Now that your taxes have been completed for 2016, you are probably wondering which old tax records can be discarded. If you are like most taxpayers, you have records from years ago that you are afraid to throw away. It would be helpful to understand why the records must be kept in the first place.
This question frequently arises: Who controls the funds in a Section 529 plan? These accounts can become quite large, as they are limited only by the projected cost of a college education, and those costs will vary between state plans. Some states base their maximums on the cost of an in-state, four-year education, but others use the cost of the most expensive schools in the U.S.—including graduate studies. Most have limits in excess of $200,000, and some can reach $475,000 or more. Thus, it is only natural that those who fund an account would be concerned about who controls the account’s distributions. This is especially true when grandparents or others are making contributions to an account that is limited only by gift-tax considerations.
Each year at this time, the IRS publishes its list of the “dirty dozen” tax scams. Among the dirty dozen are groups that masquerade as charitable organizations to attract donations from unsuspecting contributors. Before you write a check, be aware that fraudsters are out there soliciting on behalf of fake charities and that some so-called charities aren’t entirely honest about how they use contributions.
Just a reminder to those who have not yet filed their 2016 tax return that April 18, 2017 is the tax filing deadline. So, you either need to file your return and pay any taxes owed, or file for the automatic six-month extension and pay the tax you estimate to be due. The due date is normally April 15, but the 15th falls on a weekend and the next business day, April 17, is Emancipation Day, a legal holiday in Washington D.C., so the due date in 2017 is April 18.
Since it’s always best to be well-prepared when it comes to taxes, here are some of the new changes that you should be aware-of. As with anything to do with the government or taxes–if you really want to stay-top of this information, meet with your tax advisor and frequently check on IRS.gov.
Most taxpayers don’t intentionally incur tax penalties, but many who are penalized are simply not aware of the penalties or the impact they can have on their wallet. As tax season approaches, we should take a look at some of the more commonly encountered penalties and how they may be avoided.
With 2017 just around the corner, it is time to think about those last-minute year-end tax moves you can take to improve your tax situation for 2016. Year-end tax planning is probably something you will want to deal with before the holiday season crush arrives.
If you are considering converting your home to a rental, there are a number of tax issues you need to consider before making a final decision.
There is always a temptation to sell off assets that you’ve accumulated and take the money. However, that usually results in a tax bill. There may be a way to profit more from those assets by giving them away.