Category Archives: Pensions

Avoiding Incorrect Self-Employed Retirement Deductions

FS-2008-24, July 2008 Retirement plans are not just for big businesses. They are also available for sole proprietorships. If you are self-employed small business owner, you can set up a qualified retirement plan for yourself and your employees. If you are a sole proprietor, you can deduct contributions you make to the plan for yourself. […]

Saver’s Credit for Retirement Savings Contributions

If you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement, you may be able to take a tax credit. The Savers Credit formally known as the Retirement Savings Contributions Credit applies to individuals with a filing status and income of: Single with income up to $26,000 Head of Household […]

Other State Pension

Today TaxMama hears from Andre in New Jersey who tells us, “My dad died last year and he left some money to me and my two siblings. He worked for the State of Illinois and it’s from a deferred compensation plan. Is the money taxable in New Jersey (where I live)?”

10-Year Averaging

Today TaxMama hears from Ramesh, who has a long memory: “There used to be income averaging, that I know was discontinued. But I remember seeing something about a 10-year averaging that was grandfathered for seniors. I now qualify; but all I can find is something for farmers. Can you please find it for me?”

Divorce Asset Split

Today TaxMama hears from Matthew in California who tells us. “My dad is going through a divorce. They have finally reached an agreement on what her half of the house, stocks, retirement, etc. is worth. He is paying her $xxx,xxx.00 and he is re-financing the house to do it. Who has to pay income taxes […]

Plan Now to Get Full Benefit of Saver’s Credit

Tax Break Helps Low- and Moderate-Income Workers Save for Retirement IR-2007-187, Nov. 9, 2007 – Courtesy of the Internal Revenue Service WASHINGTON — Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2007 and the years ahead, according to the Internal Revenue Service. The saver’s […]

Roth IRA and 401(k)

Today TaxMama hears from Ken in Los Angeles, who tells us “I’ve maxed out my regular 401K contribution ($15,500 I think) for the year. Are there any negative tax consequences if I start contributing to a ROTH IRA?”

Active 401(k)

Today we hear from Harvey in New Jersey who tells us, “I am 67 & semi-retired (working 20 hrs/wk.) I have a 401(k) from my current job where I have been for 4 years. I just went part-time & would like to draw from my 401(k) for supplemental income. I know I can borrow from […]

Saver’s Credit For Retirement Savings Contributions

Courtesy of IRS Even though you may be on vacation, the IRS is always at work thinking about taxes! August and the “Dog Days of Summer” are upon us. Taxes are probably the furthest thing from your mind. But now, months before the end of the year and the start of tax season, is a […]

New Rules May Impact Your Charitable Contributions

Did you make a cash contribution to your favorite charity? Have you recently spent a weekend cleaning stuff out of your garage or basement and then donated the items to a local charity? Charitable contributions can be tax deductible, but you must have the proper records to support your deduction. Due to the Pension Protection […]

Not Alimony

Today TaxMama hears from Lorrie in New York who just got a sudden shock, “My divorce settlement of 2004 clearly states that neither party can make a claim for maintenance or spousal support. I do get 1/2 the net of my former husband’s retirement pension. The State deducts our taxes on the full amount, before […]