In 2020, the Secure Act gave non-spouse heirs 10 years to withdraw funds from inherited IRAs, instead of the previous lifetime withdrawals. However, there are no penalties for 2024 missed withdrawals.
Before withdrawing funds, consider your financial situation and other factors that may impact your tax liability, such as your retirement date and potential changes in tax brackets after 2025.
President Biden and Vice President Harris released their tax returns for 2023. Biden's income rose slightly while Harris's income decreased slightly. Both couples paid federal income taxes and incurred small penalties for underpaying estimated taxes. The returns highlight the complexities of the tax code, including handling multiple income sources and managing tax liabilities. Tax experts advise higher earners with complex financial situations to consider working with professionals to optimize their tax strategies.
The 2017 tax cuts may not have been as beneficial for middle class Americans as advertised. Many provisions, including increased standard deductions and favorable tax brackets, are set to expire unless Congress extends them. Other hidden costs, such as increased property taxes and excise taxes, can offset some of the savings. Consider consulting a tax advisor for personalized advice on how to minimize tax exposure given these complexities.
The tax filing deadline for most Americans is April 15th. Those who haven't filed can still apply for an extension until October 15th, but taxes owed must be paid by April 15th. Many can file taxes for free through IRS Free File or Direct File. If someone owes a balance but doesn't file, they can expect penalties and interest. The IRS also suggests filing electronically for a faster refund.
If you can't pay your taxes in full by April 15th, you should still file your return and pay what you can. The IRS offers payment plans that allow you to spread out the payments over time, reducing the late-payment penalty by half. These plans can be applied for online, by phone, or by mail, and can take up to 180 days for short-term plans and up to 72 months for long-term plans.
President Biden's new plan will forgive up to $20,000 in student loans for many borrowers, including those who owe more than they originally borrowed, low-income earners, and those who have not successfully applied for other relief programs. The plan also cancels loans for borrowers whose degrees are from "low-value" institutions or who are experiencing financial hardship.
