Early Distributions From Retirement Plans

Written by Richard A. Chapo


Continued from page 1

Ifrepparttar early distribution from an employer’s plan is paid directly to you, your plan administrator will normally withhold income tax at a 20 percent rate. If you roll overrepparttar 148229 distribution to a new plan, you must replace that 20 percent ofrepparttar 148230 funds that were withheld and deposit that amount inrepparttar 148231 new plan or you will owe taxes on that amount. To avoidrepparttar 148232 inconvenience of this withholding, you can have your old plan’s administrator transferrepparttar 148233 rollover amount directly torepparttar 148234 new plan or a traditional IRA.

All early distributions must be reported torepparttar 148235 IRS. You will report tax-free rollovers on lines 15a and 16a of Form 1040 along with any taxable distributions, but you will enter on line 15b or 16b onlyrepparttar 148236 taxable amounts you don’t roll over.

Early distributions from retirement plans can involve complex tax issues. Make sure you understandrepparttar 148237 issues or get competent tax advice.

Richard Chapo is CEO of Business Tax Recovery - Obtaining tax refunds for small businesses for overpaid taxes. Discovery tax strategies and deductions in our tax articles section.




IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters

Written by Richard A. Chapo


Continued from page 1

Ifrepparttar Justice Department concurs, it files suit againstrepparttar 148228 promoter requesting thatrepparttar 148229 court orderrepparttar 148230 promoter to refrain fromrepparttar 148231 fraudulent activity. Depending onrepparttar 148232 facts and circumstances ofrepparttar 148233 case,repparttar 148234 court may issue a temporary restraining order, a temporary injunction or a permanent injunction.

At present,repparttar 148235 courts have issued injunctions against 99 abusive scheme promoters –– 81 permanent injunctions and 18 preliminary injunctions. They have issued permanent injunctions against 17 abusive return preparers. The Justice Department has filed an additional 49 suits seeking injunction action –– 28 against scheme promoters and 21 against return preparers.

The IRS is currently investigating more than 1,000 additional promoters for possible referral torepparttar 148236 Justice Department and conducting individual examinations on thousands of tax scheme participants.

Richard Chapo is CEO of Business Tax Recovery - Obtaining tax refunds for small businesses for overpaid taxes. Discovery tax strategies and deductions in our tax articles section.


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