Income Tax Return Forms

What is this that’s called the income tax return? Each spring we file federal and state income tax returns. We all know about filing our taxes, paying them, and getting our tax refund, but somehow the term “tax return” is not always clearly understood.

The situation begins in January through March of every year when wage earners receive their wage and tax withholding print out from their employers. Students will receive statements of tuition, scholarship, and aid information covering the previous 12 months. An income tax return form is then used to take the amount earned and figure out the correct dollar amount of taxes for which the individual is liable.

Although a person filing the documents detailing earnings, deductions, and taxes may have some or all of their withheld taxes returned to them, that is not what is meant by the term “income tax return”. Actually, what “tax return” refers to has three parts. First, you are letting the government know, or are returning a report on, how much you made in the previous year. Next you are stating how much you have paid in taxes, so far. And then, entered on the appropriate line is the total income taxes  that you owe. 

So in going through this tax return process many people show that they have overpaid their income tax and therefore have a refund coming. The alternative is of course, that there was not enough money withheld, or that the quarterly payments fell short of estimates and now you owe the government the difference.

To summarize, the phrase “income tax return” is referring to the document that you fill out and send to the IRS and to your state tax department.

An Inherited IRA Minimum Distribution Should Benefit You, Not the IRS

In general, obtaining an inheritance is a good thing for most people. Even when it is a retirement account, the benefits can be a rewarding windfall. You have a unique opportunity to maintain a tax deferred investment for your own retirement fund. Alongside this strategy, the value of the inheritance will be able to increase over time. This is most surely good news when most people are concerned about having enough money to be able to live on when they choose to retire. Nonetheless, if you are not aware of the IRS regulations, you might have to pay a considerable amount of the inherited IRA minimum distribution in penalties and taxes.

The major problem with understanding the inherited IRA minimum distribution policies is that for the average person, the explanations are not always easy to understand. You would have more luck finding a needle in the Black Forest. Additionally, the tax ramifications of inherited IRAs are new because traditional IRAs are also fairly young and people have only begun receiving these funds as an inheritance in the past few years. The tax laws need to modernize with the traditional IRAs as well as the Roth IRAs that you can possibly inherit.

There are two basic varieties of inherited IRA minimum distribution scenarios: spousal inheritances and non-spousal inheritances.

With a spousal inheritance, the rules are more simple because of the special privileges which are available when you are married. There are several options which can be applied to avoiding any penalties and taxes. You can roll over the money into your existing IRA account, or even choose to open a new one. If you are younger than 59 and a half years old, you can remain a beneficiary on the account. Your deceased spouse’s name will also remain on the account. This will allow you to access some of the funds and prevent the 10 percent early withdrawal penalty.

An inherited IRA minimum distribution is handled completely differently when you receive the account from someone other than your spouse. In the first case, make sure that you are identified as a designated beneficiary by your loved one, rather than by simply applying the label of my estate or my living trust. Another mistake is assuming that leaving the IRA beneficiary space blank will automatically distribute the funds as part of the will. When an IRA is transferred to a trust or estate, that taxes must be paid within five years. Being a designated beneficiary affords you you more options for how withdrawals are handled, and will minimize your tax burden to the IRS.

Basically, you want to handle an inherited IRA wisely. You are not trying to avoid paying taxes; as you simply do not want to pay more than you have to because of faulty information. Talk to a financial planning and tax advisors in order to obtain the proper information.

Why Not Donate your Property To A Good Cause

Donate property to charity. Not such a bad idea –especially when fair market value is much more than what you could get for your property — if you sold right now.  Times like these are no fun. We’re in a buyers market. People are not going to come to you for your property. It’ll be tough to turn the property into a rental as well. Likely, it’ll remain this way for a couple years.

Property donations are a standard solution for this kind of conundrum –especially when we’re talking about commercial property. The market can change very quickly. One month your inventory is moving as fast as you can get it out the door. You hardly have time for a cat nap. The next month you have land, a house and some used equipment that are standing around idle generating no value. You sit and you sit. Donating real estate to charities is one answer.

Maybe you have too many homes and too few tax deductions. The state will look on the sale of your property to a non profit as a charitable donation and give you a deduction on your taxes.

Plenty of charities are worthy. Education is a perennial favorite. There are, after all, great colleges out there like Hillsborough College. There are organizations that build homes for the poor like Habitat for Humanity. There are Cancer Treatment Centers that test out new cancer treatments for the benefit of all humanity You can also give to Animal rights groups like Peta that protest against harvesting fur from animals.

There are 5013C’s that will address your needs. The will convert your noncash contribution by way of an appraised value into a number that the IRS will treat as a charitable gift. You can specify the institution you wish your gift to benefit. These non profits then quickly move your property.

There are several of them out there. However, MatchingDonors is rapidly becoming the premier organization for facilitating these kinds of transactions. They have many benefits. They can move property quickly in all 50 states. That includes Alaska and Hawaii. They will give you the option to donate to the charity of your choice. They will appraise your property at Fair Market Value. (In today’s market that can be considerably more than current market value.) They do move quickly. Property turn around is usually less than a month.

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