A new Alabama income tax credit is available for Alabama individuals and businesses that contribute cash to the Alabama Department of Postsecondary Education (ADPE) for qualifying educational expenses directly associated with the state’s Career‐Technical Dual Enrollment Program. The tax credit was created by House Bill 384 (Act No. 2014‐147, the “Act”), which was sponsored by Representatives Buttram, Baker, Collins, and Hubbard. The Bill was signed into law by Governor Robert Bentley on March 11, 2014, and will go into effect for tax years beginning on or after January 1, 2015.
We have had a lot of questions about the particulars about implementing and complying with the law, so we created a handy guide (linked below).
If you have any questions, please feel free to contact any of our CPAs for further explanation.
Beginning at 12:01 a.m. (CST) on Friday August 1, 2014, and ending at twelve midnight on Sunday August 3, 2014, Alabama will hold its 8th annual sales tax holiday giving shoppers in Tuscaloosa County the opportunity to purchase certain school supplies, computers and clothing free of state and local sales tax. Not all cities participate but Tuscaloosa, Northport, Selma, Birmingham do. Here the list of all participating communities.
Here’s the link to ADOR’s website for the Sales Tax Holiday.
We get this question a lot at this time of the year. If your tax return is on extension and you are now preparing the return, can you still make an IRA contribution?
Maybe, but generally the short answer is No. The deadline for making most IRA or Roth IRA contributions is April 15th for the prior year contribution. Extending the return doesn’t change that.
Generally, there is no extension of time to make the IRA contribution, but as with almost every IRA rule there are exceptions.
If you are in a federally declared disaster areas may qualify for an extension in order to complete transactions for their retirement accounts, including making contributions. Check out this list to see if you qualify.
Military personnel in combat zones may qualify for extra time to make IRA contributions. Helpful additional info from the IRS
Here’s the most common exception: SEP IRAs. The due date for establishing and making a SEP IRA contribution is the due date of the business tax return, including extensions. So, any business owner who is having the tax return prepared now, in July, could still establish a SEP plan and make a SEP contribution for last year. Info here & SEP setup forms here
If you have any questions or comments about the information included here, please contact one of our retirement plan specialists (Anita Hayes, Mindy Norton or Sonya Waddell).
Last week, the Supreme Court unanimously ruled that inherited IRAs are not protected in bankruptcy under federal law.
The Court’s decision resolved the bankruptcy question about inherited IRAs in the federal courts, but it does not resolve all questions because state laws also control the bankruptcy protection. Each state’s law is different, here is a site if you want common state bankruptcy exemptions, but this is an overview and isn’t intended to take the place of legal counsel.
This decision could have far reaching ramifications and depending on the circumstances, IRA owners may need to think before deciding which heirs should be IRA beneficiaries upon their death.
The Court’s decision presumably will not affect spousal beneficiaries, though the decision doesn’t state. There are several special rules for spousal beneficiaries in the tax code, including the ability for a surviving spouse to rollover the IRA into their own.
Here’s a summary behind the decision:
The decision was that an Inherited IRA (Roth IRA) is NOT a retirement plan based largely on the following items:
Please contact your JMF accountant or retirement specialist for more information.
Our own Dan Johnson, a JMF supervisor, was one of the speakers at the Alabama Preservation 2014 Conference in Florence Alabama on April 24th. He had the peculiar task of explaining how to file the new Alabama Historic Rehabilitation Tax Credit on the AL tax forms that do not yet exist. This presentation is a creative interpretation of how the AL tax filings for these credits might look, given his experience with the Federal Historic Tax Credit Part 3 certifications of the Qualified Rehabilitation Expenditures and his experience with the filing of the credit on the federal tax return.
Due to recent flooding and tornadoes, the Alabama Department of Revenue has offered taxpayer relief in the federally-declared disasters areas of Baldwin, Blount, DeKalb, Etowah, Jefferson, Lee, Limestone, Mobile, and Tuscaloosa counties, or whose business operations are located in those counties, until Oct. 15, 2014, to file certain Alabama tax returns that have a due date falling between April 28, 2014, and Oct. 15, 2014.
This relief includes:
Late filing and payment penalties will be waived upon request for those affected taxpayers seeking this relief. Alabama’s tax laws have no provision for the waiver of interest.
For the complete release, click here: Alabama Tax Filing Extensions Offered to Storm Victims in Nine Alabama Counties
Given that tomorrow is Tax Day, we figured you might want to know where all of those tax dollars really go. Almost 70% of all funds go to three programs:
Did you also know that the government spent about 25% more money than it collected in 2013?
Here is a great infographic from the Wall Street Journal: