Wednesday, October 25, 2017

Gifts to Charity: Six Facts About Written Acknowledgements




 

















Throughout the year, many taxpayers contribute money or gifts to qualified organizations eligible to receive tax-deductible charitable contributions. Taxpayers who plan to claim a charitable deduction on their tax return must do two things:

  • Have a bank record or written communication from a charity for any monetary contributions.
  • Get a written acknowledgment from the charity for any single donation of $250 or more.

Here are six things for taxpayers to remember about these donations and written acknowledgements:
  • Taxpayers who make single donations of $250 or more to a charity must have one of the following:A separate acknowledgment from the organization for each donation of $250 or more.One acknowledgment from the organization listing the amount and date of each contribution of $250 or more.
  • The $250 threshold doesn’t mean a taxpayer adds up separate contributions of less than $250 throughout the year.
    • For example, if someone gave a $25 offering to their church each week, they don’t need an acknowledgement from the church, even though their contributions for the year are more than $250.
  • Contributions made by payroll deduction are treated as separate contributions for each pay period.
  • If a taxpayer makes a payment that is partly for goods and services, their deductible contribution is the amount of the payment that is more than the value of those goods and services.
  • A taxpayer must get the acknowledgement on or before the earlier of these two dates:
    • The date they file their return for the year in which they make the contribution.
    • The due date, including extensions, for filing the return.
  • If the acknowledgment doesn't show the date of the contribution, the taxpayers must also have a bank record or receipt that does show the date.




Source:Internal Revenue Service





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Monday, October 23, 2017

IRS Announces 2018 Pension Plan Limitations; 401(k) Contribution Limit Increases to $18,500 for 2018

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IRS Announces 2018 Pension Plan Limitations; 401(k) Contribution Limit Increases to $18,500 for 2018

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,000 to $18,500.
The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the saver’s credit all increased for 2018.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income.


Source:Internal Revenue Service





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Friday, October 6, 2017

How to Apply for Medicare

 How to Apply for Medicare

What help is available?

Medicare is the federal health insurance program for people
  • Age 65 or older
  • Under 65 with certain disabilities
  • Any age with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant).

Medicare has four parts:

  • Part A is hospital insurance.
  • Part B is medical insurance.
  • Part C Medical Advantage Plans are a private insurance option for covering hospital and medical costs.
  • Part D covers prescription medications.
Medicare is managed by the Centers for Medicare & Medicaid Services (CMS). The Social Security Administration works with CMS by enrolling people in Medicare.

Am I eligible?

How do I apply?

There are several ways to enroll in Medicare:

How do I check the status of my application?

How do I complain?

How do I report fraud?

Who do I contact for extra help?

For questions about billing or for other information, contact Medicare by phone or mail.

Is there anything else I need to know?

Medicare Prescription Drug Coverage (Part D)

Part D of Medicare is an insurance coverage plan for prescription medication. Learn about the costs for Medicare drug coverage.

Eligibility

Prescription drug coverage (Medicare Part D) is available to anyone with Medicare.  

How to Apply

There are two ways to get Medicare drug coverage:
  • Add a Medicare Prescription Drug Plan (Part D) to your Medicare approved insurance policy.
  • Get a Medicare Advantage Plan (Part C) such as an HMO or PPO that offers Medicare prescription drug coverage.

When You Can Apply or Change Your Plan

Voluntary Termination of Medicare Part B


Source: usa.gov





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Thursday, October 5, 2017

Phasing out the myRA program

Phasing out the myRA program


What’s happening?
The U.S. Department of the Treasury has decided to phase out the myRA® retirement savings program, and the program is no longer accepting new enrollments. Existing accounts can remain open until further notice.
 
 
 
What is happening to my account?
Your account remains open and you can continue to manage your account until further notice. The funds in your account remain in an investment issued by the U.S. Department of the Treasury. We’ll be in touch over the coming weeks with next steps and relevant deadlines regarding the transfer or closure of your account. In the meantime, we want you to know any myRA with a zero ($0) balance as of September 15, 2017 or later, will be subject to possible automatic closure beginning on September 18, 2017.
Is my money safe?
Yes. The funds in your account are safe and remain in an investment issued by the U.S. Department of the Treasury.
What do I need to do?
We will be reaching out to all of our account holders with more information regarding the transfer or closure of your account. We will provide account holders with additional information in the coming weeks that outlines when we’ll stop accepting and processing deposits. We recommend you log in to your account to make sure your contact information is complete and up to date. You can also update your information by contacting customer service.
How do I transfer my myRA account to another Roth IRA provider where I can save and invest?
You can initiate a direct transfer of your full account balance to another Roth IRA at any time. To do so, you will first want to identify or open an account at the new Roth IRA provider where you will continue to save and invest. Then, by working with a new Roth IRA provider you select, you can transfer your myRA balance to your new Roth IRA. By opening another Roth IRA and working with the new Roth IRA provider to initiate a transfer of the funds in your myRA to your new Roth IRA, you avoid withholding and potential tax liabilities (including potential tax penalties) that may apply to earnings if funds are paid directly to you.
How can I learn more about rules related to transfers and 60-day rollovers to another Roth IRA?
You can learn more at myRA.gov or at irs.gov/rollovers.
How can I close my account?
To request closure of your account, call myRA customer support at 855-406-6972 or TTY/TDD 855-408-6972 or International 414-365-9616. Please remember that a myRA follows Roth IRA rules. To avoid tax liabilities that may apply to earnings if funds are paid directly to you, you will need to deposit the amount of your distribution (including any tax withholding) into a private-sector Roth IRA within 60 days of the distribution. For more information about Roth IRA distributions, visit myRA.gov/roth-ira.
Why did I receive an additional payment from myRA after I withdrew all the funds from my account?
You may have received an additional payment due to a timing difference between when interest earned was reflected in your account balance, and when you requested a withdrawal (or distribution). When necessary, these additional interest payments are made to ensure
account owners receive their full account balances.
Who can I contact for more information?
You may contact our Call Center Monday through Friday from 8 a.m. to 8 p.m., E.T. at 855-406-6972.

Source: usa.gov





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Wednesday, October 4, 2017

Extension Filers: Deadline is Monday, Oct. 16

Extension Filers: Deadline is Monday, Oct. 16; Prior-Year Adjusted Gross Income Amount May Be Needed to File Electronically
WASHINGTON – The Internal Revenue Service has an important reminder for taxpayers who filed for an extension and face an Oct. 16 filing deadline: The adjusted gross income (AGI) amount from their 2015 return may be needed to electronically file their 2016 tax return.






For those taxpayers who have a valid extension and are in or affected by a federally declared disaster area may be allowed more time to file. Currently, taxpayers impacted by Hurricanes Harvey, Irma and Maria as well as people in parts of Michigan and West Virginia qualify for this relief.
Taxpayers who prepare their own electronic tax returns are required to electronically sign and validate their return. Using an electronic filing PIN is no longer an option. To authenticate their identities, taxpayers will also need to enter either of two items: their prior-year AGI or their prior-year self-select PIN and their date of birth. If married filing jointly, both taxpayers must authenticate their identities with this information.
Generally, tax-preparation software automatically generates the prior-year AGI and/or self-select PIN for returning customers. However, taxpayers who are new to a software product must enter the prior-year AGI or prior-year self-select PIN themselves.

Source: Internal Revenue Service





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Tuesday, October 3, 2017

IRS Reminds Educators of Tax Benefits

IRS Reminds Educators of Tax Benefits
WASHINGTON — As teachers, administrators and aides have launched into their fall semester, taxes may not be on the top of their list. However, knowing what to keep track of now can help reduce the burden at tax time. The Internal Revenue Service reminds educators that there are three key work-related tax benefits that may help them reduce what they pay in taxes.
Educators can take advantage of tax deductions for qualified expenses related to their profession. The costs many educators incur out-of-pocket include items such as classroom supplies, training and travel.
There are two methods educators can choose for deducting qualified expenses: Claiming the Educator Expense Deduction (up to $250) or, for those who itemize their deductions, claiming eligible work-related expenses as a miscellaneous deduction on Schedule A.
A third key benefit enables many teachers and other educators to take advantage of various education tax benefits for their ongoing educational pursuits, especially the Lifetime Learning Credit or, in some instances depending on their circumstances, the American Opportunity Tax Credit.
Educator Expense Deduction
Educators can deduct up to $250 ($500 if married filing jointly and both spouses are eligible educators, but not more than $250 each) of unreimbursed business expenses. To do so, the taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal or aide for at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.
Those who qualify can deduct costs like books, supplies, computer equipment and software, classroom equipment and supplementary materials used in the classroom. Expenses for participation in professional development courses are also deductible. Athletic supplies qualify if used for courses in health or physical education.
Itemizing Deductions (Using Schedule A)
Often educators have qualifying classroom and professional development expenses that exceed the $250 limit. In that case, the IRS encourages them to claim these excess expenses as a miscellaneous deduction on Schedule A. In addition, educators can claim other work-related expenses, such as the cost of subscriptions to professional journals, professional licenses and union dues. Transportation expenses may also be deductible in situations such as, for example, where an educator assigned to teach at two different schools needs to drive from one school to the other on the same day.
Miscellaneous deductions of this kind are subject to a  two-percent limit. This means that a taxpayer must subtract two percent of their adjusted gross income from the total qualifying miscellaneous deduction amount.
Keeping Records
Educators should keep detailed records of qualifying expenses noting the date, amount and purpose of each purchase. This will help prevent a missed deduction at tax time.

Source: Internal Revenue Service





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