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MOORE’S SERVICES is a full service Tax Preparation Company that provides year-round services. We specialize in both individual and business taxes. We also offer Notary Public Services. Come in and see us today.

Thursday, November 16, 2023

Qualified charitable distributions allow eligible IRA owners up to $100,000 in tax-free gifts to charity

The Internal Revenue Service today reminded individual retirement arrangement (IRA) owners age 70½ or over that they can transfer up to $100,000 to charity tax-free each year. These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to easily give to charity before the end of the year. And, for those who are at least 73 years old, QCDs count toward the IRA owner’s required minimum distribution (RMD) for the year. How to set up a QCD Any IRA owner who wishes to make a QCD for 2023 should contact their IRA trustee soon so the trustee will have time to complete the transaction before the end of the year. Normally, distributions from a traditional IRA are taxable when received. With a QCD, however, these distributions become tax-free as long as they’re paid directly from the IRA to an eligible charitable organization. QCDs must be made directly by the trustee of the IRA to the charity. An IRA distribution, such as an electronic payment made directly to the IRA owner, does not count as a QCD. Likewise, a check made payable to the IRA owner is not a QCD. Each year, an IRA owner age 70½ or over when the distribution is made can exclude from gross income up to $100,000 of these QCDs. For a married couple, if both spouses are age 70½ or over when the distributions are made and both have IRAs, each spouse can exclude up to $100,000 for a total of up to $200,000 per year. The QCD option is available regardless of whether an eligible IRA owner itemizes deductions on Schedule A. Transferred amounts are not taxable, and no deduction is available for the transfer. Report correctly A 2023 QCD must be reported on the 2023 federal income tax return, normally filed during the 2024 tax filing season. In early 2024, the IRA owner will receive Form 1099-R from their IRA trustee that shows any IRA distributions made during calendar year 2023, including both regular distributions and QCDs. The total distribution is shown in Box 1 on that form. There is no special code for a QCD. Like other IRA distributions, QCDs are reported on Line 4 of Form 1040 or Form 1040-SR. If part or all of an IRA distribution is a QCD, enter the total amount of the IRA distribution on Line 4a. This is the amount shown in Box 1 on Form 1099-R. Then, if the full amount of the distribution is a QCD, enter 0 on Line 4b. If only part of it is a QCD, the remaining taxable portion is normally entered on Line 4b. Either way, be sure to enter “QCD” next to Line 4b. Further details will be in the instructions to the 2023 Form 1040. Get a receipt QCDs are not deductible as charitable contributions on Schedule A. But, as with deductible contributions, the donor must get a written acknowledgement of their contribution from the charitable organization before filing their return. In general, the acknowledgement must state the date and amount of the contribution and indicate whether the donor received anything of value in return. For details, see the Acknowledgement section in Publication 526, Charitable Contributions.

Wednesday, November 8, 2023

Expertise.com 2023 Best Tax Service in Birmingham

Top Tax Service in Birmingham

Jan. 23, 2023, is when the IRS will begin accepting returns for the 2022 tax year.

Tax season is when individuals and businesses prepare and file their income taxes. In the United States, tax season is typically from Jan. 1 until the April 15 filing deadline, although Jan. 23, 2023, is when the IRS will begin accepting returns for the 2022 tax year.

Tuesday, November 7, 2023

Inflation Reduction Act of 2022

The IRS is working on implementing the Inflation Reduction Act of 2022. This major legislation will affect individuals, businesses, and tax exempt and government entities. The Inflation Reduction Act changed a wide range of tax laws and provided funds to improve our services and technology to make tax filing easier for you.

Tax Updates and News From the IRS

Taxpayers face a number of issues due to critical tax law changes that took place in 2022 and ongoing challenges related to the pandemic. We continue to share updated information for people preparing to file their 2022 tax returns, as well as anyone who has previous year tax returns awaiting processing by the IRS. The Tax Updates and News is designed to help anyone whether they are now preparing their tax return or are awaiting processing of a return or refund and the latest updates on IRS letters, or notices. Newer updates will be placed at the top of that page; We will also provide critical updates through social media.

Avoid a surprise next year; review tax withholding now before time runs out

With 2023 rapidly coming to a close, the Internal Revenue Service today encouraged taxpayers to review their tax withholding as soon as possible to avoid a potential surprise when they file their tax return next year. Although it's best for taxpayers to verify withholding early in the year, an adjustment made in the final weeks of 2023 could still help to avoid an unexpected result, such as a big refund or a balance due, when filing taxes next year. With only a few weeks left in the year, the IRS encouraged people who haven't checked their withholding recently to do it soon so they can make any withholding adjustments needed. MOORE'S SERVICES, LLC has several ways to help.

Thursday, November 2, 2023

401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000

401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000 IR-2023-203, November 1, 2023 WASHINGTON — The Internal Revenue Service announced today that the amount individuals can contribute to their 401(k) plans in 2024 has increased to $23,000, up from $22,500 for 2023. The IRS today also issued technical guidance regarding all of the cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024 in Notice 2023-75. Highlights of changes for 2024 The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan is increased to $23,000, up from $22,500. The limit on annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost of living adjustment but remains $1,000 for 2024. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan remains $7,500 for 2024. Therefore, participants in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan who are 50 and older can contribute up to $30,500, starting in 2024. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024. The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2024. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase out ranges for 2024: • For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to between $77,000 and $87,000, up from between $73,000 and $83,000. • For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $123,000 and $143,000, up from between $116,000 and $136,000. • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000. • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000. The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $146,000 and $161,000 for singles and heads of household, up from between $138,000 and $153,000. For married couples filing jointly, the income phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000. The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $76,500 for married couples filing jointly, up from $73,000; $57,375 for heads of household, up from $54,750; and $38,250 for singles and married individuals filing separately, up from $36,500. The amount individuals can contribute to their SIMPLE retirement accounts is increased to $16,000, up from $15,500. Additional changes made under SECURE 2.0 are as follows: • The limitation on premiums paid with respect to a qualifying longevity annuity contract to $200,000. For 2024, this limitation remains $200,000. • Added an adjustment to the deductible limit on charitable distributions. For 2024, this limitation is increased to $105,000, up from $100,000. • Added a deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity. For 2024, this limitation is increased to $53,000, up from $50,000. Details on these and other retirement-related cost-of-living adjustments for 2024 are in Notice 2023-75, available on IRS.gov. MOORE'S SERVICES, LLC Phone: 205-324-8753 Email: mooresservices1@gmail.com Income Tax Preparation, Preparation Tax, Tax Preparation of Income Tax, Income Tax, Tax Service, Tax Office, Office Tax, Birmingham, Alabama, AL, AL. 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