You’ve probably all heard that the tax deadline has been extended from April 15th to May 17th. Any payments due for the 2020 tax year are also due at that time. Your quarterly estimated payments for 2021 are still due on the regular schedule. The first quarterly will be due April 15th.
Many of you take the standard deduction on your tax returns and because of that could not take advantage of the charitable contributions deduction. The Covid relief bill has changed that and now you are able to deduct up to $300 of charitable contributions both for 2020 and 2021. A small amount but will put a little more money in your pocket.
If you have not yet filed and you did not receive your 1st and 2nd Covid stimulus payments or received a reduced amount, you can take the Recovery Rebate Credit when filing your 2020 income tax return and recoup these amounts.
If you are near retirement age here are some points to remember regarding your IRA’s:
- The total amount of “all” your IRA’s will determine your RMD (Required Minimum Distribution). Example: You have one IRA worth $100,00 and another worth $150,000 and one more worth $50,000. Your total IRA value will be $300,000 times the minimum RMD of 4%, or $12,000 annually.
- Your IRA/IRA’s may have had non-deductible contributions. These will need to be tracked. The non-deductible contributions create what is called tax basis. When you take your distribution, this amount is taken tax free. You can calculate your non-deductible contributions by reviewing past years filing of form 8606, Non-deductible IRA’s.
- If you take any distributions from your IRA before age 59 ½, you will have a 10% penalty on the amount taken.
- You can also be penalized when you take your Roth distribution if the account has been open for less than five years.
Lifestyle Tip
The Breath. How important is the breath? We are alive because of it and we can enhance our vitality and well being by practicing breath exercises. One key element – Breath through the Nose. Why? Many hormones that are beneficial are triggered by breathing through the nostrils. The Sioux Indian tribe, when watching their babies drift to sleep, would pinch their mouths close to encourage the habit of breathing through the nose. They knew that vitality and energy come from nostril breathing. A very inspiring and informative book is “Breath, The New Science of a Lost Art”, by James Nestor. You will love this book for its informative journey about the power of the breath. The breath is closely related to the functioning of the mind. Here’s a simple practice that takes only 15 seconds to do! Whether sitting or standing and you feel scattered and/or brain fogged, Inhale and hold the breath for 15 seconds. Then exhale. The power of this exercise is that it resets the “mind”. Fruitful breathing to you all!
Trillium flowers are now blooming on the Ridgeline trail system. I took this photo yestesday on a hike up Spencer’s Butte.
I am always available for your questions. You can contact me by emailing or phoning:
Email: [email protected]
Phone: 541-515-6468
My new address for drop offs is:
2572 Spring Blvd.
Eugene, Oregon 97403-2523
Visit my website for more details on how I serve individuals, small and medium size businesses, and non-profits: gurumukhcpa.com
Stay safe and well!
Kind Regards,
Gurumukh
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