The Tax Professionals Blog
How to handle multiple 401(k) accounts during tax time
Posted by Lee Reams Sr. on
It is not uncommon for individuals to have multiple employers, each with a 401(k) plan. This can possibly create a situation where the employee makes an excess elective deferred compensation contribution. The maximum annual contribution is $18,000 ($24,000 if age 50 and over).Business Deductions: Credit Card Mixed Interest
Posted by Lee Reams Sr. on
When it comes to credit card debt where a portion of the debt is for personal purchases and part for business, can any part of the interest charged on the debt be deducted as business interest?When is Alimony Non-Taxable?
Posted by Lee Reams Sr. on
IRC Section 71(b)(1) defines the term alimony. The code has four requirements, three of which are commonly recognized by tax professionals: the payments must be in cash (71(b)(1)), taxpayer cannot live together (71(b)(1)(C)) and there is no liability for the payments after the death of the payee spouse (71(b)(1)(D)).
Health Savings Account (HSA) as a Retirement Plan
Posted by Lee Reams Sr. on
Health Savings Accounts (HSAs) are an oft-overlooked stratagem in retirement planning. Individuals with high-deductible health insurance plans can establish an HAS and make tax-deductible contributions to it. Congress created these plans to help individuals pay for medical expenses not covered by insurance. HSAs allow tax-free distributions to pay for unreimbursed medical expenses. Distributions taken that are not used to pay for unreimbursed medical expenses are taxable and subject to a 20% non-qualified distribution penalty. However, the 20% penalty no longer applies after reaching age 65.
Business Use Of Car - Standard Mileage Rate Add-Ons
Posted by Lee Reams Sr. on
Business owners quite often use the standard mileage rate instead of actual expenses when taking a deduction for the business use of their vehicle. The standard mileage rate is determined annually by the IRS using data from a study conducted by an independent contractor of vehicle-operating expenses based on the prior year’s costs.