4Thought Blog

4thought graphic - blog 2020

Federal Government Warns of Tax Return, Refund Delays for 2022

Posted by Concannon Miller on Tue, Jan 18, 2022

U.S. Treasury officials last week warned of expected significant delays in processing tax returns and refunds for the 2022 season.

The IRS is still dealing with backups in processing returns from the past two filing seasons and the continuing pandemic is causing staff shortages, officials said. Normally at the start of tax season the IRS has about 1 million items in its backlog but the current backlog totals more than 6 million items, officials said.

The IRS is urging taxpayers to file electronically and request direct deposit – instead of a mailed check – for quicker turnaround.

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Topics: Business tax planning, Individual tax planning

The Top 7 Personal Financial Resolutions for 2022

Posted by Concannon Miller on Tue, Dec 28, 2021

It's almost time to ring in the New Year — and many people are looking forward to putting 2021 in the rearview mirror.

While New Year's resolutions often focus on eating less and exercising more, you should also give some thought to your financial fitness.

Here are seven ways to introduce more discipline and vigor into your financial regime.

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Topics: Individual tax planning

Tips to Avoid Costly Tax Penalties on Your RMDs

Posted by Concannon Miller on Mon, Dec 13, 2021

After a one-year hiatus due to the COVID-19 pandemic, owners of qualified retirement plans and IRAs must adhere to the rules for required minimum distributions (RMDs). The RMD rules are tricky and could result in a substantial tax penalty if you're not careful.

For starters, an RMD is the amount you must withdraw from a qualified retirement plan account or traditional IRA to avoid an expensive tax penalty after reaching the "magic" age. Here are the answers to 20 frequently asked questions about RMDs under current law.

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Topics: Individual tax planning

4 Big Charitable Tax Breaks for Businesses, Individuals to use in 2021

Posted by Concannon Miller on Tue, Nov 23, 2021

Are you feeling generous? Qualified charitable contributions can be rewarded with sizeable tax breaks during the second calendar year of the COVID-19 pandemic.

Recent legislation includes the following four temporary tax law changes that are designed to help individuals and businesses that donate to charities through the end of 2021.

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Topics: Business tax planning, Individual tax planning

9 Tax-Saving Moves for Individuals in 2021

Posted by Concannon Miller on Thu, Oct 28, 2021

With year end rapidly approaching, it's time to consider making some moves that will lower your 2021 federal income tax bill — and potentially position you for future tax savings. Unfortunately, tax planning is particularly challenging this year, because the tax rules for 2022 aren't yet certain. In fact, they may not even be certain for 2021.

Here are nine planning tips for you to consider making before year end. But you also may want to be ready to take last-minute corrective actions if Congress works out a deal on the Build Back Better Act and the Bipartisan Infrastructure Bill before year end.

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Topics: Individual tax planning

Hurricane or Tornado Victim? How to Salvage a Casualty Loss Deduction

Posted by Concannon Miller on Tue, Sep 28, 2021

So far, 2021 has been a rough year for casualty losses. Hurricane Ida wreaked havoc in the south and east. Wildfires have destroyed millions of acres in the west. Catastrophes in other parts of the country this year — including tornadoes, earthquakes and floods — have caused significant damage to personal property.

But there may be a silver lining to these dark storm clouds: Casualty victims who have suffered economic loss may be eligible for tax deductions on their 2021 return. In fact, some victims may even benefit from special expedited tax relief measures, if certain requirements are met.

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Topics: Individual tax planning

The Home-Sale Gain Exclusion Tax Break: Cashing in on the Sellers’ Market

Posted by Concannon Miller on Tue, Sep 21, 2021

In many areas, residential real estate markets have surged, and some are still surging. In these sellers' markets, big home-sale gains are likely. That's great news if you're a seller — but will you owe taxes on the profit?

If you sell your principal residence for a large profit, you can potentially exclude tax (pay no federal income tax) on a certain amount of profit. Here are the basics of how to take advantage of this tax-saving opportunity.

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Topics: Individual tax planning

Hold or Sell Stocks: Tricks to Avoid Unfavorable Tax Consequences

Posted by Concannon Miller on Tue, Jul 20, 2021

With autumn coming up in a couple months, it's time to think about "harvesting" capital gains or losses from sales of securities.

In addition, unfavorable tax law changes proposed in President Biden's American Families Plan may create an added sense of urgency for some taxpayers.

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Topics: Individual tax planning

Child Tax Credit Payments: Find Out How Much You’ll Get

Posted by Concannon Miller on Thu, Jul 1, 2021

The IRS has launched a new online tool that can help families determine whether they qualify for the Child Tax Credit and the special monthly advance payments that begin on July 15. The interactive tool is called the "Advance Child Tax Credit Eligibility Assistant" and it can be accessed here

In order to determine if you're eligible for the payments, you'll need to answer a series of questions about yourself and your family members. The tool can be used by anyone, but the IRS states "it may be particularly useful to families who don't normally file a federal tax return and have not yet filed either a 2019 or 2020 tax return."

Using this tool can help these parents decide whether they should take the next step and register for the CTC payments on another new IRS tool unveiled earlier (called the "Non-Filer Sign-Up Tool").

The IRS explained that most families don't need to take any action. Eligible families who already filed, or plan to file, 2019 or 2020 income tax returns shouldn't use the Non-Filer Sign-Up Tool. Once the IRS processes their 2019 or 2020 tax returns, the information will be used to determine eligibility and issue advance payments.

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Topics: Individual tax planning

Biden To Seek Tax Changes on High Earners, Capital Gains, Some Businesses

Posted by Tony Deutsch on Thu, Jun 24, 2021

The Biden Administration recently released detailed tax proposals through the so-called Green Book. If approved, there would be big changes for high-income earners, on capital gains and for some business taxes.

While these proposals would all have to go through the legislative process and therefore may not pass or may be changed, it’s possible some of these may become law and therefore warrant tax planning considerations.

Even if Biden’s proposals don’t become law, there are some automatic taxes changes coming down the road as tax changes in President Trump’s Tax Cuts and Jobs Act only run through 2026. While five years feels like a long time, it’s not when it comes to tax planning.

Here’s what the Biden administration has proposed:

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Topics: Business tax planning, Individual tax planning

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