Category - Taxes

1
2008 Year-end Income Tax Planning
2
Income Tax Changes in the Emergency Economic Stabilization Act
3
Tax Breaks Tucked into the Latest Housing Bill
4
Tax Refunds Going to IRAs May Cause Snafus
5
What do municipal bonds and 529 plans have in common?

2008 Year-end Income Tax Planning

As 2008 draws to a close, take some time to consider what you can do before year-end to reduce your income tax bill.

In late November, a financial planner’s fancy lightly turns to thoughts of…minimizing taxes.  Actually, I’m thinking about Thanksgiving too, but while there’s still time to act, it’s wise to spend a little time thinking creatively about managing your tax liabilities.

This year, end-of-the-year strategies are trickier, as no one can say for sure whether income taxes will increase significantly in 2009 under a new presidential administration.  In the midst of recession, it’s becoming less likely that taxes

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Income Tax Changes in the Emergency Economic Stabilization Act

With so much attention being given to the $700 billion bailout of banks and the financial industry in the Emergency Economic Stabilization Act of 2008, not much has been said about the individual income tax provisions included in the massive 440-page bill passed last month. If you’d like to avoid searching the full bill for the parts that might be personally relevant, here’s a quick summary of some provisions that could be interesting to you even if you’re not an enormous bank.

Alternative Minimum Tax (AMT) relief
For the last several years, Congress has been applying bailing wire and duct …

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Tax Breaks Tucked into the Latest Housing Bill

Tax Breaks in the Latest Housing BillThe Senate bill passed today provides aid for homeowners on the brink of foreclosure, relief for beleaguered mortgage finance firms Fannie Mae and Freddie Mac, and something else: tax breaks for first-time homebuyers and a deduction for homeowners who normally aren’t able to itemize their deductions.

For 2008 only, the bill provides that homeowners who don’t itemize will receive an extra deduction for a maximum of $500 or $1,000 for single or married filers, respectively.  The deduction will be based on property taxes paid.  An estimated one-half of homeowners don’t itemize – presumably because their mortgages are paid off …

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Tax Refunds Going to IRAs May Cause Snafus

Taxpayers who previously set up their tax refunds to be deposited directly to their IRAs this year will need to be vigilant: Economic Stimulus rebate checks will also be automatically deposited into any IRAs whose owners have set them up to receive tax refunds.

Normally, arranging for your tax refund to go into your IRA directly is a great idea – it protects you from the temptation to spend the refund.  Since most of us practice “mental accounting,” a tax refund that goes directly into our IRA won’t give us the feeling that we’re giving something up to save for …

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What do municipal bonds and 529 plans have in common?

The Supreme Court is considering an appeal to Kentucky versus Davis, a lawsuit that could have an impact on the state tax treatment of both municipal bonds and some state 529 plans.

As described in this article from the Wall Street Journal (also available here as an excerpt from the Albany Times Union, if you don’t have access to the WSJ site), the case is a lawsuit in which the plaintiffs argued that it is unlawful for a state to provide a tax exemption for its own bonds while not providing the same exemption for out-of-state municipal bonds.  Kentucky’s …

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