Tag Archives: IRS

How long to keep IRA paperwork for taxes?

Question: We have been keeping all our IRA documentation since the IRS guidelines (to my understanding) say that you need to keep it forever. However, withdrawals from the IRAs that we have are all taxable income, so why is it necessary to keep the very old statements?

Answer: Record-keeping requirements are stringent for traditional IRAs, whose contributions are generally tax-deductible on the way in while withdrawals are taxable on the way out. “The paperwork you keep is to validate your claim of what’s taxable and what isn’t,” says Greg McBride, chief financial analyst for Bankrate.com

Those particulars will vary with your individual situation. If you and your spouse, if applicable, never had access to a workplace 401(k) or equivalent while you were contributing to your traditional IRA, then that standard tax treatment should apply and you will owe taxes on the withdrawals.

If you’re certain that all of your contributions were deductible on the way in, then you don’t have to keep meticulous paperwork, McBride says. After all, you’ll be paying taxes on everything in that scenario, and the Internal Revenue Service (IRS) certainly won’t quibble with that. Continue reading How long to keep IRA paperwork for taxes?

Some Tax Facts for Donald Trump from Warren Buffett

OMAHA, Nebraska –(BUSINESS WIRE)–Answering a question last night about his $916 million income tax loss carryforward in 1995, Donald Trump stated that “Warren Buffett took a massive deduction.” Mr. Trump says he knows more about taxes than any other human. He has not seen my income tax returns. But I am happy to give him the facts.

My 2015 return shows adjusted gross income of $11,563,931. My deductions totaled $5,477,694, of which allowable charitable contributions were $3,469,179. All but $36,037 of the remainder was for state income taxes.

The total charitable contributions I made during the year were $2,858,057,970, of which more than $2.85 billion were not taken as deductions and never will be. Tax law properly limits charitable deductions.

My federal income tax for the year was $1,845,557. Returns for previous years are of a similar nature in respect to contributions, deductions and tax rates.

I have paid federal income tax every year since 1944, when I was 13. (Though, being a slow starter, I owed only $7 in tax that year.) I have copies of all 72 of my returns and none uses a carryforward.

Finally, I have been audited by the IRS multiple times and am currently being audited. I have no problem in releasing my tax information while under audit. Neither would Mr. Trump – at least he would have no legal problem.

Contacts

Warren E. Buffett, 402-346-1400
Omaha, Nebraska

Panama Papers Exposes Global Double-Standards

Political Leaders, Criminals, Celebrities are all in there when it comes to evading taxes and hiding wealth illegally in offshore locations. The Panama Papers are a giant leak of more than 11.5 million financial and legal records exposes a system that enables crime, corruption and wrongdoing, hidden by secretive offshore companies. The key entity at the center of this expose is Mossack Fonseca, having 56,200 active offshore companies as of Dec 2015, and having offices worldwide to facilitate the “wealth management”. Files show client roster that includes drug dealers, Mafia members, corrupt politicians and tax evaders. Ordinary citizens are chased by Govt for even $100 of tax outstanding, and here we have millions and billions of dollars sitting at offshore locations completely avoiding any taxes. Hopefully IRS will take a serious look. If Govts worldwide really decide to act on the names that have come out, there are enough details on the transactions in various offshore companies. But will the global elite act against itself? Very unlikely. Read more here…