Friday, February 27, 2015

Key Points To Know About Early Retirement Distributions

Some people take an early withdrawal from their IRA or retirement plan. Doing so in many cases triggers an added tax on top of the income tax you may have to pay.

Here are some key points you should know about taking an early distribution:

1.Early Withdrawals.  An early withdrawal normally means taking the money out of your retirement plan before you reach age 59½.

2.Additional Tax.  If you took an early withdrawal from a plan last year, you must report it to the IRS. You may have to pay income tax on the amount you took out. If it was an early withdrawal, you may have to pay an added 10 percent tax.

3.Nontaxable Withdrawals.  The added 10 percent tax does not apply to nontaxable withdrawals. They include withdrawals of your cost to participate in the plan. Your cost includes contributions that you paid tax on before you put them into the plan.

A rollover is a type of nontaxable withdrawal. A rollover occurs when you take cash or other assets from one plan and contribute the amount to another plan. You normally have 60 days to complete a rollover to make it tax-free.

4.Check Exceptions.  There are many exceptions to the additional 10 percent tax. Some of the rules for retirement plans are different from the rules for IRAs. See IRS.gov for details about these rules.

5.File Form 5329.  If you made an early withdrawal last year, you may need to file a form with your federal tax return. See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, for details.

6.Use IRS e-file. Early withdrawal rules can be complex. IRS e-file is easiest and most accurate way to file your tax return. The tax software that you use to e-file will pick the right tax forms, do the math and help you get the tax benefits you’re due. Don’t forget that with IRS Free File, you can e-file for free. Free File is only available through the IRS website at IRS.gov/freefile.

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Thursday, February 26, 2015

How To Determine If The Net Investment Income Tax Applies To You

If you have income from investments, you may be subject to the Net Investment Income Tax. 


You may owe this tax if you receive investment income and your income for the year is more than certain limits. Here are some key tips you should know about this tax:

• Net Investment Income Tax.  The law requires a tax of 3.8 percent on the lesser of either your net investment income or the amount by which your modified adjusted gross income exceeds a threshold amount based on your filing status.

• Income threshold amounts.  You may owe this tax if your modified adjusted gross income is more than the following amount for your filing status:

Filing Status
Threshold Amount
Single or Head of household
$200,000
Married filing jointly            
$250,000
Married filing separately    
$125,000
Qualifying widow(er) with a child
$250,000

• Net investment income.  This amount generally includes income such as:
o Interest,
o Dividends,
o Capital gains,
o Rental and royalty income, and
o Non-qualified annuities.

This list is not all-inclusive. Net investment income normally does not include wages and most self-employment income. It does not include unemployment compensation, Social Security benefits or alimony. It also does not include any gain from the sale of your main home that you exclude from your income.

Refer to Form 8960, Net Investment Income Tax, to see if this tax applies to you. You can check the form’s instructions for the details on how to figure the tax.

• How to report.  If you owe the tax, you must file Form 8960 with your federal tax return. If you had too little tax withheld or did not pay enough estimated taxes, you may have to pay an estimated tax penalty.


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Wednesday, February 25, 2015

Top Six Things You Should Know about the Child Tax Credit

 

The Child Tax Credit may save you money at tax-time if you have a qualified child. Here are six things you should know about the credit.



1. Amount.  The Child Tax Credit may help reduce your federal income tax by up to $1,000 for each qualifying child that you are eligible to claim on your tax return.

2. Additional Child Tax Credit.  If you qualify and get less than the full Child Tax Credit, you could receive a refund even if you owe no tax with the Additional Child Tax Credit.

3. Qualifications.  For this credit, a qualifying child must pass several tests:

• Age test.  The child must have been under age 17 at the end of 2014.

• Relationship test.  The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. The child may be a descendant of any of these individuals. A qualifying child could also include your grandchild, niece or nephew. You would always treat an adopted child as your own child. An adopted child includes a child lawfully placed with you for legal adoption.

• Support test.  The child must not have provided more than half of their own support for the year.

• Dependent test.  The child must be a dependent that you claim on your federal tax return.

• Joint return test.  The child cannot file a joint return for the year, unless the only reason they are filing is to claim a refund.

• Citizenship test.  The child must be a U.S. citizen, a U.S. national or a U.S. resident alien.

• Residence test.  In most cases, the child must have lived with you for more than half of 2014.

4. Limitations.  The Child Tax Credit is subject to income limitations. The limits may reduce or eliminate your credit depending on your filing status and income.

5. Schedule 8812.  If you qualify to claim the Child Tax Credit, make sure to check whether you must complete and attach Schedule 8812, Child Tax Credit, with your tax return. For example, if you claim a credit for a child with an Individual Taxpayer Identification Number, you must complete Part I of Schedule 8812. If you qualify to claim the Additional Child Tax Credit, you must complete and attach Schedule 8812. Visit IRS.gov to view, download or print IRS tax forms anytime.

6. IRS E-file.  Electronic filing is the best way to file your tax return. IRS E-file is the safe, accurate and easiest way to file. If you use IRS Free File, you can prepare and e-file your taxes for free. Go to IRS.gov/filing and review your options.

You can use the Interactive Tax Assistant tool on IRS.gov to see if you can claim the credit.

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Don't Ask A Bear Into Your Home To Lightly Dust Just The Dinning Room Table

Net Neutrality Is The Reason.  FCC/Obama Regime/Federal Government Is The Bear.


Or, how leftist totalitarians seek to take over the internet, free speech, political speech, stifle innovation, increase costs, and reduce the quality and speed of your internet service.

In addition to doing all the above bad things to the internet and internet companies, the Obama minions at the FCC are about to tailor the internet industry to protect giant corporations with lots of money for litigation against competition from new small innovative companies and technologies.   Just like they did in the past for AT&T - Ma Bell monopolies over land line phone service.

I see the idiots at the EFF (Electronic Frontier Foundation) are beginning to their great moronic surprise to understand that inviting a bear into your home to do some
light dusting of your dining room table can have disastrous consequences.


Eventually given much more time and remedial education perhaps the
idiots at techdirt will begin to awaken, but certainly not in time to keep the bear out of the house.
  
Here is the nub of the matter:

By choosing to regulate Internet providers as old-fashioned public utilities in order to enforce "neutrality" mandates, the commission will discourage private-sector investment and innovation for many years to come, if only as a result of the litigation that will be spawned and the uncertainty that will be created. And the new government mandates inevitably will lead to even more than the usual special interest pleading at the FCC, as Internet companies try to advantage themselves and disadvantage their competitors by seeking favored regulatory treatment.  From all indications, the FCC contemplates that the new rules will be sufficiently burdensome and costly and sufficiently ambiguous that affected parties will be invited to seek exemptions from the new mandates through "waiver" requests or other administrative
mechanisms.  


Finally, my thoughts on why a lot of computer jocks I meet seem to love liberal totalitarian/authoritative government.  

Computer techies seem to gravitate towards totalitarian and authoritative regimes perhaps because that is always their preferred method of operating a network of computers.  They just aren't smart enough to understand the problems to people (which includes businesses afterall as they are just people) of trying to rule people
like a network of machines.  This is why they are often so slow to see the problems associated with calling in the bear to keep one's house clean.

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Tuesday, February 24, 2015

Ten Facts That You Should Know about Capital Gains and Losses

When you sell a capital asset the sale results in a capital gain or loss. A capital asset includes most property you own for personal use or own as an investment.


Here are 10 facts that you should know about capital gains and losses:

1. Capital Assets.  Capital assets include property such as your home or car, as well as investment property, such as stocks and bonds.

2. Gains and Losses.  A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usually what you paid for the asset.

3. Net Investment Income Tax.  You must include all capital gains in your income and you may be subject to the Net Investment Income Tax. This tax applies to certain net investment income of individuals, estates and trusts that have income above statutory threshold amounts. The rate of this tax is 3.8 percent. For details visit IRS.gov.

4. Deductible Losses.  You can deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of property that you hold for personal use.

5. Long and Short Term.  Capital gains and losses are either long-term or short-term, depending on how long you held the property. If you held the property for more than one year, your gain or loss is long-term. If you held it one year or less, the gain or loss is short-term.

6. Net Capital Gain.  If your long-term gains are more than your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a net capital gain. 

7. Tax Rate.  The capital gains tax rate usually depends on your income. The maximum net capital gain tax rate is 20 percent. However, for most taxpayers a zero or 15 percent rate will apply. A 25 or 28 percent tax rate can also apply to certain types of net capital gains.  

8. Limit on Losses.  If your capital losses are more than your capital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

9. Carryover Losses.  If your total net capital loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year’s tax return. You will treat those losses as if they happened in that next year.

10. Forms to File.  You often will need to file Form 8949, Sales and Other Dispositions of Capital Assets, with your federal tax return to report your gains and losses. You also need to file Schedule D, Capital Gains and Losses with your tax return.

For more information about this topic, see the Schedule D instructions and Publication 550, Investment Income and Expenses. You can visit IRS.gov to view, download or print any tax product you need right away.

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Monday, February 23, 2015

What If Texas Was Not Legally Made A State Of The United States - A Texan Can Dream Can't He !!

This is very interesting from a legal theory point of view, and very interesting for Texans if the below analysis could result in the return of the, free from federal government chains, Republic of Texas.

The below legal analysis points out that when Texas and Hawaii were annexed into the USA that congress was unable to muster the required super majority vote for treaty approval as was done for all other acquisitions of territory (i.e. like the Louisiana Purchase).  So congress used a Harry Reid Obamacare type trick and merely approved the acquisition by joint resolution which doesn't require the super majority vote required for treaty approval.

The legal point being argued is that the annexation of both Texas and Hawaii into the USA was unconstitutional because according to this analysis congress and the feds are only empowered to approve acquisitions of territory by exercise of the treaty power.  Therefore, if the analysis were upheld, then Texas would not be a state of the USA and would still be the free from federal shackles Republic Of Texas !! Imagine Texas free from the idiotic federal laws and taxes solely its own country with total self-government from the state level !!

Full article at the Washington Post.


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Small Technology Firms and Innovators, America's Largest Seed Fund is Coming to a City Near You

The SBIR Road Tour is a national outreach effort to convey the non-dilutive technology funding opportunity provided through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Over the course of this year individual program managers from the 11 participating agencies representing $2.5 billion in early stage funding will embark on a 20 state road tour, participating in a series of events alongside technology entrepreneurs and innovation supporters from across the United States.
 
If you’re an innovator, entrepreneur, researcher, or small technology firm, don’t miss this opportunity. Every SBIR Road Tour stop provides an in-depth understanding of agency technology funding priorities, and one-on-one meetings with high level decision makers. 


Register TODAY!
South East Tour – March 24 – 27, 2015
Louisville, KY - Tuesday, March 24, 2015
Nashville, TN - Wednesday, March 25, 2015
Atlanta, GA - Thursday, March 26, 2015
Columbia, SC - Friday, March 27, 2015


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Taxable or Not – What Kind Of Things Are Taxable Income

The basic axiom (sadly) is that everything is federal taxable income, from whatever source derived, unless there is a federal statute that specifically says it is not taxable income, and nothing (again sadly) is a deduction unless there is a federal statute that specifically says it is a deduction.

Here are some basic rules you should know to help you file an accurate tax return:
  • Taxed income.  Taxable income includes money you earn, like wages and tips. It also includes bartering, an exchange of property or services. The fair market value of property or services received is taxable.
Some types of income are not taxable except under certain conditions, including:
  • Life insurance.  Proceeds paid to you because of the death of the insured person are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that you get that is more than the cost of the policy is taxable.
  • Qualified scholarship.  In most cases, income from this type of scholarship is not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable. On the other hand, amounts you use for room and board are taxable.
  • State income tax refund.  If you got a state or local income tax refund, the amount may be taxable. You should have received a 2014 Form 1099-G from the agency that made the payment to you. If you didn’t get it by mail, the agency may have provided the form electronically. Contact them to find out how to get the form. Report any taxable refund you got even if you did not receive Form 1099-G.
Here are some types of income that are usually not taxable:
  • Gifts and inheritances
  • Child support payments
  • Welfare benefits
  • Damage awards for physical injury or sickness
  • Cash rebates from a dealer or manufacturer for an item you buy
  • Reimbursements for qualified adoption expenses
For more on this topic see Publication 525, Taxable and Nontaxable Income. You can get it on IRS.gov/forms anytime.
If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.

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Thursday, February 19, 2015

What You Should Know If You Changed Your Name

Did you change your name last year? 


If you did, it can affect your taxes. All the names on your tax return must match Social Security Administration records. A name mismatch can delay your refund.

Here’s what you should know if you changed your name:

• Report Name Changes.  Did you get married and are now using your new spouse’s last name or hyphenated your last name? Did you divorce and go back to using your former last name? In either case, you should notify the SSA of your name change. That way, your new name on your IRS records will match up with your SSA records.

• Dependent Name Change.  Notify the SSA if your dependent had a name change. For example, this could apply if you adopted a child and the child’s last name changed.       

If you adopted a child who does not have a SSN, you may use an Adoption Taxpayer Identification Number on your tax return. An ATIN is a temporary number. You can apply for an ATIN by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, with the IRS. You can visit IRS.gov to view, download, print or order the form at any time.

• Get a New Card.  File Form SS-5, Application for a Social Security Card, to notify SSA of your name change. You can get the form on SSA.gov or call 800-772-1213 to order it. Your new card will show your new name with the same SSN you had before.

• Report Changes in Circumstances in 2015.  If you purchase health insurance coverage through the Health Insurance Marketplace you may get advance payments of the premium tax credit in 2015. If you do, be sure to report changes in circumstances, such as a name change, a new address and a change in your income or family size to your Marketplace throughout the year. Reporting changes will help make sure that you get the proper type and amount of financial assistance and will help you avoid getting too much or too little in advance.



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