QCD

A QCD stands for a qualified charitable distribution out of an IRA plan for an owner that is at least 70 1/2. You are allowed to contribute up to $100,000 and it counts towards your required minimum distribution. To the extent of the QCD you have neither taxable income or a deductible charitable donation. To be qualified you have to give the donation to a qualified charitable organization organized in the U.S. A donor advised fund may not qualify for the QCD.

The Deduction for Real Estate taxes

In general real estate taxes can only be deducted by the owner of the property. Penalties and interest on late payments are not deductible. Taxes paid in escrow are not deductible until actually paid to the taxing authority. When you sell real estate the property tax is prorated for the time you owned the property on the closing statement and that is the portion you can deduct.

The Hidden Tax on Social Security Benefits

Until 1984, social security benefits were exempt from federal income tax. In my opinion this is the way it should have remained since the payment of social security tax was not ever deductible. However in 1984 and again in 1993 the democrats changed the rules to make a portion of the benefits up to 85% taxable.  In general if your income plus 1/2 of your social security benefits is less than $25,000 if you are single or $32,000 if your file jointly then there will be no taxable social security benefits. Between $25,000 and $34,000 if single and between $32,000 and $44,000 if joint, then up to 50% of the social security benefits are taxable. Over the $34,000 and $44,000 amounts then up to 85% is taxable. This effect causes marginal tax rates to go haywire when additional income pushes you above these thresholds. It is even worse if you file married filing separately because 85% of the social security benefits are taxable, and you skip the lower income thresholds.

Why You Shouldn't Wait To File Your Tax Return

The main reason you shouldn't wait is that after the original due date has passed, it becomes a guessing game on how much tax you owe. The game comes with a penalty if you haven't paid in all the tax you owe by April 15 of .5% of the unpaid amount per month up to 25%. There is also interest of 4% on an annual basis. These are only the federal penalties and interest. Georgia interest on unpaid tax is 7% on an annual basis. If you have been paying quarterly estimated taxes, then you should continue for 2017 without the benefit of knowing the safe estimate based on 2016 tax. The bad guys can have more time to get a fake refund using your social security number if you haven't filed your return. Finally don't you just feel better getting it done?

Failure to Take the Required Minimum Distribution (RMD) from Retirement Accounts

The penalty is 50% of the amount that should have been distributed. You should always try to get relief from this RMD penalty by filling out form 5329 with a reasonable cause for the failure such as illness, old age, memory problems or no reminder from the trustee. Also indicate that you have taken steps to remedy the situation by taking the distribution in question or setting up automatic withdrawals. This is one area where the IRS is usually pretty lenient.