NEW YORK, Dec 28 (Reuters) – In the drama over the “fiscal
cliff,” the usual year-end tax dilemma – about the little bits
of the tax code that either fall by the wayside or automatically
get renewed – is easy to overlook. But it is worth noting that
dozens of these so-called “tax extenders” are up for grabs in
the final days of the year, and that some of them actually
expired at the end of 2011.
At issue are popular tax breaks that help cover the soaring
cost of college; the choice to deduct state and local sales
taxes for those residing in states with low or no income tax;
the annual patching of the alternative minimum tax, which would
snare more than 30 million households without a fix — and many
NEW YORK (Reuters) – Tax planning for many people has devolved into one big guessing game this year as Washington battles over tax policy. Everything from payroll taxes to capital gains tax rates is still up in the air. But there are ways to play the odds, and some moves to make regardless of what Washington does.
Here are five actions to consider in the final weeks of 2012:
– Shift your deductions. The general rule for year-end tax planning is to move as many deductions as you can (from real estate taxes, for example) into the current year, while postponing as much income as possible into the next. Why pay taxes earlier than necessary, after all? For most taxpayers, that’s likely still good strategy. You can do this by paying your year-end tax bill and mortgage payments a few days early, accelerating next semester’s tuition payments into this year and more.
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
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.
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.
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
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
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
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.
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.
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.
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.