The 2012 Tax Filing Season is here! Although your tax return isn't due until April 17th, you should start thinking about it now so you're not stressed out at the last minute. Did you notice the revised filing date of April 17th? According to the IRS, the reason for the date change this year is for two reasons: April 15 falls on a Sunday; and Emancipation Day (a holiday observed in the District of Columbia), falls on Monday, April 16. According to federal law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year. Although you may think it's early, the IRS will start accepting e-filed tax returns on Tuesday, January 17, 2012. Here a few key tips to keep in mind as you prepare to file your taxes:

Continue reading "Preparing for the 2012 Tax Filing Season " »

Posted by Nickie - Editor at 1:14 PM | Permalink

The Internal Revenue Service has disaster assistance and emergency relief available for those who have suffered as a result of Hurricane Irene. There are tax provisions that may help both individuals and businesses recover financially from the impact of disasters, such as Hurricane Irene, especially when the federal government declares their location to be a major disaster area.

Continue reading "IRS Disaster Assistance and Emergency Relief for Individuals and Businesses" »

Posted by Nickie - Editor at 8:23 AM | Permalink

This year tax day falls on Monday, April 18th. As you work on getting those dreaded taxes done, keep the following IRS tax tips in mind - otherwise you may have a delay in getting your tax refund.

Continue reading "April 18 Tax Day" »

Posted by Nickie - Editor at 12:20 PM | Permalink

The concept of Going Green will continue to help you save on your individual taxes through the year 2016. Tax credits created or expanded by the American Recovery and Reinvestment Act of 2009 includes the Residential Energy Efficient Property Credit. According to the Internal Revenue Service, "this tax credit will help individual taxpayers pay for qualified residential alternative energy equipment such as solar hot water heaters, solar electricity equipment and wind turbines installed on or in connection with their home located in the United States and geothermal heat pumps installed on or in connection with their main home located in the United States". The credit, which runs through 2016, is 30% of the cost of qualified property.

If you are looking for a personal loan to fund your energy-related project, visit theManagingMoney.com Loan Center.

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

The 30 day deadline to file your 2010 taxes is just around the corner. Every year many taxpayers miss out on hundreds of dollars in potential credits and deductions because of rushing to complete their return before the April deadline. If you owe taxes, don't panic as there are options available to you including applying for an Installment Agreement or filing for a Tax Extension. In the case of an Installment Agreement you should still file your return by the April 18, 2010 deadline and pay as much as you can to avoid penalties and interest. With regard to a Tax Extension, you can get an automatic six-month extension of time to file through October 17, 2010. However, this extension of time to file your taxes does not give you more time to actually pay any taxes due. If you have not paid at least 90% of the total tax due by the April 18, 2010 deadline you may also be subject to an Estimated Tax Penalty.

Those taxpayers expecting a refund also have options of how to receive tax reimbursement including: refund in the form of savings bonds, payment to retirement accounts or mutual funds, or cash deposited directly to a checking or savings account. Beginning this year there are new savings bond options. Last year, if you chose to receive a savings bond as part of your refund, it could only be issued in the taxpayers' name. This year, you can designate anyone to receive a savings bond and also designate the co-owner or beneficiary.

Whether you are expecting a refund or owe taxes, let the ManagingMoney.com Tax Center help get you started. In this Tax Center we have tried to make this process easier for you by partnering with brand-name tax software companies including: TurboTax, H&R Block, and CompleteTax. You can start a new tax return, file for an extension, or download individual tax forms.

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

In December 2010 the IRS announced that due to the recently enacted Alternative Minimum Tax (AMT) legislation there would be tax processing delays for taxpayers who itemize deductions, specifically those claiming the higher education tuition and fees deduction and the educator expenses deduction. Effective February 14, 2011 the IRS will begin accepting tax returns that were affected by this filing delay. The IRS stated that the delay was necessary to accommodate the December 17, 2010 enactment of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 while not disrupting other operations tied to the filing season. The tax processing delay affected taxpayers using any of these five IRS forms: Form 8863, Education Credits; Form 5695, Residential Energy Credits; Form 1040A's Schedule 2, Child and Dependent Care Expenses for Form 1040A Filers; Form 8396, Mortgage Interest Credit; and Form 8859, District of Columbia First-Time Homebuyer Credit. To make sure you have the most up-to-date tax software, visit the ManagingMoney.com TaxCenter. Here you can compare the top tax providers in either download or desktop format.

Posted by Nickie - Editor at 5:53 AM | Permalink

As year-end rapidly approaches, it's a good time to take a look at your tax situation. You still have time to take action that could reduce your income tax liability for 2010. First, you need to assess where you currently stand on the following issues:

Continue reading "Income Tax Strategies for Year End" »

Posted by Nickie - Editor at 5:38 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 in 2010 is 15% (0% for taxpayers in the 10% or 15% tax bracket). While the 15% rate is significantly below the maximum ordinary income tax rate of 35%, it still takes a significant chunk out of your investment portfolio.

Continue reading "Investment Portfolio Losses" »

Posted by Nickie - Editor at 7:16 AM | Permalink

Many people confuse tax planning with tax preparation and only think about the subject when preparing their annual tax return. However, there is little you can do to actually lower your bill when preparing your return. If your goal is to reduce income taxes, you need to be aware of tax-planning opportunities throughout the year.

Continue reading "Develop a Tax-Planning Mentality" »

Posted by Nickie - Editor at 1:35 AM | Permalink

In the past, it was possible to turn a vacation home or rental home into your principal residence so that you could later sell it and exclude gains on the sale from income. If you were planning on such a strategy, be aware that the tax rules recently changed.

Continue reading "Reduced Planning Opportunities for Vacation Homes" »

Posted by Nickie - Editor at 6:29 AM | Permalink

Ordinary income taxes on short-term capital gains and interest income can go as high as 35%, while long-term capital gains and qualified dividend income are taxed at rates not exceeding 15% (0% if you are in the 10% or 15% tax bracket). One way to help maintain your portfolio's growth potential is to invest in a tax-efficient manner. Below are seven suggestions you may want to consider:

Continue reading "Taxes and Your Investments" »

Posted by Emma - Editor at 6:51 PM | Permalink

If your 401(k) plan permits, you can roll over balances from a traditional individual retirement account (IRA), but not a Roth IRA, to a 401(k) plan. To qualify as a tax-free rollover, the balance must be rolled over to a 401(k) plan for the same person who owns the IRA, the balance must be rolled over within 60 days, and the maximum amount rolled over cannot exceed amounts that would be includible in gross income if not rolled over. Thus, contributions to nondeductible IRAs cannot be rolled over, but contributions to deductible IRAs and all earnings in both types of IRAs can be rolled over. Also, any required minimum distributions for the year cannot be rolled over.

Continue reading "Rolling Over an IRA to a 401(k) Plan" »

Posted by Emma - Editor at 2:12 PM | Permalink

While tax planning should be a consideration through all phases of life, the nature of that planning changes as you approach retirement age. During your working years, your primary tax-planning objectives are to reduce your current income taxes while saving for retirement. After decades of accumulating money, you now need to ensure you withdraw and manage that money properly. Here are five tips you should consider:

Continue reading "Tax Planning as You Age" »

Posted by Nickie - Editor at 5:45 AM | Permalink

The Internal Revenue Service (IRS) is not exactly the favorite government agency of many Americans. This can only be expected given that everyone thinks differently on how best to compute and pay their taxes. Nonetheless, you should have a working knowledge of the tax system to be prepared in case you get audited. It is reported that around 80% of American tax payers are subjected to an IRS audit at least once in their lifetime.

Continue reading "Get to Know the Three Types of IRS Audits" »

Posted by Mike - Editor at 6:15 AM | Permalink

The IRS is promising to be kinder in 2009. They say that agents will have more freedom to suspend collections in those cases where people who owe back taxes are unable to pay. That doesn't mean they won't have to pay eventually, just that the IRS won't keep harassing you if you don't have the ability to repay what you owe at the present time. The guidelines issued to agents include cases where the taxpayer is facing serious illness, relies solely on social security or welfare, or have lost their jobs.

Continue reading "For the IRS, a Season of Kindness" »

Posted by Mike - Editor at 5:57 AM | Permalink

Deciding whether you should give a significant asset to an heir during your life or after your death has typically involved weighing potential estate tax costs against capital gains taxes that would be due when the asset is sold.

Continue reading "Gifting Considerations" »

Posted by Nickie - Editor at 8:40 AM | Permalink

When the value of a home is less than the outstanding debt, the homeowner's options are dismal. Foreclosure, deeds in lieu of foreclosure, and short sales all result in the loss of the home with serious credit consequences for the homeowner. In addition, if the lender forgives part of the loan, the homeowner walks away with nothing, and there may still be the following tax consequences:

Continue reading "Tax Consequences of Outstanding Debt Exceeding Home Values" »

Posted by Nickie - Editor at 6:00 AM | Permalink

As year-end rapidly approaches, it's a good time to take a look at your tax situation. You still have time to take action that could reduce your income tax liability for 2008. Once you have an idea of where you stand for 2008 with your income tax situation, you can evaluate some tax planning strategies that may reduce your income tax burden in 2008. Here are some tips to consider:

Continue reading "Year-End Tax Planning Strategies" »

Posted by Emma - Editor at 8:01 AM | Permalink

Should you pay income taxes now, so you can withdraw funds after retirement tax free? Or are you better off delaying income taxes until after retirement? This is the basic decision when choosing between a traditional deductible individual retirement account (IRA) and a Roth IRA, or between a 401(k) plan and a Roth 401(k) plan. With the Roth options, you are paying taxes now so you can take qualified distributions income-tax free. With the traditional IRA and 401(k) plan, you are delaying taxes until distributions are taken.

Continue reading "Tax Consequences Between a Roth 40l(k) Plan and IRA versus Traditional Plans" »

Posted by Nickie - Editor at 5:24 AM | 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, 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