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At some point, taxpayers who have a traditional IRA may wish to convert it to a Roth. Roth IRAs are more flexible in that there are no required minimum distributions when the owner reaches age 70 1/2. In addition, qualified distributions from a Roth IRA are not taxable.

Under current tax law, in the year you convert a traditional IRA to a Roth IRA, you must recognize the amount converted as income on your tax return, with the exception of any basis that may be in the traditional IRA. Depending on the amount, this can significantly impact your tax return. It can even bump you up into a higher tax bracket!

Beginning in 2010, the $100,000 modified AGI limit and filing status requirement on rollovers from eligible retirement plans to Roth IRA's have been eliminated.

Tax Tips Small Business

  • Determining Qualified Business Expenses

    Be sure to deduct every legitimate expense

    Amounts you spend in the course of conducting business are generally deductible from the gross income of that business. This includes any start-up expenses. You can claim amounts spent for items ordinary and necessary in your trade or business as a deduction against your income. Otherwise, the amounts are amortized, depreciated, or expensed depending on the nature of the purchases.

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Small Business Quick Tip

  • Business Mileage Rate

    Instead of deducting the actual expenses for the business use of your vehicle, opt for the standard mileage rate. In 2016, you can deduct 54 cents for each business mile you drive.
Friday, 22nd February 2019
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Tax Tips Personal

  • Take Advantage of Tax Savings in a Down Market

    Know when you have a deductible loss

    Just because the stock market lost money, doesn't mean you have a deductible loss. As long as you hold on to an investment, you only have a loss on paper. It's only when you actually sell the investment that you have a transaction to report on your tax return.

    Fortunately, the tax law allows you to offset your capital gains by your capital losses. You can avoid or minimize taxable gain by selling two investments, one at a gain and the other at a loss.

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Personal Quick Tip

  • Teacher Expenses

    If you are a teacher who spent your own money for classroom supplies, you can take a deduction for up to $250 of those costs.