Tax Reminders
April 18th - Tax Deadline
The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022. This deadline applies to individuals and C Corporations. It is important to remember that if you file an extension, you get extended time to file but not an extension to pay. If taxes owed are not paid by April 18th for 2021, interest and penalties WILL start accruing.
The deadline to contribute into Health Savings Account (HSA) as well as Individual Retirement Account (IRA) for 2021 also falls on April 18th. The maximum allowed contribution into HSA for 2021 is $3,600 single, $7,200 family plus $1,000 if age 55 and over. The maximum allowed contribution into traditional IRA is $6,000 plus $1,000 catch up contribution if over age 50. The maximum allowed contribution into Roth IRA is $6,000 plus $1,000 catch up contribution if over age 50. Keep in mind that there are certain limitations on deductibility for traditional IRA contributions as well as income caps on who can contribute to Roth IRA.
Federal & LA State Retirement - Non Taxable in Louisiana
Most of the Federal and State retirement benefits received by those who are residents of Louisiana are not taxable by the state of Louisiana. The most frequent retirement benefits that I see being exempt from Louisiana state income tax are Teachers and Military pensions. Those as well as any other income exempt from Louisiana state income tax will be reported on Schedule E of the Louisiana tax return as an adjustment. If you are receiving state or federal retirement benefit but do not see an amount on Schedule E of your Louisiana income tax, you may be paying too much in state income taxes. For the full list of retirement benefits that are exempt from Louisiana state income tax click on the link below.
Charitable Donations
For a contribution to be tax deductible it needs to be made out to a recognized charitable organization by the Internal Revenue Service. Giving money to a friend in need does not qualify as a charitable contribution and unfortunately cannot be deducted on your tax return. If you are thinking about giving money to an institution that claims that is operating as non for profit (501(c)(3) organization), please make sure that you have a proof of the contribution. For 2021 even if you do not itemize, you will be able to take $300 (single) and $600 (married filing jointly) deduction for charitable contributions above the line. This is one of the provisions that was passed to help people deal with the financial burden that covid-19 has caused. Below is the link where you can check if certain organizations are recognized as charitable organizations.
Target group - IRS Audits
Based on an analysis of the IRS data, individuals and families who make less than $25,000 a year are more likely to get audited than those who make a lot more and have a lot more activity on their tax returns. For the fiscal year ended September 30, 2021; 13 tax returns out of 1,000 filed by those making less than $25,000 were audited compared to 2.6 for every 1,000 tax returns for people who make more than $25,000 were audited. Overall, the percentage of audited tax returns over years has significantly declined due in part to the shrinking workforce. For a full article and more details as to why those making less than $25,000 per year are target group for the IRS click on the link below.
Will student loan payments get deferred further?
Recently, I have read a few different articles that talk about the possibility of student loan payments to be deferred even further past May 1st. Some of the reasons why payments may still be deferred revolve around midterm elections and President seems to be still looming towards forgiving part of some, or all of the outstanding student loan debts. For full article click on the link below.
Harsh punishment for misuse of EIDL funds
A Georgia man has been sentenced to 36 months in prison for using Economic Injury Disaster Loan (EIDL) funds ($85,000) to purchase rare Pokémon cards. EIDLs were created as part of Congress’s pandemic relief plan, and they were intended to be used solely to run business operations (rent, utilities, payroll and other necessary day to day expenses). In addition to 36 months in prison the Georgia man will have to pay restitution in the amount of $95,000. For a full article click on the link below
Tax Free Tanks
I came across this interesting article and wanted to share it with y’all. Ukrainian National Agency on Corruption prevention announced last week that any of the captured Russian tank or armored personnel carriers will not count as part of citizens income and will not have to be declared for tax purposes…
The war is a terrible thing and nothing good can come out of it. Innocent families and children are dying… For nineteen straight days Russia has been invading Ukraine. What once were beautiful cities today are ghosted, burned down, buildings and homes of thousands of families who had to flee out of their own country to look for a better tomorrow. I grew up in country that went through a war, 1992 - 1995 (Bosnia & Herzegovina – part of former Yugoslavia). I was a child and do not remember a lot (thankfully), but I do remember how some of the cities looked in 2000s and years after that. It took a long time for our economy to get back on its feet and rebuild infrastructure that was destroyed. Today, my country is still exposed to many political games and at any moment another war could start… It is mind blowing that intelligent people in 21st century cannot come up with a solution or way to avoid such a dark and deadly conflicts. Like covid was not enough! STOP THE WAR!!!
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E-mail: dragana@dcmtax.com
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