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« Archive for the ‘Tax’ Category

Obama’s Proposed Budget May Not Have The Tax Effect You Were Anticipating

For all the clamor and criticism over the proposed tax increases included in President Barack Obama’s 2013 fiscal year budget, there is likely to be little or no effect on federal tax payments made by many of the millions of Americans who earn between $200,000 and $1 million annually.

The Smart Way To Give Stuff Away

A few Saturdays ago, my boyfriend and I did what a lot of people do at the end of the year: pulled a bunch of dusty stuff out of his basement and drove it to Goodwill. Not only would this keep stuff out of a landfill, but he would take the tax deduction for his […]

Let’s Ditch The Mortgage Deduction, Too

There’s a lot of talk about putting an end to Fannie Mae and Freddie Mac — the federal government’s biggest involvement in the mortgage market. But what about the mortgage deduction? The ability to deduct the interest you pay on your home loan has long been portrayed as one of the two, great middle-class tax […]

A Tax Deduction For Interest Income?

Lance Dickie, an editorial writer at the Seattle Times, has an idea for how “Congress and the Obama administration can help rebuild household solvency by rewarding savers. “Adjust IRS rules so the first $1,000 of interest income is not subject to taxes. Allow tax filers to deduct a grand from their tally of interest earned. […]

Buy A Home, Get A Tax Credit

Congress has extended the popular tax credit for first-time homebuyers and created a new tax break for homeowners looking to trade up. When President Obama signed the Worker, Homeownership, and Business Assistance Act of 2009 into law last week there was anaudible sigh of relief from the real estate industry. The first-time buyers’ tax credit […]

First-Time Buyers’ Tax Credit Expiring

Time is running out to take advantage of the first-time homebuyer tax credit. To qualify you must close on your purchase before Dec. 1. If you don’t have a sales contract in hand, and mortgage application in the works, by mid-October you’ll be racing to meet that deadline. The homebuyer’s tax credit has been a […]

Save big with the new energy tax credits

If you’re planning to renovate your home, Congress included some valuable new tax breaks in the economic stimulus bill it passed this winter. Unlike a deduction, which reduces the gross income used to calculate how much you owe, a credit comes right off the bottom line of your tax bill. So while a $1 deduction […]

You know things are bad when…

…The IRS starts taking pity on us. You almost have to cringe when IRS Commissioner Doug Shulman says: “The IRS will do everything it can to help during these tough times.” But the Internal Revenue Service says it will be more lenient with taxpayers who are struggling to make their payments. The new policies apply […]

A new type of trust may be able to solve many estate planning problems

Many wealthy Americans today are worried about what will happen to their estates after they are gone. Although many different types of trusts have been designed to help alleviate this problem, a new type of trust, called the “inheritor’s trust” has a level of flexibility that is unmatched by other estate planning vehicles. This type […]

Reduce your taxes with municipal bond swaps

Every year, millions of Americans file their 1040s and end up having to pay taxes, even after all possible deductions have been taken. Many are able to itemize, while others are eligible for dependent care credits or above-the-line deductions for their retirement plan contributions. But those who have enjoyed short-term market gains or other investment […]

Can You Actually Increase Your Tax Bill With Your Deductions?

As a diligent taxpayer, you probably keep good records so you can make the most of itemized deductions when you or your accountant fills out your tax return. Did you realize though, that those deductions might expose you to an entirely different set of rules that could result in additional taxes? The alternative minimum tax […]

Understanding the Probate Process

You’ve worked hard all of your life to provide for your family and loved ones. Now you can relax, knowing that they will be taken care of once you’re gone. Or will they? If you are assuming that your assets and personal effects will automatically go to your spouse, you may be in for a […]

Avoid paying penalties on your withdrawals

Millions of Americans that save money in their IRAs or qualified plans have no intention of withdrawing that money until after they reach age 59 ½. Unfortunately, there are times when circumstances dictate that this is absolutely necessary. Any number of of misfortunes, such as medical expenses from an uninsured accident or an extended period […]

Choose long-term equity indexed annuities wisely

The last several years have seen an explosion in the equity-indexed annuity arena, with a growing number of companies offering more and more products in this category. But while these hybrid annuities can provide many benefits to investors for whom they are suitable, they can also pose some risks to those that do not understand […]

1035 Exchanges Avoid the Tax Man

Like most other Americans that are saving for retirement, you probably need to make adjustments in your investment or retirement portfolio from time to time. Of course, making these changes will have tax consequences, unless they happen inside a tax-deferred account or plan. However, if you own any type of life insurance or annuity, then […]

Reduce Your Capital Gains Distributions with UITs

For many investors looking for higher returns and portfolio diversification, mutual funds are ideal investments. They offer a combination of professional management, liquidity and reduced volatility that makes them excellent vehicles for both growth and income investors. However, some investors follow simpler investment strategies that do not require active portfolio management, and therefore do not […]

Your Tax Rebate Check: Overview of the 2008 Stimulus Package

As most of you have heard by now, the government has decided to send you some money in the hopes that you’ll spend it and help stimulate the economy. Unfortunately, many people are already committing themselves to flat-screen TV’s and vacations in Tahiti based on myths and misinformation about the size of their tax rebates. […]

Tax Efficiency & Mutual Funds

Educated investors often look at a number of features of mutual funds, such as sales charges, beta, alpha and other technical characteristics. But one factor that is often overlooked is how tax-efficient the fund is. A tax-efficient investment is one that can be reasonably expected to produce favorable tax consequences. For example, a 401(k) or […]

Divorce & Taxes

If you’re getting divorced, you have many issues to contend with, not only emotionally and relationally, but logistically and financially as well. Although much of the anguish from divorce is inescapable, some of the financial pain from this process can be alleviated with proper planning and cooperation between former spouses.

When Is Your SSI Taxable?

Although there can be many reasons why your taxes this year could be higher than you expect, such as having to report a capital gain or taking a lump-sum retirement plan distribution, one of the major culprits of this problem can be the income you draw from social security. When social security began back in […]

Roth IRA Distributions AREN’T Always Tax-Free

Typically most Roth IRA distributions are tax-free. But there are a few exceptions to this rule, one of which can apply even after you have reached age 59 ½. While these exceptions are not very common, Roth IRA owners should be aware of them and when they apply.

How Health Savings Accounts Work

Health Savings Accounts are a relatively new type of medical savings account that allows for both tax-deductible contributions and tax-free distributions as long as the money is used to pay for qualified medical expenses. Perhaps best of all, any unused funds in these accounts can eventually be withdrawn as retirement income. HSAs can therefore provide […]

Can You Deduct Your IRA Contribution?

You may be participating in a 401(k) or other type of employer-sponsored retirement plan. In addition to this, you may also be putting money away in a Traditional IRA. Although contributing to two retirement savings vehicles at once is commendable, you may actually be costing yourself at least part of the tax deduction you would […]

Tax Shelters for Small Business Owners (Part 2)

Two of the most classic phrases you hear thrown around by water-cooler tax experts are the “home-office deduction” and “writing off your equipment.” Everyone who knows nothing will insist that you can write-off just about every inch of your home, as well as your laptop, just because you return business emails from your couch. While […]

Tax Shelters for Small Business Owners (Part 1)

It happens every year at this time. I start seeing emails from small business owners asking if there is any way to “shelter their business income from taxation.” Usually, this question comes from newer business owners who are accustomed to having Federal income tax withheld from their paychecks as employees, but failed to do it […]