News Archives - MJW EA & Company LLC

February 12, 2020 Leave a Comment

One More Kick-Off

The Superbowl’s over but Tax Season has already kicked off and as we return the punt with our eyes on the end zone, here are some calls we’d like to make:

Holding: If you’re only missing one or two tax documents, bring in what you have. We can certainly get your return mostly done and then hold it until you get the final pieces.

Please know:

The 1099-Gs for Unemployment Compensation received from the state are only available online. Click here to access your form.
Some investment companies have a 1099-Consolidated form from an investment account available online and possibly only online unless you specifically requested paper copies. Log into your investment account to access these forms.
A 1098-T for tuition paid is now required to claim education credit. Most schools have this form available through the student’s portal, and for some schools, this is the only way to get them.
Estimated tax payments are important. Please provide back up showing when and what you paid for estimates for 2019.

Pass Interference: There was a typo in one of our documents and we wanted to remind everyone that we do NOT need copies of your documents. Bring us your originals and we will give them back to you with your completed return, no muss, no fuss.

Delay of Game: If you have not received your refund after 21 days of your filing, click here for Federal and here for CT to check the “Where’s My Refund?” status with the taxing agencies. You must have your tax return information with you when searching. If you call us to check, this is the first place we’re going to look, so if you try it and run into trouble then call us for the assist.

The Direct Deposit/Direct Debit form that was in your packet (the blue one) needs to be completely filled out in order for us to finish processing your return. This means that you’ve picked “yes” or “no” for both the deposit and the debit section, you’ve provided your bank information or a cancelled check and you’ve signed it.

Our ruling on the field stands: We are always here to help, so call or email (or text 203.859.4317) with any questions you may have.

Break!

December 30, 2019 Leave a Comment

Go Go Government Extenders!

Yet another year end tax bill signed by the President on December 20, 2019. This provides full-year government funding through September 30, 2019.

Significant Retirement Plan Changes

The bill increases the age for required minimum distributions (RMD)from individual retirement accounts to 72 (from 70½). This applies to distributions required to be made after December 31, 2019, with respect to individuals who attain age 70 ½ after such date.
It would allow part-time workers to participate in 401(k) plans.
It eliminates the so-called “stretch IRA”which allowed beneficiaries of IRAs and qualified plans to withdraw all money from inherited accounts over their lifetime, but now, distributions must be taken within ten years.
It allows new parents to take early distributions from a 401(k), IRA or another qualified retirement plan within a year after a birth or adoption without incurring early withdrawal penalties (limited to $5,000).
No age limit on IRA contributions although taxpayers may still be subject to other limitations (earned income and coverage by another retirement plan).

Other Sections of Note:

The new kiddie tax included in the Tax Cuts and Jobs Act is repealed (old kiddie tax law is still in place).
Qualified Expenses for Section 529 Plan distributions is the repayment of an education loan up to $10,000 maximum. Tracking of the expenses will be important.

Extenders through 2020 (retroactive to January 1, 2018)

Excludes from gross income the discharge of qualified principal residence indebtedness income.
The medical base remains at 7.5% instead of 10%.
Deduction for mortgage insurance premiums as qualified residence interest.
Deduction for tuition and related expenses.
Non-business Energy Property Credit (i.e., insulation, storm windows, etc.)

MJW Editorial Comment: Although some of these extenders may help some taxpayers, and there are many, many more not listed above, we feel Congress and the President acted irresponsibly in retroactively extending many of the “extenders.” But this is not to say that there aren’t some beneficial changes with the “Further Consolidated Appropriations Act of 2020”. The purpose of many of these “extenders” is to give taxpayers a tax incentive to do something. Our concern is that by reinstating extenders retroactively to January 1, 2018, it doesn’t seem like a great way to “incentivize” anyone to do something in 2018 or most of 2019. It gives the illusion of providing tax benefits without the ability for taxpayers to take action of “tax breaks.”

December 16, 2019 Leave a Comment

Fourth Quarter Estimated Taxes

As the Fourth Quarter of 2019 winds to a close, we wanted to remind you that estimated taxes are due on or before January 15, 2020.

If you are required to pay estimates, we prepared and included pre-addressed envelopes and vouchers with the amounts due in the tax return packet we provided

If we keep your envelopes and vouchers here in our office, please make sure you come in with your checks prior to the due date so we can mail your estimates out before the deadline.

You also have the option to use EFTPS or IRS directPay for Federal estimated tax payments and TSC for the State.

Click here to be brought to the Federal site.

Click here to make CT online payments.

Federal estimates should be sent to:

Internal Revenue Service

P.O. Box 37007

Hartford, CT 06176-0007

CT Estimates should be sent to:

Department of Revenue Services

P.O. Box 5053

Hartford, CT 06102-5053

As always, we are here to answer any questions you may have.

November 20, 2019 Leave a Comment

Today on As the Sun Shines:

On a bright, shiny day do you ever gaze longingly at your roof and think, “Wow, I wish I could go solar and take advantage of that. Think about it, Marsha – we’d be living off the Sun’s limitless supply of energy. We wouldn’t have to keep feeding Big Electric. We could cut the cord! We’d be living off the land! We – “

“I don’t think using solar energy to power the tv counts as living off the land, John.”

“Doesn’t it? Think of the benefits – we can save all the money we spend on electricity and put it towards our retirement. I think we might actually get a tax deduction for installing solar equipment. Hey, we should call our tax woman about the solar thing. And retirement. It’s going to be great, Marsha, you’ll see.”

“Oh, John!”

“Marsha.”

Want to go solar, save the planet and get a tax break? Here’s what you need to know:

You have to own your home and the solar panels installed. You also have to have enough of a Federal Tax liability to qualify to take the deduction. Even if you don’t have enough tax liability to claim the entire credit in one year, you can “roll over” the remaining credits into future years for as long as the tax credit is in effect.

Most importantly: Your residential solar equipment has to be installed and up and running by December 31^st, 2019 in order to take advantage of the tax option to deduct 30% of the cost of the system. Even if you miss the December 31^st, 2019 deadline, you can still take the deduction in following years, just at a reduced percentage (see table below):

2019: This is the last year the tax credit remains at 30% of the cost of the system.
2020: Owners of new residential solar can deduct 26% of the cost of the system from their taxes.
2021: Owners of new residential solar can deduct 22% of the cost of the system from their taxes.
2022 onwards: There is no federal credit for residential solar energy systems.

So if you’re the type of person who wants to save money and the planet and watch your meter do that thing where it runs backwards, check out your solar options. But beware: Vendors of solar equipment do not always have the correct information; sometimes, they might unwittingly provide you with qualifications for the solar credit for business owners and not the individual. Also, a conscientious solar vendor will tell you up front that unless they’ve begun the work in September at the latest, there’s no way you’ll be up in running by the year-end deadline. This deduction is available to individuals and businesses, although different specifications apply.

When in doubt, we are here to help!

To find out what happens to John and Marsha, click here.

November 19, 2019 Leave a Comment

“What’s all this I hear about Armdys? Is it a new burger place?”

“No, it means ‘Raisin Made Dates.’”

“Well, that doesn’t make any sense – isn’t a raisin already a date?”

“Wow.”

Ever been part of a conversation like that and wanted to burst in with what’s really going on?

Not Armdys, not Raisin Made Dates (I mean really) – RMDs. Required Minimum Distributions.

For those of you lucky to have a retirement account AND be 70 ½ years old, here’s the over/under on RMDs:

RMDs must typically be taken by December 31 each year; except for the year in which you turn 70 ½.
When you turn 70 ½, you have until April 1 of the next year.
The effective deadline for 2019 RMD first-timers is coming up fast. Tuesday, March 31 is the deadline.

To clarify: if you turned 70 ½ in 2019, you must take your Required Minimum Distribution (RMD) by March 31^st, 2020.

If your financial advisor has not contacted you via email or regular mail, we recommend you reach out to him/her to ensure your proper RMD has been calculated.

Did you receive a form 5498? Look at Box 11 to see if an RMD is due.

Fun Facts:

The RMD rules apply to traditional IRAs, most 401(k)s and other qualified retirement plans. The rules don’t apply to Roths, unless:
- If you are the beneficiary who inherits a Roth IRAs, you must take an RMD
RMD amounts are based on an IRS formula driven by the account owner’s life expectancy; the RMD is calculated by dividing the year-end account total by the number of years you’re expected to live.
If you have multiple accounts, you need to calculate the RMD for each IRA separately. But you can aggregate the amounts owed and make the withdrawals from whatever accounts you like.
If you have other qualified plans – such as 401(k)s – those must be calculated and paid out separately from those accounts.
If you have an inherited (or beneficiary) account, that RMD must be satisfied separately, too.
Although most investors take the smallest RMD possible, there’s no limit on how much you can withdraw without penalty after you reach age 59 ½.
RMDs can be taken in a single lump sum, or through a series of timed distributions throughout the year.

And finally, pay attention to this one because this is a most excellent planning opportunity:

If you are 70 ½ or older you can satisfy your RMD (required minimum distribution) from IRA retirement accounts by making a qualified charitable distribution (a QCD) directly to the charity from your IRA. (This has the potential to affect how much Social Security is taxed and how much you will pay for Medicare B and D) and presents the opportunity to reduce Federal and State tax liabilities.

Whoa.

We are happy to help with any planning or questions you may have. We cannot help with trying to explain that raisins are not dates, though. You’re on your own.

One More Kick-Off

Go Go Government Extenders!

Fourth Quarter Estimated Taxes

Today on As the Sun Shines:

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