News Stories and Articles
10 Tax Breaks Likely to be Extended
Most of the legislative action in Washington has been focused on health
and financial reforms. But a major catch-all bill dealing with tax
issues is expected to be enacted this week. Sporting the catchy title
of the American Jobs and Closing Tax Loopholes Act, the bill provides
one-year extensions to a number of tax rules that expired at the end
of last year. The extenders are retroactive to the beginning of 2010.
Numerous provisions apply directly to businesses and could have indirect
benefits for consumers by lowering product costs. For example, builders
and contractors will continue to enjoy a range of tax credits for
energy-efficient homes. Here are the more notable tax extensions,
provided in an analysis of the bill from tax publisher CCH:
Property Taxes. The additional standard deduction on real property
taxes --$500 for individual filers and $1,000 for couples -- has been
extended. It's for use by people who don't itemize their tax deductions.
Sales Taxes. Consumers have had the choice of taking an itemized
deduction on their state and local income taxes or their state and
local general sales taxes. The sales tax choice expired at the end
of last year but is extended in the bill.
Higher Education Deduction. Up to $4,000 of qualified higher-education
tuition and related expenses could be taken as above-the-line deductions.
There are income limits on who may take the deduction and it's not
available if the expenses are deductible under any other tax program.
Teacher Classroom Supplies Deduction. Up to $250 in out-of-pocket
spending on qualifying classroom supplies may be taken as an above-the-line
deduction. CCH notes that teachers who itemize their taxes might be
able to deduct qualifying expenses that exceed $250 by classifying
them as employment-related miscellaneous itemized deductions. The
total of all such miscellaneous deductions would only result in reducing
taxable incomes if it exceeded 2 percent of adjusted gross income.
IRA Charitable Contributions. The bill would restore the ability
of people older than 70 1/2 to distribute up to $100,000 from their
IRAs to charitable organizations without the money being recognized
as income or being subject to itemization rules that have size limits
on tax-favored contributions. CCH says the measure does not apply
to SEP or SIMPLE IRAs or, in certain circumstances, to inherited IRAs.
Donated Land. People may continue to receive tax deductions
for land donations to designated property conservation organizations.
Hybrid Vehicles. An alternative motor vehicle credit will continue
to be available for hybrid vehicles that use gasoline and electricity.
Separate credits are available for autos and light trucks, and for
medium and heavy trucks.
Alternative Fuels. A number of tax credits were extended for
biodiesel and renewable diesel fuel.
Energy-Efficient Windows. CCH says the measure modifies the
terms of the tax credits for energy-efficient windows to reflect regional
climate differences.
Disaster Relief. A number of programs will be extended to help
taxpayers affected by federally declared disasters, including higher
allowable loss limits for deductions and a five-year carryback provision
for net operating losses.
Yahoo Finance 5/10/2010
When You need a Pro
Sometimes you just need a professional. You wouldn't attempt dental
surgery on your own, and you probably won't install a new gas furnace
on your own, either. It's the same with your financial life - especially
at particular times in your life like the following:
When a parent dies. You may be the executor of the estate,
but you probably don't understand all the complexities involved.
When you want to design an estate plan for yourself or to help
your parents do so. You'll need to decide whether you should set
up a trust and what all your options are.
When it's time to devise your retirement plan. We all should
have one even if we're in our 20s or 30s. The earlier we start the
easier it will be.
When you're getting married. You'll want to decide how you
should blend your finances and arrange your accounts. Your new status
can even save you some money such as it you get added to your partner's
superior health plan.
When you're getting divorced. An advisor can help you answer
questions such as whether you can still file taxes jointly this year.
When you're saving for college. You'll want to learn about
all the programs and savings tools available to you.
When you're considering buying a complex financial product
such as disability insurance, long term care insurance and other insurance
products such as an annuity.
When you're buying or selling a home. These transactions involve
big sums of money and make sound decisions.(For instance, if you're
selling a primary residence you may be able to save tens of thousands
of dollars in taxes).
When you're trying to make sense of employee stock options you've
received.
The Motley Fool in the Contra Costa Times, 5/14/2010
Seven Facts to Help You Understand the Alternative
Minimum Tax
More and more Americans are finding they qualify for the Alternative
Minimum Tax (AMT). The Alternative Minimum Tax attempts to ensure
that anyone who benefits from certain tax advantages pays at least
a minimum amount of tax. Here
are seven facts the Internal Revenue Service wants you to know
about the AMT and changes to this special tax.
10 Uncommon Sources of Income in Retirement
To live out their retirement years in relative bliss, people traditionally
count on multiple sources of income--investments, retirement funds,
pension plans, and Social Security. For many, however, the recession
sapped one or more of their income sources and derailed plans for
post-work life, which now calls for a little money-making creativity.
From renting out an empty bedroom to working a part-time job in retail,
retirees are handling the setback with aplomb. For some more ideas,
such as return temping and fellowships, click
here.
Identity Theft: How To Avoid It
Identity theft occurs so frequently that the Federal Bureau of Investigation
cites it as "America's fastest growing crime problem." Thieves steal
and fraudulently use the names, addresses, Social Security numbers
(SSNs), bank account information, credit card numbers and other personal
information of some 10 million Americans each year, according to the
Federal Trade Commission. Learning about how thieves get your personal
information is the first step toward protecting yourself from this
devastating attack on your financial well-being. This article from
Forbes provides information for protection as well as what to do once
your identity is stolen. For more, read
the entire article.
Mind the Estate Tax Gap - What You May Not Know
This gap year is having an unintended consequence. Those affluent
families who suffer deaths this year could wind up paying stiff capital-gains
taxes on inheritances. That's because of the disappearance of what's
known as the "step-up" in basis, which allowed assets to be revalued
for tax purposes at the time of death. For more, read
the entire article.
6 Ways Couples Can Maximize Social Security
Payouts
Couples who are currently married, or who have stayed together
at least 10 years, tie their working records--and the resulting Social
Security checks--together as long as they both live. In the case of
Social Security payments, the result is often better for the couple.
Spouses have Social Security claiming options that single people don't.
Click
here for a few ways couples can boost their Social Security benefits.
