Tag Archives: 2016 Tax Tips

Early Retirement Distributions and Your Taxes

Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of the income tax you may have to pay. Here are a few key points to know about taking an early distribution: Early Withdrawals An early withdrawal normally means taking the money out of your retirement plan before you reach age 59½. 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 additional 10 percent tax. Nontaxable Withdrawals The additional 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. Check Exceptions …

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Free Tax Preparation: Ten Tips from the IRS

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2016 Tax Tips Each year, millions of people have their taxes prepared for free by IRS volunteers. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs have helped people for more than 40 years. Here are 10 tips from the IRS about VITA and TCE: Trained and Certified. The IRS works with local community groups to train and certify VITA and TCE volunteers. VITA Program. For the most part, VITA offers free tax return preparation to people who earn $54,000 or less. TCE Program. TCE is mainly for people age 60 or older. The program focuses on tax issues unique to seniors. AARP participates in the TCE program through AARP Tax-Aide. Free E-file. VITA and TCE provide free electronic filing. E-filing is the safest, most accurate way to file your tax return. If you combine e-file with direct deposit, you can get your refund faster. Tax Benefits. Using VITA and TCE can help you get the tax benefits for which you are eligible. For example, you may qualify for the Earned Income Tax Credit or the Credit for the Elderly. You can also get help with the tax provisions of the Affordable Care Act. Bilingual Help. There are …

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2016 Tax Transcript Cycle Code Chart and Resources

Tax Refund Transcript Cycle Code Chart and Resources Updated Daily! Again this year, the IRS Tax Refund Site, Where is my Refund, is often overloaded.  When you efile, your tax return is usually accepted within 24 hours of filing by the IRS.  Then your seemingly endless wait begins for the orange bar to move to approved.  We are receiving reports daily from this years filers that their bars disappear completely a day or two before their tax return is approved and assigned a DDD or Mailed Check date. If your Where is My Refund or IRS2Go Accepted and Approved Bars Have Disappeared PLEASE READ! One way to determine if your refund is about to be approved is to go to the IRS website and request a tax transcript.  Last year users were able to instantly view their transcripts if one was available, but due to an incident with identity theft, you can only ORDER your Tax Transcript Online this year.  You can also call and request a transcript at 800-829-1040, however, ordering your transcript online is easier.  Remember, It is a good sign if you are able to order it!  The next step is translating the internal codes used by …

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2016 Standard Mileage Rates for Business, Medical and Moving Announced

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The Internal Revenue Service today issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 54 cents per mile for business miles driven, down from 57.5 cents for 2015 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015 14 cents per mile driven in service of charitable organizations The business mileage rate decreased 3.5 cents per mile and the medical, and moving expense rates decrease 4 cents per mile from the 2015 rates. The charitable rate is based on statute. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the …

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