The Pension Protection Act of 2006 contained a provision allowing nonspouse beneficiaries to roll over funds from an employer pension plan to an inherited individual retirement account (IRA), starting in 2007. This was viewed as a significant development for nonspouse beneficiaries, who would be able to extend distributions from employer pension plans over their life expectancies rather than the typical five-year period imposed by most plans.

Continue reading "Asset Transfers by Nonspouse Beneficiaries" »

Posted by Nickie - Editor at 7:10 AM | Permalink

The tax laws regarding withdrawals from individual retirement accounts (IRAs) are complex. To avoid unnecessary penalties and to ensure you withdraw the funds efficiently, here are the basics:

Continue reading "Withdrawals From Your IRA" »

Posted by Emma - Editor at 7:00 AM | Permalink

In 2008 to 2010, the capital gains tax rate for individuals in the 10% or 15% tax bracket will be 0% (down from 5% previously). After 2010, the rates will revert to pre-2001 rates, unless further legislation is passed. Who will benefit from this reduction?

Continue reading "Taking Advantage of the 0% Capital Gains Tax" »

Posted by Nickie - Editor at 7:01 AM | Permalink

With tax season right around the corner, many income tax preparation companies are getting ready for the busy season of filing taxes to begin. Well known companies like Jackson Hewitt and H & R Block have been around for years, and compared to small, privately owned tax preparers, they are unique. One thing that makes these types of companies unique is the fact that they offer quicker ways for you to receive your money.

Continue reading "Rapid Refund Income Tax Loans: Are They Worth the High Fees?" »

Posted by Mike - Editor at 8:30 AM | Permalink

The Small Business and Work Opportunity Tax Act of 2007, signed into law on May 25, 2007, raised the age limit for application of the “kiddie tax” to all children under age 19 (previously age 18) and to students under age 24, effective for tax years beginning after May 25, 2007. Just last year, the “kiddie tax” age limit was raised from under age 14 to under age 18. There is an exception to these new age limits. If the earned income of an individual over age 17 exceeds half of his/her support, the “kiddie tax” does not apply. Scholarships are not considered a part of this test.

Continue reading ""Kiddie Tax" Age Gets Raised" »

Posted by Emma - Editor at 10:33 AM | Permalink

With the real estate market slowing, more taxpayers may find themselves in a situation where the sale of their home results in a tax loss or their net sale’s price is less than the amount of their outstanding mortgage.

Continue reading "Selling Your Home at a Loss" »

Posted by Nickie - Editor at 6:40 AM | Permalink

When converting a traditional individual retirement account (IRA) to a Roth IRA, transferred amounts must be included in income if taxable when withdrawn (e.g., contributions and earnings in traditional IRAs and earnings in nondeductible IRAs), but are exempt from the 10% federal income tax penalty. Your adjusted gross income (AGI) cannot exceed $100,000 in the conversion year, excluding any converted amounts.

Continue reading "Undoing a Roth Conversion" »

Posted by Nickie - Editor at 7:00 AM | Permalink

If you answer that question by looking at the tax rate tables that show income tax rates of 10%, 15%, 25%, 28%, 33%, and 35%, you could be understating your real marginal tax rate. Your marginal tax rate could be higher due to numerous provisions that phase out or limit certain deductions, credits, and other tax benefits. Some of the more significant provisions include:

Continue reading "Figuring Out Your Real Marginal Tax Rate" »

Posted by Emma - Editor at 10:08 AM | Permalink

Most of life’s major financial decisions have tax ramifications. Major life events such as marriage or divorce, the birth or adoption of a child, the purchase or sale of a home, and retirement all have tax ramifications. Keep the following tax-planning tips in mind as you encounter those events:

Continue reading "Tax Planning for Major Life Events" »

Posted by Nickie - Editor at 6:52 AM | Permalink

Tax laws and regulations are as easy to decipher and understand as a foreign language. When trying to evaluate whether your moving expenses are deductible on your income tax return there are a few tests you will need to pass.

Continue reading "Moving Tax Deduction: How Do I Qualify?" »

Posted by Mike - Editor at 8:03 AM | Permalink

During periods of uncertain returns, it becomes even more important to consider other ways to increase your portfolio’s value. One of those strategies is to invest in a tax-efficient manner.

Continue reading "Investing in a Tax-Efficient Manner" »

Posted by Nickie - Editor at 8:02 AM | Permalink

While section 529 plans always had significant tax benefits, there was concern because many of those benefits were scheduled to expire after 2010. However, the Pension Protection Act of 2006 made many section 529 plan provisions permanent. Thus, if you are looking for a way to fund your child’s college education, you should definitely take a look at section 529 plans. Consider these basic facts about section 529 plans:

Continue reading "Benefits of Section 529 Plans" »

Posted by Emma - Editor at 1:47 PM | Permalink

The Pension Protection Act of 2006 contained a provision allowing nonspouse beneficiaries to roll over funds from an employer pension plan to an inherited individual retirement account (IRA), starting in 2007. This was viewed as a significant development for nonspouse beneficiaries, since they would be able to extend distributions from employer pension plans over a longer period. However, recent guidance by the Internal Revenue Service (IRS) indicates that this provision may be difficult for nonspouse beneficiaries to implement.

Continue reading "Rollovers for Nonspouse Beneficiaries" »

Posted by Emma - Editor at 2:57 PM | Permalink

Starting in 2010, all taxpayers, regardless of the amount of their adjusted gross income (AGI), can convert a traditional individual retirement account (IRA) to a Roth IRA. Before 2010, your AGI cannot exceed $100,000 to convert, not including any income resulting from the conversion. Amounts converted must be included in income if taxable when withdrawn (i.e., contributions and earnings in deductible IRAs and earnings in nondeductible IRAs), but are exempt from the 10% early withdrawal penalty.

Continue reading "Planning for 2010 Roth Conversions" »

Posted by Nickie - Editor at 1:05 PM | Permalink

Are you confused about plan limits? This quick reference for 2007 should make your savings planning a little simpler.

If you do not know which plans may be best for your business structure, or what plans you are eligible to use, consult with a qualified advisor for assistance. They will also be able to do a comparison of your individual options.

Remember the maximum allowable compensation that can be used to determine plan contributions in 2007 is $225,000. For highly compensated employees, the ceiling is a much lower $100,000.

Continue reading "2007 Tax Favored Savings Plan Updated Limits Summary" »

Posted by Mike - Editor at 9:31 AM | Permalink

Intuit (INTU), the Mountain View California based maker of the hugely popular TurboTax, Quickbooks, and Quicken software titles announced this month a new collaboration with The Kiplinger Washington Editors, Inc.

Continue reading "Intuit Teams Up With Kiplinger" »

Posted by Mike - Editor at 5:01 PM | Permalink

The alternative minimum tax (AMT) was originally designed to ensure wealthy taxpayers paid at least a minimum amount of tax. However, due to the tax calculation, more and more taxpayers are becoming subject to the AMT. For instance, 3.6 million taxpayers paid the AMT with their 2005 tax returns, with that number projected to increase to 30 million, or 20% of all taxpayers, by 2010.

Continue reading "Who Is Affected by the Alternative Minimum Tax" »

Posted by Nickie - Editor at 8:49 AM | Permalink

While many strategies can help you reduce your income tax bill, those strategies basically fall into three main techniques: reduce or eliminate taxes; postpone the payment of taxes until sometime in the future; and shift the tax burden to another individual.

Continue reading "Tax Planning Strategies" »

Posted by Emma - Editor at 11:34 AM | Permalink

To attract and keep top employees, more companies are offering them employee stock options. If you receive employee stock options as part of your compensation package, careful planning can help you make the most of them.

Continue reading "Considering Your (Stock) Options" »

Posted by Mike - Editor at 9:03 AM | Permalink

Capital gains on investments held for one year or less are short-term capital gains taxed at ordinary income tax rates. For investments held over one year, the maximum long-term capital gains tax rate is 15% (5% for taxpayers in the 10% or 15% tax bracket). While this is significantly below the maximum ordinary income tax rate of 35%, it still can take a significant chunk out of your investment portfolio.

Continue reading "Utilizing Losses in Your Portfolio" »

Posted by Nickie - Editor at 7:57 AM | Permalink

How earnings are taxed on investments depends on whether the investments are held in a taxable or tax-deferred retirement account.

Continue reading "Deciding Where to Hold Investments" »

Posted by Mike - Editor at 8:54 AM | Permalink

The subject of income taxes is one that most people would prefer to ignore. However, since income taxes are a significant expense for most taxpayers, you should come to grips with some basics about taxes:

Continue reading "Basic Facts about Taxes" »

Posted by Mike - Editor at 6:54 PM | Permalink

As life expectancies continue to increase, it becomes increasingly likely that you may need to financially help an aging parent. If you find yourself in that situation, review the tax laws to determine whether you can obtain some tax relief.

Continue reading "Tax Strategies and Caring for Elderly Parents" »

Posted by Mike - Editor at 12:43 PM | Permalink

If you’re looking for ways to reduce your income tax bill, you may want to consider the following tax-saving strategies:

Continue reading "10 Tax Strategies to Consider" »

Posted by Mike - Editor at 1:48 PM | Permalink

With tax planning, the goal typically is to delay the payment of income taxes. Thus, it can be difficult to understand why it might make sense to convert a traditional Individual Retirement Account (IRA) to a Roth IRA, which results in the current payment of income taxes.

Continue reading "Consider an IRA Conversion" »

Posted by Mike - Editor at 2:23 PM | Permalink

One of your portfolio’s largest expenses is probably taxes. Ordinary income taxes on short-term capital gains and interest income can go as high as 35%, while long-term capital gains and dividend income are taxed at rates not exceeding 15% (5% if you are in the 10% or 15% tax bracket). One way to help keep your portfolio growing is to invest in a tax-efficient manner. Some suggestions include:

Continue reading "Taxes and Investing Strategies" »

Posted by Mike - Editor at 7:11 PM | Permalink

After retirement, you’re likely to find that your retirement savings include several different vehicles, which might include: 401(k) plans, Individual Retirement Accounts (IRAs), profit-sharing plans, and taxable investments designated for retirement. When withdrawing funds, you need to decide the order in which to tap those accounts. Withdrawing your funds in the most tax-efficient manner can add years to their life, thus increasing your lifetime withdrawals. Typically, you’ll want to consider this strategy:

Continue reading "Withdrawing Retirement Account Funds" »

Posted by Mike - Editor at 8:22 PM | Permalink

Although it might seem a bit early to start thinking about your 2004 tax return, much tax-related information arrives in January. Organizing this information as it comes in makes the tax preparation process easier. While organizing your tax records is not an exciting task, it’s not an insurmountable one either. Follow these tips:

Continue reading "Getting Ready for Income Tax Time" »

Posted by Mike - Editor at 11:19 AM | Permalink

With marginal tax rates of up to 35%, income taxes can have a significant effect on your financial situation. There are basically three strategies to help reduce your income tax bill:

Continue reading "Review Income Tax Planning Strategies" »

Posted by Mike - Editor at 11:32 AM | Permalink

Continue reading "Withdrawing Your IRA Funds" »

Posted by Mike - Editor at 2:14 PM | Permalink

Continue reading "Recharacterizing Your Roth Conversion" »

Posted by Mike - Editor at 2:10 PM | Permalink

Continue reading "Another Look at IRA Accounts" »

Posted by Mike - Editor at 2:07 PM | Permalink

Continue reading "Avoid Borrowing From Your 40l(k) Plan" »

Posted by Mike - Editor at 2:20 PM | Permalink

If your objective is to pay the least amount of income taxes, then you need to be aware of these common tax mistakes:

Continue reading "Look Out for These Tax Mistakes" »

Posted by Mike - Editor at 7:31 AM | Permalink