a [...]
Tax Musings of a Burbank CPA: New Lower IRS Mileage Rates for 2014
So the IRS has released the 2014 standard mileage rates, which are: 1. 56 cents a mile for business miles driven. 2. 23.5 cents a mile for medical miles driven. 3. 23.5 cents a mile for moving miles driven. 4. 14 cents a mile for charitable miles driven. It is interesting that the mileage rates for business, medical and moving miles have been reduced half a cent per mile over 2013. The charitable mileage rate has not changed again (for at least 20 years) because the rate is fixed by statute and can only be changed by Congressional law (Congress apparently has better things to do than give away charitable tax writeoffs.) Apparently people in the Government have decided that it is now cheaper to drive a car than a year ago (huh?) So your reduced expenses will offset the lessor tax deduction you will get in 2014 (???). 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 Has been Featured On https://twitter.com/bstonercpa
Tax Musings of a Burbank CPA: More Trouble For Preparers – the 2014 Filing Season!
There are a tremendous group of changes happening for the 2013 tax year (filings in 2014) plus another IRS delay taking time off of filing season (again)! See this post in AccountingToday by Roger Russell for more details: http://www.accountingtoday.com/ato_issues/27_12/Looks-like-trouble-68771-1.html?ET=webcpa:e9667:2498807a:&st=email So try and give your tax preparer a break if things are going slower than you think they should. There always seem to be problems when the Government gets involved! 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 Has been Featured On https://twitter.com/bstonercpa