Do Not Base Investment Decisions on Tax Laws
The adage tells us only death and taxes are certain, but we feel tax law changes are a certainty as well. Investment decisions made based solely on tax laws might not be the best decision.
A Gifting "Gotcha"—Gifting and Qualified Tuition Plans
You may be able to gift cash up to your annual exclusion amount, and you can pay someone’s tuition directly, but watch for the gift tax gotcha when contributing to a 529 Plan!
Don’t Be a Victim!
Identity thieves know you’re intimidated by the IRS, which is why they may try to use your tax refund as bait. Read all about it in this Tax Tip.
Simplified Employee Pensions Become More Attractive
Simplified Employee Pensions (SEPs) are a popular retirement plan for small businesses since they are easy to set up and administer. To set up a model SEP you complete Form 5305-SEP and retain it in the company’s files. A SEP-IRA account (similar to a Traditional IRA account) is opened for each participant at a selected financial institution.
Can I Switch from a UTMA to a 529 Plan?
Funds in a custodial account under the Uniform Transfer to Minors Act (UTMA) belong to the child, so there are some restrictions if you transfer funds to a 529 Plan.
Child Tax Credit
The 2010 Tax Act extended the Child Tax Credit through 2012. Like most credits, the Child Tax Credit has income limits.
Penalties and Interest
Failure to file is just one penalty the IRS can levy upon your tax return for not filing or paying by the April 15th deadline.
Personal Exemptions and Dependents
Personal exemptions reduce your taxable income. You can also claim an exemption for a dependent if all five of the exemption tests are met.
Is Real Estate a Viable Investment Option in Your IRA?
Real estate is, in our opinion, a very illiquid investment, and not ideal for those close to retirement. Additionally, to hold it in your IRA you have to be able to purchase it outright. You cannot mortgage the property.
Sales and Their Related Tax Implications
If you sell an asset—be it a stock or your car—it comes with tax implications. Regardless of whether you expect to incur a gain or loss, there might be a way to strategically maximize the amount you get to put in the bank.