There isn't much you can do now, in 2013, to lower your tax liability for 2012. One possible way, however, can not only help you save money on your 2012 taxes, but can also help you plan for retirement. I'm talking, of course, about a deductible IRA contribution. 2012 IRA contributions can be made up until April 15, 2013 and, if you meet certain criteria, you can take a deduction for that contribution, thus reducing your 2012 tax liability. If you haven't made an IRA contribution for 2012 and are wondering if you can make a deductible IRA contribution now to help reduce your 2012 tax bill, follow the questions below to find your answer.
The IRS just released the updated version of Publication 970, Tax Benefits for Education (For use in preparing 2012 Returns). It discusses a relatively unknown savings account called a Coverdell Education Savings Account (known as a CESA or ESA). An ESA is set up to pay the qualified education expenses of a child or student, known as a designated beneficiary.
Even though Hurricane Sandy occurred in late October 2012, its effects are still being felt. The IRS issued several news releases describing the postponement of certain tax-related deadlines for victims affected by Hurricane Sandy. These postponements also apply to IRA and other retirement plan deadlines. The relief applies to many counties in New Jersey, New York, and Connecticut.
The IRS updated Publication 590, Individual Retirement Arrangements (IRAs) For use in preparing 2012 Returns. This publication is a good source of basic information about Traditional and Roth IRAs, simplified employee pension (SEP) plans, and savings incentive match plans for employees of small employers (SIMPLE) IRA plans. Pub 590 contains a section called “What’s New for 2012.” See some of the notable changes below.
Whether you won or lost on Super Bowl Sunday, your gambling wager has tax and IRA planning consequences. Super Bowl XLVII was held in New Orleans this past Sunday. After San Francisco played a “lights out” second half after the lights went out, the Baltimore Ravens held on to win the game 34–31. Although Baltimore won the game and got to raise the coveted Vince Lombardi trophy, it wasn't the only winner this past weekend. In fact, millions of Americans became winners themselves as a result of legal and illegal gambling.
As we gather our information to prepare our federal income tax return for 2012, don't forget about that Roth IRA conversion you did all of the way back in 2010. A conversion you did from a company plan or IRA to a Roth IRA in 2010 will likely need to be reported on your 2010 tax return.
If you took a withdrawal from any IRA or employer plan last year, you will get a copy of IRS Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. very soon. The IRA custodian or employer plan was required to send you a copy of Form 1099-R by January 31, 2013 for any 2012 retirement plan distributions you took.
A Washington, D.C. district court handed down a ruling that affects all of us as the 2012 tax season gets underway. The court ruled in Loving et al vs. IRS that the Internal Revenue Service did NOT have the authority to regulate persons who prepare or help prepare tax returns for a fee. They couldn't order these individuals to pass a test or maintain a minimum required level of competency.
The retirement plan rules are constantly changing. They can be complex. Often, taxpayers are looking for good, free sources of information. While Internet searches can be helpful, caution should be used because there is no guarantee that the information you have found is timely or accurate. So where can you get accurate information on retirement plans? We explain below.
The 2012 tax law changes, passed by Congress after the fact in 2013, have necessitated some changes in forms used to file your 2012 taxes. IRS has just updated Form 8606, Nondeductible IRAs. This latest version is dated January 15, 2013.
