Rollover of Retirement Plans : A Quick Guide !

rolloverWhy rollover of retirement plans? Because Retirement plans have taxation issues at the time of withdrawal . So, when you quit or leave a job, you may have up the options to withdraw funds, but then you will have to pay the tax on the withdrawal . There are two options for you under which you may not be paying tax – either rollover to new employer or rollover to IRA .

. So , if you withdraw from a retirement plan, you might have to pay the tax .   By rolling over, you’re preventing taxation of your savings and therefore the kitty grows further. If you don’t roll over your payment, it will be taxable (other than qualified Roth distributions and any amounts already taxed) . Further, you may also be subject to additional tax unless you’re eligible for one of the exceptions to the 10% additional tax on early distributions.

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5 IRS Tax Tips for Persons Earning Tips Income!

tax tipsInternal Revenue Code tax tips same way it treats any other income under the principle that all receipts are income unless clearly provided that an income is not taxable. Tips receipts by employee are taxable income under IRC . US tax law  requires that employers in certain sectors like food and restaurant , bars, casino where it is custom to tip the employee to submit an annual report about the tips . From the information out of such report , IRS can compare the tips reported in the W2 to find out unreported tips . Therefore , it is legally important to tell the employer about the tips received by the employee. Please note that not only the tip receipt is taxable income , it is also subject to Social Security and Medicare tax withholding. So, every time one under reports , he/she also prevents unlawfully withholding tax on such income .

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