The 2019 tax season has proved to be more complicated and confusing than previous years, thanks in large part to the implementation of changes from the Tax Cuts and Jobs Act. Luckily, a team of CPAs has been on hand to answer your questions.
To help you get the help you need, we’re rounding up some of the best advice our experts have doled out and presenting them for easy access. First up: your questions about IRAs and other retirement-related tax matters.
How your IRA contributions will affect your taxes
Donna Cuiffo, tax partner at Clarfeld Financial Advisors, explains the guidelines for IRA contributions around tax season, and the last-minute tweaks you can make on your return right up until tax day.
Cuiffo also addresses concerns about whether contributing to an IRA could trigger an audit. There’s good news: She says that “one has nothing to do with the other.”
How to report IRA conversions on your taxes
Ebong Eka, a CPA with EKAnomics Tax Relief, helps clear up confusion over reporting IRA conversions on your taxes. “One reason why you would convert a traditional IRA to a Roth IRA is that your income level has dropped in the current year,” Eka says, explaining that eligibility for a Roth IRA is based on income.
How your 401(k) impacts your taxes
And finally, CPA Lydia Vercelli discusses the huge benefit taxpayers can reap by making the maximum 401(k) contribution to lower taxable income.
“401(k) contributions are pre-tax contributions, and what that means is that any amount that you contribute towards your 401(k) is taken out of your gross income,” Vercelli says. The more you contribute, the lower your taxable income will be.
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