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Dec 4, 2012

Getting ready for the Medicare tax on investment income

NEW YORK, Dec 4 (Reuters) – There are few certainties for
year-end tax planning this year, but if you’re a wealthy
investor there is one sure thing – the new Medicare tax, slated
to begin in 2013.

Part of the 2010 health care reform law, it is a 3.8 percent
tax on investment income for individuals with adjusted gross
income above $200,000, or $250,000 for married couples filing
jointly. The same high-income taxpayers will also face an
additional Medicare tax of 0.9 percent on wages and
self-employment income, on top of the Medicare tax they
currently pay.

Nov 19, 2012

How to make the most of charitable tax breaks

NEW YORK (Reuters) – When megastorm Sandy devastated parts of the Northeast, people raced to help: They donated money by text and credit card, scoured their closets for items to share and drove to the most ravaged areas to aid in the cleanup efforts.

They were motivated by generosity, not tax deductions, and that is how it should be in a crisis. But a well-placed writeoff does not hurt. The savvier you are about taxes, the further your philanthropic efforts will go.

Nov 9, 2012

Why tax pros love Roth IRAs

NEW YORK, Nov 9 (Reuters) – Many taxpayers are delaying
their year-end decisions until they see what Washington does
with a host of expiring tax measures, including those affecting
dividends and capital gains.

Yet one of the biggest year-end tax moves is relatively
removed from the headlines: whether or not to convert a
traditional Individual Retirement Account (IRA) to a Roth IRA.

Oct 22, 2012

Tax-loss harvesting and the fiscal cliff don’t mix

NEW YORK, Oct 22 (Reuters) – With taxes in flux because of
the looming expiration at year-end of the George W. Bush-era tax
cuts, it is time for investors to play the capital gains and
losses game.

A recent Bank of America Merrill Lynch report gauged the
prospect of a resolution of the fiscal cliff by year end – with
all of its tax consequences – at just 15 percent. Instead,
Merrill predicted that the most likely scenario was a
multi-stage fix that takes a few tries and a few months to get
done.

Sep 13, 2012

How small charity projects can sidestep complex tax rules

NEW YORK, Sept 13 (Reuters) – Even if you have a brilliant
idea for a new charity, your altruistic intentions could get
derailed by a morass of complicated 501(c)3 tax rules and
regulations.

There is an alternative, however. Consider piggybacking onto
an existing organization’s infrastructure and tax status, a
process known as fiscal sponsorship. This allows you do good
work, without the tax hassle of running your own organization.

Jul 31, 2012

Dramatic estate tax battle delivers fresh lessons

NEW YORK (Reuters) – A dramatic family legal battle over a $100 million estate does not often lead to life lessons for the masses.

But the California probate court decision in the case of the Tweten family, who got caught up in the one-year disappearance of the federal estate tax in 2010, offers some simple life lessons in estate planning.

Jun 29, 2012

New IRS rules for disclosure of foreign assets

NEW YORK (Reuters) – If you have foreign assets – whether or not you live abroad – the deadline to file with the Internal Revenue Service is June 30. But for those who have not filed the forms previously and are trying to come back into the system, some new rules from the IRS are going to help distinguish between true tax cheats and American citizens abroad who feared the massive penalties required by voluntary disclosure amid the recent IRS crackdown.

The IRS announced that it would help U.S. citizens overseas who are considered low compliance risks – including dual citizens (many Canadians), and those with foreign retirement plans – square their tax obligations through the voluntary disclosure program without facing penalties or additional enforcement actions, starting September 1.

Jun 18, 2012

Avoiding panic from Roth conversion glitch

NEW YORK, June 18 (Reuters) – Did you receive a notice about
taxes due on your 2010 Roth conversion from the Internal Revenue
Service? Don’t worry, you are not alone – and you likely do not
actually owe any extra cash.

Thousands of these frightening notices went out this spring
to taxpayers who converted tax-deferred retirement money from a
traditional IRA to a Roth IRA, in which income taxes are paid
upfront and not owed later.

Jun 1, 2012

A harsh lesson on charitable contributions

NEW YORK (Reuters) – A California entrepreneur got a harsh lesson on the rules of charitable contributions this week when the U.S. Tax Court denied his $18.5 million deduction for real estate donations —not because he inflated their values, but because he didn’t follow the rules.

You may be feeling a little schadenfreude that a member of the 1 percent got some tax comeuppance, but pay attention: It could happen to you.

Jun 1, 2012

COLUMN: A harsh lesson on charitable contributions

NEW YORK, May 31 (Reuters) – A California entrepreneur got a
harsh lesson on the rules of charitable contributions this week
when the U.S. Tax Court denied his $18.5 million deduction for
real estate donations -not because he inflated their values, but
because he didn’t follow the rules.

You may be feeling a little schadenfreude that a member of
the 1 percent got some tax comeuppance, but pay attention: It
could happen to you.

    • About Amy

      "Amy Feldman is an award-winning journalist and writer, specializing in business and finance. She writes a twice-monthly column on taxes for Reuters. The opinions expressed are her own."
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