SECURE 2.0 Act and Quirky Retirement Contributions
As every year, allowable retirement contributions have been increased for 2025. Specifically these are the increased maximum contributions: 401(k), 403(b), and Governmental 457 Plans Employee Contribution Limit: Increases to $23,500. Catch-Up Contributions for Ages 50 and Over: Remains at $7,500, allowing a total contribution of up to $31,000 for [...]
Is a Mega Back Door Roth Right for You?
The Mega Backdoor Roth: A Strategy for High-Income Savers Buckle in for this one because it's a bit confusing and requires certain plan elements for you to even be eligible. But for high-income earners looking to maximize retirement savings, the Mega Backdoor Roth IRA is a powerful, albeit lesser-known, strategy. [...]
2024 Year End Tax Planning
Incredibly 2024 is a mere 45 days from being over. I'm not exactly sure how that happened but the calendar tells me it's so. At Woods & Associates this time of year is busy with tax projections and planning reviews. If you would like to determine if your tax liabilities [...]
Bank and Financial Fraud
We have seen a steadily increasing volume of bank and financial fraud with our clients. The form and sophistication of the fraud is worrying and my expectation is that these activities will continue to grow in both frequency and scope. I recently attended an informational session hosted by M&T [...]
Tax Filing Due Date 2024
Happy March! I hope all of you in Maryland and the Mid-Atlantic region have been able to enjoy the recent sneak peek of spring weather. As you know from our engagement letters, we have an internal deadline of March 15, 2024 to receive client tax documents. If client documents are [...]
Tax Filing Season
The IRS window for filing 2023 income tax returns opened on Monday, January 29, 2024. Most of you will not yet have received all of your tax documents but that officially kicked off this year’s filing season. Of course, Congress has decided “Not so fast!” by deliberating a tax bill [...]
Short Term Rentals as a Tax Saving Vehicle
Probably the most common question we get surrounding tax reduction strategy is “what if I bought a rental property?” As with most things in the tax code, our response is “it depends”. By default, rental properties are deemed passive activities rather than active. As such, limitations on losses are in [...]
Beneficial Ownership Information-Filing Requirement
As some of you have no doubt heard, there is a new reporting requirement for many companies beginning January 1, 2024. The “Beneficial Ownership Information” (BOI) was a part of the 2021 Corporate Transparency Act (CTA) enacted by Congress. This filing will be administered by the Financial Crimes Enforcement [...]
To LLC or Not?
Perhaps the most common question we get by clients starting a business or even just a side hustle is “Do I need an LLC?” My general response is that from a tax perspective it simply doesn’t matter most of the time. What is an LLC? A Limited Liability Company (LLC) [...]
Beware of the ERC
The Employee Retention Credit (ERC) is a COVID response program that was rolled out to employers as it relates to 2020 and 2021. Initially, it took a back seat to the more immediate Paycheck Protection Program (PPP) but due to some Congressional tweaks it became a far more attractive [...]
Withholding is NOT Your Tax
One of the most commonly misunderstood issues that our clients face is withholding on bonus wages, equity compensation and the like. Essentially any non-salary income that is included in the recipients W2 wages. We see this all the time and there is a lot of confusion surrounding this type [...]
RMD Changes
The SECURE ACT 2.0 was signed into law in late 2022 and became effective January 1, 2023. Unfortunately, this new law further complicates an already complicated set of rules, particularly as it relates to required minimum distributions (RMDs). Prior to the changes spelled out in SECURE Act 2.0, RMDs [...]
Happy Holidays
Another year over, and a new one almost begun–happy holidays from the Woods team to you and your loved ones! As we move past the worst of the pandemic, we continue to reflect on all the good fortune we have experienced over the years. Our firm continues to grow and [...]
I Bonds
As we've all no doubt noticed, inflation has reared it's head in the US for the first time in many years. Because of that Series I Bonds have become a hot topic on social media and various finance articles I've read. Below is a who, what, where, and when on [...]
Happy 2022!
I hope all reading had a great holiday season and wish everyone a healthy and prosperous 2022. After 2 years of bizarre, seemingly never-ending tax seasons, we hoped for a return to normalcy this winter and spring. Alas, it does not appear Congress will keep up their end of the [...]
Happy Holidays from The Woods Financial Services Team!
Happy holidays to you and yours! As 2021 closes out, we continue to be so thankful for our clients and associates here at Woods Financial Services. It has been our great fortune to remain in the office during the past two years amidst the pandemic, serving you during this [...]
Year End Tax Planning and Possible SALT Legislation
November is the time of year when we are busy doing year end tax projections for many of our clients. As has been the case of late, this year is complicated by pending legislation in Congress. This seems to have been the case for the last 4 or 5 years. [...]
ROTH IRAs-To Convert or Not?
ROTH IRAs and conversions from Traditional IRAs have been getting a lot of press recently. This discussion has clearly piqued the interest of our clients, as we have received many questions about the process and tax implications. This interest is exacerbated by pending legislation likely to curtail common strategies employed with ROTHs. Here are my thoughts on the current and possible state of ROTHs.
The IRS is a Hot Mess
I'm stealing this blog post title from a Washington Post column of the same name (behind a paywall): THE IRS IS A HOT MESS! This probably isn't a surprise. The IRS has been teetering on the edge of mess status for a number of years. But the double whammy of [...]
Advance Child Tax Credit-Opt Out?
Starting July 15, 2021, the IRS will start issuing advance payments on taxpayers' 2021 Child Tax Credit. Taxpayers do not have to do anything to start receiving these advance payments over the next 6 months. However, there is an option to opt out of the advance payments and simply [...]
Tax Filing Date Pushed Back
After resisting professional and congressional pressure to delay the Federal tax filing due date, IRS Commissioner Charles Rettig relented last week and announced that individual returns and 2020 tax payments are now due May 17, 2021. While not as much additional time was granted as last year, the delay does [...]
COVID Relief Bill #3
Before I get into the specific provisions of the bill a few notes about our service delivery this filing season. All of these changes so late in the filing season, coupled with the scope of work our staff has done with clients on PPP applications and forgiveness, state grant applications, [...]