Don’t be fooled by the term commonly used to describe an extra tax liability a family may have to pay. The so-called “kiddie tax” is not limited to children in diapers or even those in the lowest school grades. It may continue to apply to children well into their 20s. Fortunately, there are several ways…
Remember those generous personal and dependency exemptions you have claimed in the past? Under new rules taking effect on 2013 federal income tax returns, exemptions are reduced for certain high-income taxpayers. However, depending on your circumstances, you may still be in line for a significant tax break. Basic rules:For starters, every taxpayer is entitled to…
With another tax season approaching, you may be wondering how long you need to hold on to your tax records. The standard answer is a minimum of three years, but maybe longer, especially if you are risk-aversive. Reason: The usual statute of limitations is three years. So the IRS has three years to review the…
If you are a sole proprietor, you have more retirement plan options now than you did in the not-so-distant past. For example, you can participate in a 401(k) plan much like the CEO of a major corporation. Many of the obstacles to this arrangement, including high costs for administering this type of plan, no longer…
Don’t be fooled by the term commonly used to describe an extra tax liability a family may have to pay. The so-called “kiddie tax” is not limited to children in diapers or even those in the lowest school grades. It may continue to apply to children well into their 20s. Fortunately, there are several ways…
Another year, another time to put together a business budget. However, if your business operation has been struggling the last few years, you might do things a little differently this go-round. In the past, the budget may have hindered managers from doing their jobs and discouraged them from taking risks. This could compromise integrity, distort…
The top tax rate on ordinary income (including short-term capital gains) increases from 35% to 39.6% for single filers with taxable income above $400,000 and joint filers above $450,000. The maximum tax rate on long-term capital gains increases from 15% to 20% for investors in the top income tax bracket. A 3.8% surtax applies to…
Of course, everyone makes mistakes, but some are worse than others. For instance, the types of errors you might commit when investing in equities could haunt you for years, dramatically affecting your lifestyle. Here are a few tips for avoiding several common mishaps. Show some patience. You cannot expect “instant gratification” whenever you invest. Adopt…
Is your child preparing to start the next semester of college in January? It can be a costly proposition for many parents, but at least you may be able to salvage some tax benefits. In particular, there are three main tax breaks for higher education expenses. The catch: You can claim only one of them…
If your child worked part-time this year, he or she might benefit from a Roth IRA. There is no age limit on contributions as long as the child has earned income (even if you actually provide the cash in a gift equal to the same amount). Although tax-free distributions from the Roth generally are not…
