Can we talk income taxes?

[SweetSuzanna]

Can we talk income taxes?
I am at a loss as to what to do this year as a lot of things have changed in my income situation etc. and I was just wondering how you guys handle that

[NBruno]

In the relief bill they put a law you can use 2019 or 2020 income to figure your taxes even if you have no kids there are lots of credits. Use the free tax software online from the IRS website and run the numbers with a fake ID. Open enrollment till May for free health insurance Tons of other free giveaways from county and state on their websites

[DesWad]

Open Enrollment and the Democrats are disastrous to your income, freedom of speech and your lifestyle.

[SweetSuzanna]

Originally Posted by NBruno

In the relief bill they put a law you can use 2019 or 2020 income to figure your taxes even if you have no kids there are lots of credits. Use the free tax software online from the IRS website and run the numbers with a fake ID. Open enrollment till May for free health insurance Tons of other free giveaways from county and state on their websites

Really! I had no idea I always thought they’re just out to get us LOL maybe I will check it out so did you run it with different numbers or some thing?

[Bkbird650]

Of COURSE Democrats are a disaster to income. That's why all the data measured show that the economy ALWAYS does better under Democrats. Try again.

[dj8rocks]

The topic of discussion is advice on income taxes.

#6 - Respect the topics presented by those who start a thread. Attempts to derail a thread or change it's direction is referred to as thread hijack and will be discouraged.

dj8

[Unique_Carpenter]

dj,
Thank you.

Suzanna,
Just find a local (to you) tax preparer, and tell them you're a business process consultant for that part time job.

[ShysterJon]

SweetSuzanna:

If part of your tax issues is reporting hobby income, I suggest you talk to one of the ladues who's been here a long time.

[cazper]

Originally Posted by DTickler

Open Enrollment and the Democrats are disastrous to your income, freedom of speech and your lifestyle.

STFU DT- Get off those nuts you’re still hanging on to

On the tax note, please keep posting advice. I have yet to complete mine and following thread for any pointers.

If anyone knows how I should handle a 401K withdrawal please advise on how the taxes are paid. The provision allowed the withdrawal penalty free due to COVID but not sure if the taxes are a lump some this year or distributed over a period of years.

[icewatermansion]

Cazper, you can fill out a form 8915 and spread the income from your 401k withdrawal over three years. However, any withholding you had will be applied to this current year and will not be spread out over 3 years. Also, make sure that you click the box in the software to waive the 10% penalty if you're under 59 1/2. Most softwares won't automatically do it for you.

[cazper]

Originally Posted by icewatermansion

Cazper, you can fill out a form 8915 and spread the income from your 401k withdrawal over three years. However, any withholding you had will be applied to this current year and will not be spread out over 3 years. Also, make sure that you click the box in the software to waive the 10% penalty if you're under 59 1/2. Most softwares won't automatically do it for you.

I really appreciate this detailed information Sir. I will definitely be looking for this now. I’m glad I can distribute over 3 years since I only opted for them to withhold 10%. Thanks Again

[Jam3768]

Originally Posted by cazper

I really appreciate this detailed information Sir. I will definitely be looking for this now. I’m glad I can distribute over 3 years since I only opted for them to withhold 10%. Thanks Again

You also have to qualify for a coronavirus related penalty free withdrawal from your 401K. Everyone does not automatically qualify for this.

You must demonstrate a "true" need for this money. Just because you want some easy cash right now does not qualify as a "true need".

Check out the following links for more information.

https://www.nerdwallet.com/article/i...-401k-covid-19

https://www.cnbc.com/2020/05/05/pena...you-think.html

https://www.thetaxadviser.com/issues...ronavirus.html

Getting an early distribution from your retirement plan has always been one of the worst ways to access quick and easy cash. The CARES act actually did very little to change that fact.

[DesWad]

Originally Posted by Jam3768

You also have to qualify for a coronavirus related penalty free withdrawal from your 401K. Everyone does not automatically qualify for this.

You must demonstrate a "true" need for this money. Just because you want some easy cash right now does not qualify as a "true need".

Check out the following links for more information.

https://www.nerdwallet.com/article/i...-401k-covid-19

https://www.cnbc.com/2020/05/05/pena...you-think.html

https://www.thetaxadviser.com/issues...ronavirus.html

Getting an early distribution from your retirement plan has always been one of the worst ways to access quick and easy cash. The CARES act actually did very little to change that fact.

Maybe ShysterJon can chime in here. I think Jam as a rule of thumb you are correct about "true need" but that would need proven in court if the IRS wanted and were to take you that far. I went over to a friend's house last year and I saw his distribution request at his work 401k and the form asked how was he impacted by the virus and it listed about 15 options. IMO everyone on the planet was "impacted" by this stupid Coronavirus one way or another. Some companies never even offered the penalty free distribution and that is another legal situation maybe Jon can chime in on too.
401ks can become your retirement income source that as a result also can force you to pay tax on SS because of the RMD. IMO anytime someone can get money out of a government ruled product and into their hands or a lesser governed product perhaps the better.

Apologies on the political post above- I either was thinking we were on the political thread or took the OP to be a political question targeting men on modifications. The question was not clear and the tone of changes in income and how men handle it seemed targeted.

[icewatermansion]

I agree with Jam3768, the withdrawal is supposed to be Covid related. However, what qualifies as Covid related is pretty broad, and most people qualify. Like DTickler said, the IRS would have to prove that, and the chances of the doing so are pretty slim. Remember, they WANT this money back in the system so it can be taxed.

Also, agree wholeheartedly that taking money from 401(k) or other retirement funds is generally not a great financial decision in the long run.

[ShysterJon]

Get busted for coitus contra legum, I'm your man. Tax issue? Confer with a tax attorney.