Tax & Accounting Update
Tax Extension -> January 3, 2022
Internal Revenue Service has announced today that individuals and households who reside or have a business anywhere in the state of Louisiana (who had a valid extension to file 2020 returns) now have until January 3, 2022, to file their business and individual tax returns as well as to make third quarter estimated payments which are otherwise due September 15th. The January 3, 2022, deadline applies to the quarterly payroll and excise tax returns normally due on November 1, 2021. It also applies to tax-exempt organizations, that had a valid extension due to run out on November 15, 2021. For more information click on the link below.
Tax Topics Simplified
Casualty Losses
Affected taxpayers in a federally declared disaster area have the option of claiming disaster related casualty losses on their federal income tax return for either the year in which the event occurred, or the prior year. If you already filed your tax return but suffered casualty loss due to the storm and resided in a federally declared disaster area, you have an option of amending your current year tax return to claim losses or you can wait till you file your 2021 tax return and claim losses then. In the past, all types of casualty losses were deductible. The Tax Cuts and Jobs Act radically changed the rules for 2018 through 2025. During these years, casualty losses to personal property such as your home, personal belongings, or car are deductible only if caused by a federally declared disaster.
News you can use
Required Minimum Distributions (RMD)
Under a provision in proposed retirement legislation pending in Congress, RMD would start at age 75 by 2032 up from age 72 which was changed by Secure Act from 70 ½. This will give more flexibility and tax planning opportunity especially to those individuals who do not need to draw a large amount of money out of their retirement account while retired. As we get older, our income usually decreases, and one of the benefits of moving RMD to latter age gives us more time to plan and to convert Traditional IRA into Roth IRA. The funds taken out of the Roth IRA are not taxable. Here is an interesting article that puts things into perspective.
Happy Labor Day
Labor Day in the United States is traditionally observed on the first Monday in September. It was created by the labor movement in the late 19th century and became federal holiday in 1894. In my home country Bosnia and Herzegovina as well as in most countries around the world labor day is observed on May 1. I hope you all have a great the rest of the week and Labor Day weekend. My family will most likely spend this weekend exploring the beautiful hiking trails of Hot Springs, Arkansas. Happy Labor Day!!!
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E-mail: dragana@dcmtax.com