Learning Center for Tax and Financial Insights

The tax filing extension deadline, October 15th, is just around the corner. Here is a quick reminder of what you need to know. .embed-container { position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; max-width: 100%; } .embed-container iframe, .embed-container object, .embed-container embed { position: absolute; top: 0; left: 0; width: 100%; height: 100%; }

Article Highlights: How Naming Beneficiaries Impacts Traditional IRA Distributions The Impact of Naming Your Trust as a Beneficiary IRA Beneficiary Taxation Keeping your designated IRA beneficiary current is very important. You may not want your account going to your ex-spouse, and you certainly do not want a deceased individual to be your beneficiary. In addition, the decision concerning whom you wish to designate as the beneficiary of your traditional IRA affects: The minimum amounts you must withdraw from the IRA when you reach age 72; Who will get what remains in the account after your death; and How that IRA balance can be paid out to beneficiaries. What’s more, a periodic review of your named IRA beneficiaries is vital to ensure that your overall estate planning objectives will be achieved in light of changes in the performance of your IRAs and your personal, financial, and family situations. For example, if your spouse was named your beneficiary when you first opened the account several years ago and you’ve subsequently divorced, your ex-spouse will remain the beneficiary of your IRA unless you notify your IRA custodian to change the beneficiary designation. The issue of naming a trust as the beneficiary of an IRA comes up regularly. There is no tax advantage to naming a trust as the IRA beneficiary. Of course, there may be a non-tax-related reason, such as controlling a beneficiary’s access to money; thus, naming a trust rather than an individual(s) as the beneficiary of an IRA could achieve that goal. However, that is not typically the case. Generally, trusts are drafted so that IRA-required minimum distributions (RMDs) will pass through the trust directly to the individual trust beneficiary and, therefore, be taxed at the beneficiary’s income tax rate. However, if the trust does not permit distribution to the beneficiary, RMDs will be taxed at the trust level, which has a tax rate of 37% on any taxable income in excess of $12,950 (2020 rate). This high tax rate applies at a much lower income level than for individuals. Distributions from traditional IRAs are almost always taxable whether they are paid to you or, upon your death, to your beneficiaries. A portion of a traditional IRA’s distributions will be nontaxable if some of the contributions to the IRA weren’t deducted on the IRA owner’s tax return when the contributions were made, but this situation isn’t very common.

If you are receiving temporary home mortgage relief under the CARES Act or in danger of having your home repossessed, know that any debt relief can have an impact on your taxes. Watch this video to find out more. .embed-container { position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; max-width: 100%; } .embed-container iframe, .embed-container object, .embed-container embed { position: absolute; top: 0; left: 0; width: 100%; height: 100%; }

If you have lost your job, there are a number of tax issues you may encounter. How you deal with these issues can profoundly impact your taxes and finances. Watch this video to learn more about some typical issues. .embed-container { position: relative; padding-bottom: 56.25%; height: 0; overflow: hidden; max-width: 100%; } .embed-container iframe, .embed-container object, .embed-container embed { position: absolute; top: 0; left: 0; width: 100%; height: 100%; }

November 2 - Social Security, Medicare and Withheld Income Tax File Form 941 for the third quarter of 2020. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until November 10 to file the return. November 2 - Certain Small Employers Deposit any undeposited tax if your tax liability is $2,500 or more for 2020 but less than $2,500 for the third quarter. November 2 - Federal Unemployment Tax

November 10 - Report Tips to Employer If you are an employee who works for tips and received more than $20 in tips during October, you are required to report them to your employer on IRS Form 4070 no later than November 12. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.