EDH Tax Solutions

If you don't file a tax return, you don't receive a tax refund. If you are due a refund, but you don’t file, simply put, you will not get the refund. This applies to federal, as well as most states with an income tax. You have three years to file your federal return, but after that you lose the opportunity to claim your refund.

The CARES Act waived required minimum distributions from IRAs and retirement plans for 2020. On top of this, early withdrawals taken in 2020 due to COVID hardships will not be subject to the 10% early withdrawal penalty (if certain conditions are met). In order to avoid the 10% penalty, the distributions must have been made to a qualified individual from an eligible retirement plan between Jan. 1 - Dec. 31, 2020, and must be $100,000 or less in aggregate.... A qualified individual is "anyone who has been diagnosed by a test approved by the CDC or has experienced adverse financial consequences due to being quarantined, furloughed, or laid off; having work hours or pay reduced; having been unable to work due to a lack of child care; having owned or operated a business that has been closed; having had a reduction in self-employment income; or having had a job offer rescinded or a start date delayed. An individual also qualifies if his or her spouse or a member of his or her direct household has experienced any of the above." Additionally, a qualified individual is not required to demonstrate a true need for the funds in order to take advantage of this provision. As long as an individual has experienced adverse financial consequences for any of the reasons above, an early distribution is allowed.

If you have an FSA account, the limit for tax-free contributions has been increased to $2,750 for 2020.

The IRS budget for 2021 is about $12B. That means the entirety of IRS operations could be funded this year with just the money they charge individuals and small businesses in penalties. Penalties for: - Failure to file a tax return - Failure to pay taxes by the time they were due - Failure to deposit payroll taxes in a timely manner... All of these penalties are completely avoidable with the right help. Sometimes you just need to ask for it.