ADDITIONAL 0.9% MEDICARE TAX Individuals must pay an additional 0.9% Medicare tax on earned income above certain thresholds. The employee portion of the Medicare tax is increased from 1.45% to 2.35% on wages received in a calendar year in excess of $200,000 ($250,000 for married couples filing jointly; $125,000 for married filing separately). Employers must [...]
Before this year, you could claim itemized deductions for medical expenses paid for you, your spouse and your dependents to the extent those expenses exceed 7.5% of your adjusted gross income (AGI). But the rules have changed for the worse in 2013 and beyond. Due to the 2010 Affordable Care Act, the old 7.5%-of-AGI [...]
IRA owners and beneficiaries who have reached age 70 ½ are permitted to make donations to IRS-approved public charities directly out of their IRAs. These so-called qualified charitable distributions, or QCD‘s are federal-income-tax-free to you, but you get no charitable deduction on your tax return. But,that is fine because the tax-free treatment of QCDs [...]
Higher income taxpayers beware. There is a new surtax to contend with. Originating as a component of 2010 health care legislation and first effective in 2013, the 3.8% net investment income tax (3.8% NIIT) is assessed on the lesser of net investment income (NII) or modified adjusted gross income (MAGI) above specific thresholds. The MAGI [...]
The U.S. Supreme Court’s decision in the Edith Windsor Case, invalidating a key provision of the Defense of Marriage Act, raised many questions regarding the federal income tax rights and responsibilities of the same-sex couples. The U.S. Department of the Treasury and the IRS recently ruled that same-sex couples, legally married in a jurisdiction that [...]
If you are unable to borrow from a bank or other outside source, your qualified retirement plan may be a good option. IRS guidelines permit a limited amount of borrowing from corporate qualified retirement plans, including 401(k) plans. In general, borrowings are limited to 50% of the participant’s account balance up to a maximum of [...]