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There still is time to make some valuable year-end tax planning moves, and this year there are some special opportunities to reduce tax payments. The Alternative Minimum Tax. The AMT snares more taxpayers each year, taking away tax benefits and pushing up tax bills. Basically, we have two tax systems, the regular tax and the […]
Successful investors and business owners always face a tax planning dilemma. If they sell their highly appreciated assets, they owe capital gains taxes. Even at today’s low top federal rate of 15%, the tax can amount to a sizeable chunk of money. People do not like their net worth to decline by that amount with […]
The IRS believes that nonfilers of estate and gift tax returns are a major cause of the “tax gap” between taxes legally owed and those actually paid. From 1995 to 2000, estate tax returns filed increased from 86,000 to over 123,000. In 2004, only 74,000 estate tax returns were filed. The IRS is undertaking a […]
Though set up to help regular people save, IRAs are fraught with complicated tax rules. Missteps can be made without the owner knowing it until it is too late to correct the problem. The result often is higher taxes and penalties. Sometimes the result is reduced IRA options. Here are some little-known but very common […]
The Alternative Minimum Tax (AMT) is trapping more taxpayers than ever. Created to ensure that the wealthiest taxpayers pay some income tax regardless of the tax breaks they use, the AMT now ensnares many middle class taxpayers. A taxpayer first computes regular taxable income, then adds back a number of tax breaks. After subtracting an […]
Medicare beneficiaries are used to annual premium increases to go along with the rising cost of medical care. But in 2007 many will be surprised by the new means-tested premiums. Higher income beneficiaries will pay higher premiums. The amount of the increase in premiums will depend on the beneficiary’s income. The higher premium is called […]
Rising home prices raise a tax problem that many people have not worried about for years. To avoid paying high taxes on gains from home sales, home sellers need to keep track of the tax basis of their residences. Long-time homeowners, especially on the coasts and resort areas, have substantial home equity. The tax law […]
The room at college doesn’t have to be an expense. It can be a tax break, with the potential for income and capital gains. It also might be a way for parents or grandparents to acquire a retirement home or second home. You can get these benefits by purchasing a place for your grandchild or […]