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☆ This 401(k) match change could have 'unintended consequences' at tax time, experts say
▼ + stars: | 2024-05-03 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

If you've opted into your employer's Roth 401(k) after-tax matching contributions this year, it could trigger a tax surprise without proper planning, experts say. Enacted in 2022, Secure 2.0 ushered in sweeping changes for retirement savers, including the option for employers to offer 401(k) matches in Roth accounts. Previously Roth 401(k) matches went into pretax accounts. However, those new matching Roth contributions could have "unintended consequences" at tax time, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. More from Personal Finance:IRS aims to more than double its audit rate on wealthiest taxpayersHere are three ways to lower your credit card annual percentage rate, experts sayWhy your financial advisor may not give you the best Social Security advice

Persons: you've, Roth, Tommy Lucas, Moisand Fitzgerald Tamayo Organizations: of America, Finance Locations: Orlando , Florida

☆ This simple move 'takes minutes' to file a free federal tax extension, tax pro says — here’s what to know
▼ + stars: | 2024-04-10 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

If you need more time for your taxes, there's a quick, free way to file a federal tax extension online, according to experts. Luckily, filing for a federal tax extension "takes minutes," according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. But you have through that due date to file an extension, which pushes the deadline by six months to Oct. 15. Some taxpayers already have a federal extension due to natural disaster declarations. Without the extension, your balance triggers the failure to file penalty, which is worth 5% of your unpaid taxes per month or partial month, capped at 25%.

Persons: there's, Tommy Lucas, Moisand Fitzgerald Tamayo Organizations: Finance Locations: Orlando , Florida

☆ What Biden's new student loan forgiveness plan means for your taxes
▼ + stars: | 2024-04-09 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

US President Joe Biden speaks about student loan relief at Madison College in Madison, Wisconsin, on April 8, 2024. Andrew Caballero-reynolds | AFP | Getty ImagesTax treatment of student loan forgivenessStudent loan forgiveness is federally tax-free through 2025 — thanks to a provision from the American Rescue Plan Act of 2021. But the future taxability of student loan forgiveness is unclear. Many states have conformed to federal rules on the taxability of student loan forgiveness. Depending on your situation, higher income from taxable student loan forgiveness could cause "a chain of [tax] consequences," such as phaseouts for other tax breaks, Lucas said.

Persons: Joe Biden, Andrew Caballero, reynolds, Biden, Tommy Lucas, Moisand Fitzgerald Tamayo, Lucas, that's, Ethan Miller, isn't, Miller Organizations: Madison College, AFP, Getty, American, Planning, Progress, D.C Locations: Madison , Wisconsin, Orlando , Florida, Washington

☆ These are the proposed changes to the child tax credit — and how much you could get
▼ + stars: | 2024-01-24 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

Kate_sept2004 | E+ | Getty ImagesHouse lawmakers on Friday advanced a $78 billion bipartisan tax package, which includes temporary child tax credit changes that could affect millions of families this filing season. The plan temporarily expands access to the child tax credit with retroactive changes. Here's what to know about the proposed changes to the child tax credit as the opening of tax season, on Jan. 29, quickly approaches. How the child tax credit worksCurrently, the child tax credit is worth up to $2,000 per qualifying child under age 17 for 2023 and reduces your taxes on a dollar-for-dollar basis. How much the child tax credit could increaseIf enacted, the bipartisan tax bill would make several temporary changes to the child tax credit that could benefit the lowest-earning Americans, according to the Urban-Brookings Tax Policy Center.

Persons: Tommy Lucas, Moisand Fitzgerald Tamayo, Lucas, Chuck Marr Organizations: Getty Images, Urban, Brookings Tax, Center, Budget Locations: Orlando , Florida

However, you may still owe taxes if you made a profit on resold Taylor Swift tickets, experts say. While third-party payment apps won't report as many business transactions to the agency this year, you are still required to pay taxes on profits, including resold concert tickets. "The big thing this past year was selling Taylor Swift concert tickets," said certified financial planner Tommy Lucas, an enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. 'If you want to follow the law ... report it'Ticket profits have always been taxable, and this may affect those who resold Taylor Swift concert tickets this summer. Keep copies of your purchase receipts for goods you later resell, such as those Taylor Swift tickets, since tax liability will be based on your sales proceeds minus the original purchase price.

Persons: Taylor Swift, Buda Mendes, tas23, Tommy Lucas, Moisand Fitzgerald Tamayo, Swift, Taylor, Lucas, James Guarino, Baker Newman Noyes, it's, Albert Campo Organizations: Getty, IRS, PayPal, TicketMaster, Accounting Services, CNBC Locations: Orlando , Florida, Boston, New Jersey

☆ Watch for this 'phantom tax' before taking Affordable Care Act insurance subsidies, advisor says
▼ + stars: | 2023-11-16 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

d3sign | Moment | Getty ImagesAs millions of Americans compare health plans on the Affordable Care Act insurance marketplaces, experts say it's critical to run projections and rethink popular tax moves before enrolling in subsidies. The average enrollee is paying premiums of $124 per month after the subsidies, which were boosted through 2025 via the Inflation Reduction Act. If your actual income exceeds your estimates, you might be required to repay some or all of the subsidy. "If your actual income exceeds your estimates, you might be required to repay some or all of the subsidy." The subsidy eligibility calculation also considers your location, family size and whether you spouse has available coverage.

Persons: Tommy Lucas, Moisand Fitzgerald Tamayo, Lucas, Sean Lovison Organizations: Affordable, American, Center of Budget, Security, Philadelphia Locations: Orlando , Florida

☆ Here's how much you can make in 2024 and still pay 0% capital gains taxes
▼ + stars: | 2023-11-14 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

The IRS on Thursday released dozens of inflation adjustments for 2024, including higher income tax brackets, increased standard deductions and boosted income thresholds for capital gains. For 2024, there are higher thresholds for the 0%, 15% and 20% long-term capital gains brackets, applying to assets owned for more than one year. How to calculate your capital gains tax bracketYou're more likely to fall into the 0% capital gains bracket in 2024 with higher standard deductions and capital gains income thresholds. "It's really quite a bit of capital gains you can receive without paying any tax," said certified public accountant Tom Wheelwright, CEO of WealthAbility. Who may fall into the 0% capital gains bracket

Persons: Tommy Lucas, Moisand Fitzgerald Tamayo, Lucas, Tom Wheelwright Organizations: IRS Locations: Orlando , Florida

☆ 3 things you can learn about taxes from San Francisco 49ers' Arik Armstead's paycheck
▼ + stars: | 2023-11-06 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +3 min

Arik Armstead of the San Francisco 49ers at the NFC Championship game against the Philadelphia Eagles on Jan. 29, 2023. While the pay stub showed gross earnings of more than $4 million year to date, experts say it holds lessons for everyday taxpayers. While it's possible to withhold less than you'll owe, you could risk underpayment penalties on top of a sizable income tax bill in April. Max out your 401(k) to save on taxesIn addition to significant tax withholdings, Armstead also maxed out his workplace retirement plan for 2023. But you can reduce your adjusted gross income with pre-tax 401(k) contributions, experts say.

Persons: Arik Armstead, Kevin Sabitus, Sam, Armstead's, Albert Campo, Armstead, Tommy Lucas, Moisand Fitzgerald Tamayo, Lucas, Armstead's withholdings, John Loyd, Max Organizations: San Francisco 49ers, NFC, Philadelphia Eagles, Getty, Finance, Social Security, AJC Accounting Services, CFP Locations: Manalapan , New Jersey, California, Orlando , Florida, Florida, Texas, Fort Worth , Texas

Taylor Swift fans forked out an average $2,183 for a resold ticket to a concert on the superstar's Eras Tour, according to resale research site TicketIQ. Now, ticket resellers may owe taxes on profits made during what may turn to be — for them, at least — a rather "Cruel Summer." Ticket profits have always been taxable, but the new IRS reporting threshold for business transactions on third-party platforms, such as TicketMaster or eBay , is now a single payment of $600, down from 200 transactions worth an aggregate of over $20,000. Taxpayers will have to prepare as the law takes effect this coming season. "Starting at the beginning of next year, you want to make sure you know how to report this income," said certified financial planner and enrolled agent Tommy Lucas of Florida-based Moisand Fitzgerald Tamayo.

Persons: Taylor Swift, Tommy Lucas of, Moisand Fitzgerald Tamayo Organizations: TicketMaster, eBay, Taxpayers Locations: Tommy Lucas of Florida

☆ There's no 'free lunch' with high-interest cash options, advisor says. How to plan for taxes
▼ + stars: | 2023-08-24 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

Savers are now getting higher cash yields after several interest rate hikes from the Federal Reserve. "Everyone thinks it's kind of a free lunch," said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. Falling into the regular tax brackets, ordinary income is less favorable than long-term capital gains. Similarly, taxable money market funds — which typically invest in shorter-term lower-credit-risk debt — and Treasury bills also trigger ordinary income. But Treasury bill earnings aren't subject to state or local taxes.

Persons: Crane, Tommy Lucas, Moisand Fitzgerald Tamayo, you've Organizations: Federal Reserve, Crane Data, Finance Locations: Orlando , Florida

☆ The Mega Millions jackpot hits $1.55 billion. What's the best payout option? Experts weigh lump sum vs. annuity
▼ + stars: | 2023-08-07 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

The Mega Millions jackpot hit a record $1.55 billion on Aug. 7, 2023. VIEW press | GettyThe Mega Millions jackpot has ballooned to an estimated $1.55 billion after months without a winner. If you pass away before collecting all 30 payments, Mega Millions will make the remaining payments on schedule to your designated beneficiary or your estate. Picking the lump sum payout is a 'big mistake'Andrew Stoltmann, a Chicago-based lawyer who has represented several lottery winners, says 95% choose the lump sum option, which he describes as a "big mistake." Tuesday's Mega Millions drawing comes about three weeks after a single ticket sold in California won Powerball's $1.08 billion jackpot.

Persons: Andrew Stoltmann, Tommy Lucas, Moisand Fitzgerald Tamayo Locations: Chicago, Orlando , Florida, California

☆ Mega Millions jackpot hits $1.05 billion. Here's the possible tax bill for the winner
▼ + stars: | 2023-07-31 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

The Mega Millions jackpot soared to $1.05 billion on July 31, 2023. Shannon Stapleton | ReutersThe Mega Millions jackpot has soared to more than $1 billion for the fifth time in the game's history. Currently, the 30-year annuitized payout is worth $1.05 billion, Mega Millions' fourth-largest prize to date. The chance of hitting the Mega Millions jackpot is roughly 1 in 302 million. watch nowHow federal tax brackets workThe Mega Millions jackpot easily pushes the winner into the top federal income tax bracket, which is currently 37%.

Persons: Shannon Stapleton, Tommy Lucas, Moisand Fitzgerald Tamayo, Lucas, that's Organizations: Mega Locations: Orlando , Florida

☆ Nearly 1.5 million taxpayers are 'leaving money on the table' as key tax deadline nears, advisor says
▼ + stars: | 2023-07-12 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

There's a key tax deadline approaching for past-due filers, with an estimated $1.5 billion in unclaimed refunds up for grabs. Nearly 1.5 million taxpayers still have pending refunds from 2019, with a median payment worth $893, according to the IRS. The last chance to file or amend 2019 returns to claim your money is July 17. Filing 2019 returns could yield "thousands of dollars," Lucas said, especially for those claiming the so-called earned income tax credit, a tax break for low- to moderate-income workers. The earned income tax credit is "refundable" because you'll still qualify for a refund when the credit exceeds taxes owed.

Persons: Tommy Lucas, Moisand Fitzgerald Tamayo, Franklin, Lucas, you'll Organizations: Finance Locations: Orlando , Florida

☆ More taxpayers will receive tax forms from apps such as Venmo, PayPal for 2023. Here's how to avoid tax issues
▼ + stars: | 2023-05-23 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +4 min

As a result of the change, more taxpayers are likely to receive Form 1099-K, which reports third-party business payments to the IRS. Some lawmakers are pushing to increase the reporting threshold, so it could change further. However, regardless of the tax reporting threshold, it's important to remember P2P business payments have always been taxable, experts say. Here are some additional tips to consider before the reporting change in January. An accounting system may also make it easier to track business expenses, which may be deducted to reduce taxable income, Guarino said.

Persons: Tommy Lucas, Moisand Fitzgerald Tamayo, Lucas, It's, Jim Guarino, Baker Newman Noyes, Guarino, Adam Markowitz, I've, Markowitz Organizations: Getty, Taxpayers, PayPal, eBay, IRS Locations: Orlando , Florida, Woburn , Massachusetts, Windermere , Florida

☆ If you need more time for your tax return, do this today or 'miss the opportunity,' pro warns
▼ + stars: | 2023-04-18 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Getty ImagesThe federal tax deadline for most Americans is April 18, and there's still time to file for an extension. How to file a federal tax extensionThere are several ways to file a federal tax extension if you can't make the April 18 deadline. You can file Form 4868 electronically via IRS Free File, which provides free guided tax prep software. If you file Form 4868, it's very clear that you know exactly what you're doing. "If you file Form 4868, it's very clear that you know exactly what you're doing," said John Loyd, a CFP and owner at The Wealth Planner in Fort Worth, Texas.

☆ This tax move is a 'game changer' for freelancers and gig economy workers, advisor says
▼ + stars: | 2023-03-31 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

If you're a freelancer or contract worker, there are still ways to lower your 2022 tax bill — including contributions to a retirement plan improved by legislation passed in December. One of the provisions from Secure 2.0 included a change to solo 401(k) plans, designed for self-employed workers (and possibly spouses) or business owners with no employees. Like standard 401(k) plans, there's a deduction for pretax solo 401(k) contributions. But since solo 401(k) account owners can make deposits as both the employee and employer, there's a chance to save more. Before 2022, you needed to open a solo 401(k) by Dec. 31 for current-year deposits.

☆ 3 last-minute moves to lower your 2022 tax bill or boost your refund
▼ + stars: | 2023-03-24 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Getty ImagesThe tax deadline is approaching, and there are still a few ways to reduce your 2022 bill or boost your refund, experts say. However, there are a few last-minute moves to consider before the federal tax-filing deadline, which is April 18 for most Americans. However, you need to consider more than the current year's tax break before making pre-tax IRA contributions, Lucas said. Contribute to a spousal IRAMarried couples filing taxes jointly may also consider a lesser-known option before the tax-filing deadline: spousal IRA deposits. Collectively, annual spousal IRA deposits can't exceed joint taxable income or two times the yearly IRA limit.

☆ How to pay 0% capital gains taxes with a six-figure income in 2023
▼ + stars: | 2023-02-15 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Here's why: The IRS made dozens of inflation adjustments for 2023, including the long-term capital gains brackets, applying to investments held for more than one year. This means you can have more taxable income before reaching the 15% or 20% brackets for investment earnings. Here's your capital gains tax bracketWith higher standard deductions and income thresholds for capital gains, it's more likely you'll fall into the 0% bracket in 2023, Lucas said. The rates use "taxable income," calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income. For example, if a married couple makes $100,000 together in 2023, their taxable income may easily fall below $89,250 taxable income after subtracting the $27,700 married filing jointly standard deduction.

☆ Roth IRA conversion taxes may be trickier than you expect. Here's what to know before filing — or converting funds in 2023
▼ + stars: | 2023-01-22 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

For example, let's say you have a pretax IRA of $20,000 and you made a non-deductible IRA contribution of $6,000 in 2022. Of course, the bigger your pretax IRA balance, the higher percentage of the conversion will be taxable, May said. Alternatively, a larger non-deductible or Roth IRA balance reduces the percentage. But here's the kicker: Taxpayers also use the Form 8606 to report non-deductible IRA contributions every year to establish "basis" or your after-tax balance. Typically, he aims to "fill up a lower tax bracket," without bumping someone into the next one with Roth conversion income.

☆ 5 tax and investment changes that could boost your finances in 2023 amid economic uncertainty
▼ + stars: | 2022-12-31 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +4 min

Bigger contribution limits on retirement accountsIf you're eager to boost your retirement savings, there's good news for 2023: higher contribution limits for your 401(k) and individual retirement account. The contribution limits have also increased for IRAs, allowing you to save up to $6,500 for 2023, up from $6,000 in 2022. Higher income limit for Roth IRA contributionsThe 2023 inflation adjustments also mean more investors may qualify for Roth IRA contributions, experts say. "But how about Roth [IRA] contributions?" While some investors may seek "complicated" moves, like so-called backdoor Roth conversions, which transfer after-tax 401(k) contributions to a Roth IRA, Pon urges investors to double-check Roth IRA contribution eligibility first.

☆ Despite stock market losses, investors may get year-end mutual fund payouts. That can trigger a surprise tax bill.
▼ + stars: | 2022-11-07 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

After a rough year for the stock market, investors may not expect to receive a surprise tax bill from year-end actively managed mutual fund payouts, experts say. When a fund manager sells underlying assets at a profit without losses to offset it, those gains are passed along to investors. And some fund managers sold profitable underlying assets as money has continued shifting from active to passively managed funds. As a result, some investors may see year-end mutual fund distributions, despite stock market losses in 2022, the report found. Lucas said mutual fund payouts often "slip under the radar" and need to be included as part of an investor's year-end tax planning.

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