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IRS Standard Deduction increases in 2021

The standard deduction for married couples filing jointly for tax year 2021 is increasing to $25,100, up $300 from the previous year. Filers age 65 and older get an additional amount of $1300. For single taxpayers and married individuals who file separately, the standard deduction is increasing to $12,550 for 2021, up $150. For heads…

Skippiing mandatory RMDs… the details

Skipping a mandatory distribution from your IRA? Everything you need to know Wed, Apr 8 2020 by Darla Mercado “This year, the coronavirus relief law is letting savers bypass mandatory withdrawals from their retirement accounts.”  The one-year reprieve enables those who can afford to leave the money invested a better chance of recovering losses. Key…

So you thinkk your mortgage is saving you on income taxes… think again

From my favorite financial guru, Jonathan Clements: “Mortgage interest is tax deductible, but the tax savings are often less than we imagine—and there may be no tax savings at all. Suppose we’re married and our itemized deductions—including $13,000 in mortgage interest—total $26,000 in 2019. Sound impressive? Remember, we could always claim the $24,400 standard deduction for…

Time to update your income tax withholding

With the changes in federal income taxation resulting from the recently passed “Tax Cuts and Jobs Act,” NOW is the time to update your withholding. With so many changes in federal income taxes, including an increased standard deduction, elimination of personal exemptions, increases in the child tax credit, limited or discontinued certain deductions, and changes…

Big Roth 401(k) Tax Surprise

Thanks to Kim Blanton writing in the Squared Away Blog for explaining the complexities of taxes on withdrawals from Roth 401(k) plans. “Financial experts and writers often tout the Roth 401(k)’s main selling point: when the money is withdrawn in retirement, it won’t be taxed.Well, that’s not entirely true.An employee’s own money saved in his…

How to figure taxes on Social Security Benefits

 Are My Social Security Benefits Taxable?  How to Understand Form SSA-1099 and Determine whether You Owe Taxes “Depending on the amount of alternate income that you have in retirement and your filing status, you could owe taxes on up to 85% of your Social Security benefits.” When you receive Social Security income, “you will also…