5 Things You Need to Know About Sales Taxes in QuickBooks Online
If you sold only one type of product to customers in one city, collecting and paying sales tax would be easy. But most businesses have a wider reach than that.
Congress Adds More Uses for College Savings Plans (Sec 529 Plans)
Congress originally created the Qualified State Tuition Plan, often referred to as the Sec 529 Plan, as a tax-beneficial incentive for parents, grandparents, and others to save money for an individual’s future college tuition and fees. There is no federal tax deduction for making contributions, but taxes on the earnings within a plan are not only tax-deferred while they are held in the account, they are tax-free when withdrawn to pay for qualified education expenses. Thus, the real tax benefit of these plans is the earnings within the plan accumulating tax-deferred and then being tax-free when withdrawn if used for college tuition and related qualified expenses.
New Twist Added to the IRA-to-Charity Provision
Ever since 2006, individuals age 70½ or older have been able to transfer up to $100,000 annually from their IRAs to qualified charities. These transfers are referred to as qualified charitable distributions (QCDs), and here is how this provision, if utilized, plays out on a tax return:
Congress Removes IRA Contribution Age Restriction
In the past, unlike Roth IRAs, which have no age restriction associated with making a contribution, taxpayers were unable to make a traditional IRA contribution in and after the year they reached the age of 70½. This is primarily because a Roth IRA contribution is not tax deductible, while a traditional IRA is, unless it is phased out for higher income taxpayers.
Mortgage Insurance Premium Deduction Retroactively Extended
For tax years 2007 through 2017, when taxpayers itemized deductions, they could deduct the cost of premiums for mortgage insurance on a qualified personal residence as home mortgage interest.