Due to COVID-19, many parents are hiring nannies and babysitters because daycare centers and summer camps have closed. This may result in federal “nanny tax” obligations. You may be liable for federal income tax, Social Security and Medicare (FICA) tax and federal unemployment tax. (Even if you don’t employ a nanny, you may owe nanny […]
Tag Archives | COVID-19
Some people are required to return Economic Impact Payments that were sent erroneously
Economic Impact Payments (EIPs) are being sent to eligible individuals in response to the financial impact caused by COVID-19. However, the IRS says some payments were sent erroneously and should be returned. For example, an EIP made to someone who died before receipt of the payment should be returned. The entire EIP should be returned […]
What qualifies as a “coronavirus-related distribution” from a retirement plan?
The CARES Act allows qualified people to take “coronavirus-related distributions” from retirement plans without paying tax. So how do you qualify? You can take up to $100,000 in coronavirus-related distributions made from an eligible retirement plan between Jan. 1 and Dec. 30, 2020. If you repay the distribution to your IRA or plan within 3 […]
If you’re selling your home, don’t forget about taxes
Traditionally, spring and summer are popular times for selling a home. Unfortunately, the COVID-19 crisis has resulted in a slowdown in sales. The National Association of Realtors reports that existing home sales in April decreased 17.2% from April 2019. Still, many people are selling this year. If you’re one of them, it’s a good time […]
Did you get an Economic Impact Payment that was less than you expected?
Did you get an Economic Impact Payment (EIP) that was less than you expected? The federal government is sending EIPs to help mitigate the effects of COVID-19. If you’re under a certain adjusted gross income (AGI) threshold, you’re generally eligible for the full $1,200 ($2,400 if married filing jointly).
Do You Have Tax Questions Related to COVID-19? Here are Some Answers
The coronavirus (COVID-19) pandemic has affected many Americans’ finances. You may have questions about the implications. For example, if your employer is requiring you to work from home, can you claim home office deductions on your tax return? Unfortunately, if you’re an EMPLOYEE who telecommutes, home office expenses aren’t deductible through 2025. What about unemployment […]
IRA account value down? It might be a good time for a Roth conversion
The coronavirus (COVID-19) pandemic and the ensuing stock market downturn has caused the value of some retirement accounts to decrease. But if you have a traditional IRA, a downturn may provide a valuable opportunity: It may allow you to convert to a Roth IRA at a lower tax cost. Roth IRA qualified withdrawals are tax […]
Answers to Questions You May Have About Economic Impact Payments
A new IRS tool called “Get My Payment” shows taxpayers either their EIP amount and the scheduled delivery date, or that a payment hasn’t been scheduled. It also allows taxpayers who didn’t use direct deposit to provide bank account details. Some people are getting an error message (“payment status not available”). Hopefully, the IRS will […]
COVID-19: IRS announces more relief and details
In the midst of the coronavirus (COVID-19) pandemic, Americans are focusing on their health and financial well-being. To help with the impact facing many people, the government has provided a range of relief. On its Twitter account, the IRS announced that it deposited the first Economic Impact Payments into bank accounts on April 11. “We […]
CARES ACT Changes Retirement Plan and Charitable Contribution Rules
The CARES Act contains a range of relief, notably the “economic impact payments” that will be made to people under a certain income threshold. But the law also makes some changes to retirement plan rules. The additional 10% tax on early distributions from IRAs and 401(k) plans is waived for distributions made between Jan. 1 […]
