Cut Taxes On Your Investments

Long-term capital gains tax rates will produce automatic tax savings by taxing the gain from capital assets at rates lower than the regular tax rate. To take advantage of the long-term rates, you need to hold the asset longer than one year. The long-term rate depends on two things: your marginal tax rate and how
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Save Taxes by Shifting or Deferring Income

Shifting Income to Your Child - Children under the age of 19 and full-time students under the age of 24 are subject to the so-called kiddie tax. This was enacted by Congress to restrict taxpayers from shifting large amounts of income to their children by taxing the child at the parent’s marginal tax rate. However,
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Explore Education Tax Incentives

Congress, through the years, has provided a variety of tax incentives to help defray the cost of education. Some require long-term planning to become beneficial, while others provide current tax deductions or credits. Section 529 Plans - Section 529 Plans (named after the section of the IRS Code that created them) are plans established to
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Owner-Only Businesses Should Consider a Solo 401(k) Plan

It goes by many names - Solo 401(k), Mini 401(k) and single-participant 401(k). We will use Solo 401(k) in this article to describe probably the best type of pension plan for owner-only businesses. It provides for larger contributions, including a Roth option for a portion of the contribution, and the ability to borrow funds from
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Make the Most of Your Deductions

As you plan for your tax year, keep in mind that some tax deductions are “above-the-line” and are available whether deductions are itemized or not. In addition to the educational “above-the-line” deductions, the following deductions are noteworthy. Health Savings Accounts - A Health Savings Account is a trust account into which tax-deductible contributions may be
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Tax Planning For Your Business

Business Entity Choices - Non-tax considerations generally take precedence in selecting the appropriate structure for your business. However, tax considerations can also play an important role in your decision. Choosing the right business entity at the inception of your business is important, and all aspects should be carefully considered. Your choices of business entities include:
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Real Estate Rental Limitations

Real estate rental income is business income but is not subject to Social Security taxes. Real estate rentals are also considered passive activities. Generally, passive activity losses are only deductible to the extent of passive activity income. An exception allows most individuals to annually deduct up to $25,000 ($12,500 for married filing separate taxpayers who
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Take Advantage of a Low Income Year

If your income is abnormally low this year or your investment portfolio has taken a downturn in value, you might consider some of the following actions: Make Gifts - When values are low and expected to rise, the stage is set for making a gift. Under current law, the gift is valued at its fair
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Planning Pension Distributions

An individual may begin withdrawing, without penalty, from his or her qualified pension plans at the age of 59-1/2. Generally, distributions before age 59-1/2 are subject to a federal penalty equal to 10% of the taxable amount of the distribution, but there are several exceptions that will allow earlier withdrawal without penalty. Upon reaching age
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Plan For Selling Your Home

Each individual taxpayer, regardless of age, is allowed to exclude up to $250,000 of gain from the sale of their main home if certain requirements are met. A married couple that meets the requirements can exclude up to $500,000. To qualify for the exclusion, a taxpayer must own and live in the home as their
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