November 28th, 2016 by Kim Chen
Although the Required Minimum Distribution (RMD) rules of IRC Sec. 401(a)(9)(A) don’t apply to Roth IRAs during the owner’s life, post-death distributions must be made according to the RMD rules as if the Roth IRA owner died before the required beginning date. The IRS recently addressed whether a nonspouse beneficiary’s failure to begin RMDs within […]
November 22nd, 2016 by Kim Chen
Under IRC Sec. 165(i), a taxpayer may elect to treat a loss attributable to a federally declared disaster as sustained in the taxable year immediately preceding the year in which the disaster occurred. The IRS has issued temporary and proposed regulations (TD 9789) that clarify that a Section 165(i) election is generally due six months […]
November 18th, 2016 by Kim Chen
An individual created an irrevocable trust for the benefit of himself, his daughters, grandchildren, and six other individuals. A corporate trustee, along with the grantor’s daughters and the six other individuals were designated as the distribution committee and, as such, were allowed to distribute as much of the trust income and/or principal as it determined […]
November 12th, 2016 by Kim Chen
The Social Security Administration (SSA) announced that the maximum earnings subject to the Social Security component of the FICA tax will increase from $118,500 to $127,200 for 2017. This means that for 2017, the maximum Social Security tax that employers and employees will each pay is $7,886.40 ($127,200 x 6.2%). A self-employed person with at […]
November 7th, 2016 by Kim Chen
The taxpayer took $33,000 in loans from her retirement plan, but defaulted on the loans. The plan sponsor issued the taxpayer a Form 1099-R reporting the unpaid loan balance as a taxable distribution, which she failed to report on her income tax return. The IRS issued a notice of deficiency of approximately $8,300 for failing […]
October 29th, 2016 by Kim Chen
IRS Notice 2016-48, released on August 4, 2016, outlines the new procedures by the Protecting Americans from Tax Hikes (PATH) Act enacted by Congress in December 2015. An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to individuals who are required to have […]
October 24th, 2016 by Kim Chen
IR-2016-135, Oct. 17, 2016 WASHINGTON –– Hurricane Matthew victims in much of North Carolina and parts of South Carolina, Georgia and Florida have until March 15, 2017, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today. This includes an additional filing extension for those with […]
October 15th, 2016 by Kim Chen
Close-Up on the 60-Day Rule There’s no current federal income tax hit if you properly roll over an IRA distribution into the same IRA, another IRA or an eligible retirement plan, such as a 401(k) plan. For tax-free rollover treatment to apply, you generally must recontribute the amount distributed from the IRA to an IRA […]
October 7th, 2016 by Kim Chen
The federal income tax rules on qualified residence interest have been around for many years, but there’s always a steady flow of disagreements between the IRS and taxpayers on these rules. Here are some background materials and recent developments on qualified residence interest that may affect you. Rules in a Nutshell Unlike most other types […]
October 3rd, 2016 by Kim Chen
In a recent news release, the IRS alerted taxpayers and tax practitioners to an email scam involving fraudulent CP2000 notices for the 2015 tax year. The notices, which are attached to the email and appear to be issued from an Austin, Texas address, relate to the Affordable Care Act (ACA) and request that checks be […]
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