IRA owners and beneficiaries who have reached age 70 ½ are permitted to make cash donations to IRS-approved public charities directly out of their IRAs. These so-called qualified charitable distributions, or QCDs, are federal-income-tax-free to you, but you get no itemized charitable write-off on your tax return. But, that’s okay because the tax-free treatment of [...]
Taxpayers who acquire assets for use in their trade or business activity have a very good chance of writing off the entire cost, thanks to 100% bonus depreciation plus very generous Section 179 deductions limits. If there is a choice between them, this article will help determine which of these options is most beneficial. First, [...]
With millions of baby boomers close to retirement age and job losses inflicting financial strain on additional millions, many taxpayers are looking to social security benefits for financial assistance. So, we thought this would be a good time to discuss how social security benefits are taxed by the federal government. Individuals may have to pay [...]
The increasing costs of higher education have made education planning an important aspect of personal financial planning. However, education planning does not always receive the necessary attention required because some parents are counting on scholarships to cover the cost of their children’s education. Others procrastinate, as they do with retirement planning, because the actual expenditure [...]
Thanks to the extension late last year of the 2001 and 2003 tax cuts, the current federal income tax environment remains favorable. Now is a good time to take advantage of the low tax rates because we obviously can’t predict future tax rates. This article presents several tax planning ideas to consider this fall while [...]
Deciding whether it is advantageous to roll over a qualified retirement plan account (e.g. 401(k) account) to a IRA depends on the taxpayer’s specific circumstances. However, there are some general advantages: 1. Postmortem Tax-deferral Opportunities. Beneficiary designations as of the date of the owner’s death control the availability of various postmortem tax-deferral opportunities. Therefore, it [...]