Alpha’s Tax Tips

Stimulus Checks May Not Be Checks At All

Awaiting a paper stimulus check from the IRS? You may get a prepaid debit card. The IRS previously said that it will start mailing out paper stimulus checks to eligible individuals for whom the agency does not have bank account information. It now says that some of these people will end up receiving prepaid debit […]

New Law Offers Small Biz Relief

The COVID-19 pandemic has had a significant impact on both individuals and businesses of all shapes and sizes. Relief has come in various forms. Alert: The initial law signed by President Trump on March 18 – the Families First Coronavirus Response Act – requires small employers with fewer than 500 employees to provide paid sick […]

New Thresholds For Health Savings Accounts for 2021

The annual ceilings on deductible payments to HSAs are slated to go up in 2021 to $3,600 for account owners with self-only coverage and to $7,200 for those with family coverage. People born before 1967 can put in an additional $1,000. The limits on out-of-pocket costs, such as deductibles and copayments, will increase to $7,000 […]

Generate Current Energy Credits

If you make energy-saving improvements in your home, you may be in line for certain tax breaks. Strategy: Claim the residential renewable energy credit for qualified improvements. The credit is a dollar-for-dollar reduction of your tax bill. Various forms of energy credit have expired, and some were reinstated in recent years, leaving a confusing hodgepodge […]

Be Careful With Your Donation Deductions

A reminder that donations you make to individuals aren’t tax-deductible. A man who sent money to his ill sister treated the payments as charitable write-offs. The Tax Court ended up nixing the deduction (Serrano, TC Summ. Op. 2020-15). Ditto for donations you make through personal fundraising websites that are earmarked for a single person or […]

Let’s Talk Capital Gains!

Let’s talk about the taxation of capital gains. Long-term capital gains get favorable rates. Profits from the sale or exchange of capital assets held for over a year are generally taxed at 0%, 15% or 20%. The rates are based on set income thresholds adjusted annually for inflation. For 2020, the 0% rate applies to […]

Convert Your Traditional IRA to a Roth? Now May Be a Good Time.

Want to convert a traditional IRA to a Roth? Now might be a good time to consider it. You’ll have to pay income tax on the converted funds for the year of the switch, but once the money is in the Roth IRA, future earnings and distributions that you take from the account are tax-free. […]

5 Tax Tips for Gig Economy

According to recent data from the Federal Reserve, nearly one out of every three Americans is involved in the gig economy (aka “sharing economy”). Strategy: Find out about the tax consequences. Workers in the gig economy have tax obligations and opportunities like those of other self-employed individuals. Notably, you must pay taxes on your earnings, […]

The Secure Act Brings Bevy of Changes

The Holiday season brought a multitude of changes to retirement planning, with President Trump signing the Setting Every Community Up for Retirement Enhancement Act into law in December. Here are some of the most notable ways the Secure Act affects retirement savings so you can start adjusting your retirement strategy. (Unless noted, all changes apply […]

Withhold on RMD to Simplify Paying Taxes

For many retirees, paying taxes isn’t a one-time-a-year task. Instead, many must pay estimated taxes four times a year. The first quarterly payment is due in April, the same day as your tax return for the prior year. If you’re still working, you probably don’t need Form 1040-ES, which you use to figure estimated taxes. […]