Real Estate Investing received a wide support from Fannie Mae loosening their guidelines for investors. From 1st March 2009, up to 10 financed properties allowed per borrower. The new rules apply to single or joint ownership of real estate unit of 03:59.
Real Estate Investors can play a large role in the property market recovery. should the new way to buy investment property with conventional financing to accelerate the sale of the foreclosure inventory that was due to the need for investors cut pay in cash.
This new source of money removed an obstacle to real estate But it does come invest with some conservative guidelines. Fannie Mae is primarily looking for experienced real estate investors with high quality credit and cash reserves.
Qualifying for real estate investors:
1st Purchase of a unit as investment property requires a minimum 25% deposit.
2nd The purchase of a unit three fifty-eight property requires a minimum deposit of 30%.
3rd A real estate investor must have a minimum of 720 credit score to to qualify.
4th Investors can no mortgage defaults within the last 12 months.
5th There can be no history of bankruptcy or foreclosure within the last seven years.
6th Rental income documentation with two years of tax returns with all the rental property.
7th 6 months reserves In principle, interest, taxes, insurance is required for each property.
Investors must sign a form granting permission Lenders copies of federal tax returns directly with the IRS. home before the loan closing, the lender must receive copies of the IRS tax return or transcript and confirm the correctness.
The change in policy creates a positive step for the industry, although strict guidelines in the field of qualified Real estate investors is small, and leave many on the sidelines. However, this situation can lead to a growing opportunity, investment partnerships, groups and associations, to pool to use financial and credit markets, resources, designed the purchasing power of the individual.
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For two years, CBS’s Joan of Arcadia managed the neat trick of warming the heart, while keeping the gag reflex at bay. And for a family drama based around faith–and the lack thereof–preachiness was always in short supply. At the end of the first season, Joan (Amber Tamblyn) decides it’s all in her head: God isn’t really speaking to her. Over the summer, she attends a camp for troubled kids, and…
This vocational film gives a vivid inside look at the work of a custodian. The film documents the importance of sanitation in public buildings and details the cleaning of a restroom. Table Of Contents: (1) Color it Clean (1966) – This presents the under-appreciated work of the custodians. The picture documents the emaculate cleaning of a men’s university restroom with narration written and perform…
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Charlotte Cleaning Service: Housekeeping Supervisor
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Housekeeping Supervisor Job Activities
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Jim Lange and his Team Offer Last Minute Tax Advice
Jim Lange, JD/CPA makes presentations of his cutting-edge Roth RIA conversion strategies all over the country for consumers and financial professionals. He recorded his best information in a two hour workshop which is available to consumers by going to www.retiresecure.com/rothiraconversion. (This offer is not intended for financial professionals). For Financial Advisors interested in Jim’s done-for-you workshop kit, please call Nicole DeMartino, Marketing Director, at 412.521.2732 / 1.800.387.1129 or visit http://www.rothira-advisor.com/2010rothrevolution.htm.
Last Minutes Tax Advice with Tax Expert, Steve Kohman, CPA, CSEP Veteran Lange team member, Steve Kohman, CPA, CSEP talks last minute tax advice covering everything from making retirement contributions to filing a tax extension.
Welcome to The Lange Money Hour: Where Smart Money Talks. Hosted by Beth Bershok, with expert advice from Jim Lange Pittsburgh based CPA, attorney, and retirement and estate planning expert. Jim is also the author of Retire Secure! Pay Taxes Later. To find out more about his book, his practice Lange Financial Group, and how to secure Jim as a speaker for your next event visit his website at www.retiresecure.com. Now get ready to talk smart money.
Beth Bershok: Thank you for joining us, I am Beth Bershok and we are talking smart money. We are actually tonight talking smart tax money, and there is a lot to talk about because we are 1 week away from the tax deadline. First of all of course we have Jim Lange, CPA Attorney, bestselling author of the book, Retire Secure! and we drug him out of the office tonight. We have Steve Kohman; Steve you have been with Jim for what, 15 years?
Steve Kohman: Yeah, about 15 years; thanks for dragging me out of his office!
Beth Bershok: Well Steve has been busy. Steve is a CPA, he’s a specialist in estate planning, he’s a Certified Valuation Analyst and hey it’s a lot of work right now during taxes and we are 7 days away. Before we get to everything else tonight I have a quick question for the both of you: Are your taxes done?
Steve Kohman: Yeah, I did mine earlier.
Beth Bershok: Did you? Look at you go!
Steve Kohman: February 1st.
Beth Bershok: Ok Jim, just a little poll.
Jim Lange: I have been extending my own tax return for the last 30 years and will extend my return again this year.
Beth Bershok: I bring this up because my husband is also a CPA and he told me I should consider October 15th the deadline for the rest of my life. We are taking questions tonight so I want to give the studio line. It’s 412-333-9385 so if you have a question we have another hour here for you to call us at 412-333-9385 if you have a question for Jim or Steve. We also have a very special deal that we’re going to be telling you about a little later in the show, and also a couple of workshops coming up so we’ll get to that. But I do want to start with, you know a lot of people are in a frenzy, it’s the last week here, taxes are due next Wednesday and some people may be thinking that there’s nothing I can do now with the numbers. But apparently that’s not true, you can still effect 2008.
Jim Lange: Well one of the most important things that you can do for your both short-term and even more so long-term future, is, it is not too late to make a retirement claim contribution. As many listeners know in general, but not always, I tend to favor Roth IRAs for people who are still working in Roth 403(b)s. Now it is too late for 2008 to put money into a Roth 401(k) or even a traditional 401(k) or 403(b). But it is not too late to put money into a Roth IRA whether you have done your return or not. If you are married and you’re filing a joint return and your adjusted gross income is less than $169,000, you do qualify for a Roth IRA and if you’re single, $116,000 and you can do that for yourself. You can also put money in for your spouse. We’re talking $5,000 if you are 49 or younger, or $6,000 if you are 50 or older for yourself and the same amount for your spouse. If your kids are working or have any earned income it is not too late for them, and I think a lot of people know about Roth IRAs. But can I tell you something that people don’t know about and they’re not doing and they’re not thinking about?
Beth Bershok: Jump in there, tell me what it is.
Jim Lange: This is going to be for people who make too much money to put into a Roth IRA and they think Oh I can’t do anything else. But they can actually put money into a non-deductible IRA.
Beth Bershok: Ok, explain how that works.
Jim Lange: The non-deductible IRA: they don’t get an income tax deduction today so in effect it’s after-tax money but the money grows tax-deferred. That is, they won’t have to pay taxes on an annual basis. A lot of people have non-deductible IRAs even back when they were $2,000 but now they are $5,000 or $6,000 and what’s really cool about non-deductible IRAs particularly with 2010 coming up , it’s not going to be very long where we’re going to be able to convert those non-deductible IRAs to Roth IRAs. We’re going to have the opportunity to take what is otherwise grown tax deferred and getting a tax-free growth, and that’s something that not many people know about that they should probably be taking advantage of and it’s not too late.
Beth Bershok: I have to jump in here one second and mention your Roth Seminars which are coming up. You have a couple of workshops where you touch on a lot of these strategies and the past couple of ones have, we’ve gone to capacity so I want to mention the dates. There’s one next Saturday it’s at the Comfort Inn on Rodi Road and that’s 9:30 to 11:30 in the morning, and also 1 to 3 in the afternoon. We just booked one for May 16th which is a Saturday, same times. We’re in Cranberry this time and it’s at the Four Points Sheridan and I’m going to give you coming later in the hour, the toll free number to call to register. They’ve really been booking up so you should book as soon as you can. But you cover a lot of those strategies in these workshops. Now getting back to the non-deductible IRAs for a second, are the limits the same that you mentioned for the Roth and the IRAs?
Jim Lange: Yeah it’s still $5,000 and $6,000. The income change, it’s for people who are making more than $169,000 but it’s something that people don’t know and it is a way that people who are wealthy can get into the tax-free world of Roth IRA conversions. Again, it’s not too late.
Beth Bershok: Now something a lot of people are going to have to deal with on their return this year is re-characterizing their Roth IRA from 2008 because we all know what happened to the market, and you can undo your IRA. I actually have a question on this, can I toss this out to you guys?
Jim Lange: Yeah go for it.
Beth Bershok: This comes from’“ Oh I do want to thank, we have listeners who are listening at KQV.com. They are listening all over the country and I know this because they email us. We’ve had emails from Ohio, New Jersey, Texas, Florida and Maryland, and we just got one this morning from San Francisco. This is his question, Raj from San Francisco said that he re-characterized about $70K. His question is, he’s turning it back over to traditional, he wants to know if that means the conversion never took place in the first place and will his AGI come down by that amount?
Jim Lange: Well, how about I give you the conceptual answer.
Beth Bershok: Ok
Jim Lange: Steve will do the tough part which is to tell you how to report it. Conceptually, I would consider that an undo. So let’s say that you have done a Roth IRA conversion sometime in calendar year 2008, and lets just say that he did it for $70,000 and now it’s worth $40,000 or $50,000 and he’s not so happy about it. If he doesn’t do anything pro-actively he is going to have to pay income tax on $70,000 and the Roth IRA is only worth $40,000 or $50,000. So undoing or technically re-characterizing is the appropriate strategic thing to do and he has until October 15th of 2009 to re-characterize his 2008 Roth IRA conversion. If he has not yet filed his tax return and he re-characterizes, Steve is going to explain the mechanics of that.
Beth Bershok: I think that’s the deal Steve.
Steve Kohman: Ok
Jim Lange: If he has already filed his tax return he can file an amended return, but it is very important to know that you can re-characterize. So even people who should be making Roth IRA conversions now in 2009, if it doesn’t work out, if you make a Roth IRA conversion and the market goes down, you will still have the opportunity either in 2009 or up until October 2010 to re-characterize. Now maybe Steve can help us with some of the mechanics on how to handle that on the 1040.
Steve Kohman: Yeah it’s really not as hard as it sounds and the thing that throws people off is when they do a re-characterization, the amount of money that goes back into your traditional IRA is less than what you converted. And also people get confused when they get a 1099 for the re-characterization. They don’t really know what to do with it and they see it has a distribution code and they get confused. But that’s really simple to handle on your tax return. Ordinarily, if you did a conversion you’d put the gross amount on 15 (a) for gross distributions from IRA and the taxable amount, the same amount, maybe $70,000. But if you have to amend the return or re-characterize it, then the taxable amount on 15 (b) is just 0. So it’s very simple, just put a 0 on 15 (b) which is 0 taxable income and your pretty much done. I would make sure you keep paperwork and understand the dollar amounts that flow in and out of the Roth IRA in case there are any questions on it later.
Beth Bershok: So what basically happens if you have already filed your return? Let’s say for instance Raj already filed his return then he decided to re-characterize, he can still file an amended return?
Steve Kohman: Yes, he can file an amended return and claim a refund of the full $70,000 he converted.
Beth Bershok: Okay and if you have a question for Jim or Steve we are taking them tonight at 412-333-9385, we’ll be here until 8 o’clock, it’s The Lange Money Hour: Where Smart Money Talks.
Beth Bershok: Talking more smart money on The Lange Money Hour: Where Smart Money Talks. I’m Beth Bershok. Jim Lange with us today and of course also joining us Steve Kohman who has been part of Jim’s office for the past 15 years. Steve is a CPA, he’s a specialist in estate planning and a Certified Valuation Analyst. And we’re going to be taking your questions too, so call 412-333-9385 if you have a question. Steve, there are a lot of things that are new for this year, that I think are causing some confusion for people, and can we touch for a second on the Housing and Economic Recovery Act of 2008.
Steve Kohman: Yes.
Beth Bershok: And one thing that is causing some confusion is the first time home buyer refundable tax credit. Can you explain first of all exactly how this is working?
Steve Kohman: Well actually it was a very good deal when it first came out in 2008. It allowed first time home buyers to get $7,500 back on their tax return, even if they didn’t owe that much in taxes so it’s a refundable item. People who bought a home in 2008 that qualified got that much money back and are eligible for that, and if you don’t know about that it’s a really good deal for 2008.
Beth Bershok: So if you bought a home in 2008 you should be considering this on your return?
Steve Kohman: Yeah, so think about that if you bought a home in 2008. But the bad news is that it would have been better to buy the home in 2009 because in 2009 they changed the law again and made the credit not refundable. The original one from 2008 you had to pay back over 15 years, $500 per year on your next 15 year tax returns but in 2009 if you keep the home for 3 years you don’t have to pay it back at all. And that qualifies for homes purchased between January 1st 2009 and December 1st 2009.
Beth Bershok: So you actually get quite a break if you buy your house in 2009.
Steve Kohman: Yeah between now and November 30th, I don’t know why it has to stop December 1st.
Beth Bershok: Yeah why does it have to stop? It’s just one of those things. We do have a call coming in from North Park and this is a question on Roth IRAs. Hi good evening and what is your question..
Caller #1: The question is, I contributed some money to a Roth IRA and I think I have to take it back because of certain reasons. I have to take it out or it will be an excess distribution because I’m not eligible for the Roth IRA. So what happens now, do I have to take out all the money that I put in? I put in $6,000. Or because the market value has gone down on my portfolio then do I take out $6,000 then what? How does it work?
Steve Kohman: Well you have to call your broker and tell them you would like to re-characterize the Roth conversion, perhaps it’s because you never qualified for it in the first place.
Caller #1: Ok
Steve Kohman: Or it could be because it went down in value, it doesn’t really matter why. Anyone can re-characterize their contribution. So, yes it would be going back to either the traditional IRA or you can..
Caller #1: No, I don’t think I can contribute to any one of them because my income is social security and pension income. It’s not earned income.
Steve Kohman: Right, you didn’t have earned income. So yes, it was a failed contribution so you’d have to contact them and explain that to them. Then you’d have to take that money back out of the Roth IRA, that’s correct.
Caller #1: Yeah, the question is, if for example, I put in $6,000 and there’s nothing else in that portfolio except for that $6,000 stocks, whatever I bought. Now they’re worth $3,000 so I can’t withdraw more than $3,000.
Steve Kohman: Right yes, it would be $3,000 that goes back in there. There may be some tax benefits to the amount of loss you suffered during that period of time.
Caller #1: I see
Steve Kohman: You’ll have to look into that, yeah, but that’s correct.
Beth Bershok: Ok was that helpful?
Caller #1: Yeah it was, thank you so much.
Jim Lange: And I’m going to do what people hate and tell you what you should have done.
Jim Lange: Rather than making a Roth IRA contribution, what could have been done was a Roth IRA conversion. I am a big believer that retirees should come up with, probably with the help of an adviser, but should come up with a long-term Roth IRA conversion strategy. Perhaps, and without knowing more about your situation, but I might take the liberty of guessing, it might be appropriate for you to make a series of Roth IRA conversions, even if a relatively small amount over a number of years, that might have been a more appropriate strategy for retirees.
Beth Bershok: Hey thank you so much for your call , does that answer your question?
Caller #1: Yes it does thank you.
Beth Bershok: Thank you so much, he was checking in from the North Park and if you have a question its 412-333-9385, Jim Lange and Steve Kohman. I want to jump to the Worker Retiree and Employer Recovery Act of 2008 because I think this effects a lot of people. This has to do with the RMD suspension of 2009 where seniors do not have to take their RMD. But its caused a lot of confusion on exactly how it works, and some confusion also on what to do with your taxes there. So, let’s start first with how it works for 2009 in terms of you don’t have to take your distribution, can you take a partial distribution?
Jim Lange: Yeah you could take a partial distribution and technically you really don’t even have to do anything. You can just sit there and say guess what? I don’t have to take a minimum required distribution this year and my taxes are going to lower. I’m likely to be in a lower tax bracket and thank you very much Congress. You could take that passive role and you would be fine with it, assuming you do not need the money from your minimum required distribution for your ordinary expenses. But that’s step 1. What ‘d like to do is go a step deeper and say let’s think about this for a minute. You’re retired, you don’t have any income from work or even if you do that’s not your major source. You have minimum required distributions that normally, not for 2009, but normally would push you into a higher tax bracket. Now since you don’t have to take a minimum required distribution because of this one year rule, you’re into a lower tax bracket. Rather than just saying thank you very much, I’ll be in a lower tax bracket this year, I would proactively say Hey, this is a great opportunity to make a Roth IRA conversion at what is likely the lowest income tax rate that you will ever be in for the rest of your life, even forgetting tax raises in the future which I believe are almost inevitable. Your personal rate will be lower because you don’t have your minimum required distribution. I used to tell people the best years to convert was after you retire but before minimum required distribution. Now people over 70 are going to get this one year reprieve of having no minimum required distribution and likely be in the lowest rate they will ever be in.
Beth Bershok: It’s sort of an accidental bonus, really.
Jim Lange: It is an accidental bonus; I do not think it was intended for people who have a reasonable amount of money to be able to exploit and proactively take advantage of. In fact, other than the sources that I have come up with, and you know we’ve done press releases that were recognized all over the country in many major newspapers, nobody else was saying be proactive about this, do a Roth IRA conversion this year and depending upon the numbers you can be $10,000s, $100,000s down the road for your family – even a $1,000,000 better off.
Beth Bershok: Steve wants to jump in with something.
Steve Kohman: That’s a great plan for people who have a good income and maybe a lot of money but there is a trap there though for some people who don’t, and who have social security income. That is the strange part of the tax law that makes more and more of your social security income taxable, the more income you have. Without their MRD’s for 2009 they could end up owing very little or no tax at all on their income. If they had the MRD they can calculate their tax with and without what would have been their MRD, and they might be paying 25%, 35% tax on what would have been their MRD or Roth conversion perhaps, unless it’s a large conversion amount. It makes it seem like a high tax on the next incremental bit of income that they have, like from a Roth conversion. There is a trap there; I would run the numbers to make sure it makes sense for you.
Beth Bershok: Actually tha’s one of Steve’s niches – doing the projections on situations like that.
Steve Kohman: Yeah and it’s just a strange part of the tax code that makes people with less income in extremely high tax brackets. There’s many other things that do that, there’s tax credits that phase out, itemized deductions, retirement savers, credits – all kinds of things that just go away the more money you make so you’re taxed higher than anyone else when you don’t have much money.
Beth Bershok: All kind of unusual things in the tax code aren’t there Steve?
Beth Bershok: We are talking smart money, The Lange Money Hour: Where Smart Money Talks. When we come back here in just a second we do have a very special deal that I am going to tell you about and if you want to call in it is 412-333-9385 The Lange Money Hour: Where Smart Money Talks.
Beth Bershok: The Lange Money Hour: Where Smart Money Talks. I’m Beth Bershok, with Jim Lange and Steve Kohman tonight. We’re talking taxes because we are 1 week away from the tax deadline and before we continue we have a very special deal. It has to do with extensions because at this point you’re thinking ooh it’ s 1 week from the tax deadline, there is no way ‘m going be able to wrap this up. So at our office which is in Squirrel Hill and I’m going to give a toll-free number because this is good if you are a resident of Pennsylvania. The professional staff is offering to do free extensions. This is what you’ll have to do, give us a call, the number is 1-800-387-1129, give us your name, your phone number and relevant information. What they are offering to do is take care of the extension in terms of – you guys will do the paperwork, right? Now, you’re not going to do the estimate at this time so they have to have some kind of idea of what they owe. And then they’ll make sure it’s delivered and then one of the accountants will meet with you later, to make sure that everything is filed by October 15th. So, that’s the offer of a free extension if you’re listening tonight, this is good for PA residents and you can call the office at 1-800-387-1129. You can call the office tomorrow morning in fact and we’ll take care of that. We’ll just need your name, phone number and then we’ll get that going for you. Now you guys want to talk about capital gains, am I reading this right? There’s a new 0% tax rate on long-term capital gains and qualified dividends.
Steve Kohman: Yes there is and this is another part of the tax code that is very strange.
Beth Bershok: Steve loves the tax code
Steve Kohman: There’s a 0% tax rate on qualified dividends and capital gains up to what would have been your 15% tax rate. For example, if you’re married filing a joint return you can have $65,100 of taxable income which is the top of the 15% bracket and not pay any income tax. Let’s say your itemized deductions and personal exemptions are $20,000, say you have $85,000 of taxable income. Let’s say you have $2,500,000 worth of good blue-chip stocks that paid dividends and you make $85,000 of dividends. Well guess what, you don’t pay any tax – another strange quirk of the tax code – people with $2,500,000 don’t pay any tax!
Beth Bershok: It is a strange quirk, that’s very interesting. How do you keep up on all these changes in the tax code, seriously how do you keep up?
Steve Kohman: Well you see them when you do a lot of tax return work and different situations people have. One of the things that’s important on your tax return is taking the capital-loss carry over. People have a lot of capital losses this year with the stock market and had some last year and it’s important if you have a situation where you have lost money in the stock market, to do a little tax loss selling to create your capital loss. Because if you don’t sell stocks you won’t have the capital loss, and some mutual funds still kicked out capital gains distributions, and you certainly don’t want to pay tax on capital gains this year, or next year when you’ve been losing money.
Beth Bershok: Do you think a lot of people miss these? Do you think a lot of people are doing their returns and their missing the 0% tax rate because they’re trying to do it themselves and they’re unaware of these parts of the tax code?
Jim Lange: Well that’s possible. That’s Schedule D where you calculate the capital gains and qualified dividends tax worksheets, one of the most complicated parts of the tax return and virtually everybody has that as part of their tax return. I recommend doing it with a tax preparer or a computer, doing it by hand is very difficult these days.
Beth Bershok: 412-333-9385 if you have a question for Jim or Steve. Something else that is possible – reduce your college tuition cost. How is that possible?
Steve Kohman: Well it’s always been for the last few years, a very good tax credit available for people, the Hope Credit and Lifetime Learning Credit. It’s potentially giving you up to $18,000 dollars per student for the Hope Credit. There is good news on the horizon for 2009, a lot of people may have been phased out with this credit because their income was too high and in 2009 the phase out range has jumped quite a bit, for a married couple from $116,000 of AGI up to $160,000. So it’s going to be much more relevant to a lot of people – a lot more people in 2009 and the amount is jumping from $1,800 up to $2,500 for the Hope Credit. Also another bonus is the Hope Credit is valid on spending money for books as well of just tuition for 2009 so it’s improved quite a bit, and people should be aware of that.
Beth Bershok: Something that I think a lot of people miss, you know if you sit down trying to do your taxes yourself you miss, you overlook some deductions and something that Steve pointed out earlier was review frequently overlooked medical expenses. Steve, take us through some of those.
Steve Kohman: Well there’s basic things, one of the things people miss is the medical care insurance premiums that are withheld from your social security income. That’s part of a medical expense, there’s also your basic things like prescription costs, co-payments and also long-term care insurance. One of the things that’s frequently missed for self-employed people is that the deductible long-term care insurance premiums and the Medicare insurance premiums also qualify as self-employed health insurance deductions where you can get it on the front page of your tax return, even if you don’t have enough medical expense to use it as an itemized deduction. So that’s some things to be aware of. Some other things that you might not know is if you have an elderly parent who’s in an assisted care facility and needs help with daily living and chores, you can get them certified as chronically ill and deduct the entire cost of living in the facility, like a nursing home; that would be deductible also as a medical expense. It would be a long-term care expense in that case, if they’re certified as chronically ill.
Beth Bershok: You know a lot of changes for this year. Jim, there’s a difference in the Estate and Gift Tax law this year as well, no, ok? What did you want to cover? More medical expenses?
Jim Lange: I actually wanted to point out something, you asked Steve a very interesting question, you said How do you keep up on this? And Steve said well you know, I prepare a lot of tax returns which is even more valuable than reading all the advanced sheets that tax preparers get. I think a lot of times what people miss isn’t necessarily missing deductions on the return when they do the return themselves, but they miss planning opportunities. I’ll give you an example, tax-loss harvesting when you offset capital gains and losses. That should be done before year end and if you prepare your own taxes and you don’t think about this stuff and you don’t get a letter from a CPA firm saying hey, it’s time to do tax-loss harvesting and here’s how you get it, you might not think about it. Lets even say that somehow somebody tells you about it. Steve just mentioned the deduction if you can get an elderly person certified as chronically ill. Well let’s say you have a $60,000 or $70,000 or even a $100,000 medical expense that now becomes deductible and you only had say $10,000 or $20,000 of income. To me that is an opportunity to make a very significant Roth IRA conversion that could have an enormous impact for the family later on. So, it’s both tax preparation but it’s also the planning that goes into it that I think people have to be aware of.
Beth Bershok: And speaking of Roth IRA conversions we have a question, we have Bob on the line from Penn Hills who has a question about Roth IRA conversions. Hi Bob, what is your question?
Bob: Hi, if you make a Roth conversion do you also have to file an 8606 form along with that when you are returning your tax return?
Beth Bershok: 8606, that sounds like something Steve would know off the top of his head.
Steve Kohman: Well, they did change the 8606 a little bit from last year. I think you have to complete it when you take money out of a Roth IRA but you should keep track of your basis of Roth IRAs and the conversion would be part of that. I’m not sure that it’s really required on the 8606 this year.
Beth Bershok: Bob, you have a Roth IRA?
Bob: I made a conversion and my computer program spat out an 8606, but it didn’t completely fill it out and I was curious to whether that was a requirement or just supplementary information?
Steve Kohman: Yeah I just looked at that 8606 and it says complete this part of you took money out of a Roth IRA, so I guess you don’t have to at this point.
Bob: Ok, thank you very much
Beth Bershok: Thank you Bob.
Jim Lange: Steve you’re going to have to help me out on this. Isn’t the 8606, when I think of 8606, maybe I have the form wrong, I’m thinking of the basis that you have to keep track of for your non-deductible IRAs because if you make a non-deductible IRA contribution then you should be keeping track of what is deductible and what is not, and I thought that that was the purpose of form 8606.
Steve Kohman: They expanded the purpose of 8606 to cover Roth IRAs to keep track of the basis of them because you can only take out so much from your Roth IRA before you’re 59 ½ before you pay tax on the earnings. Now that rarely happens but it does have to be kept track of.
Jim: And what I would say, what’s really valuable about the 8606 is keeping track of the after-tax dollars because one of the things that we will be talking about at the two seminars, that Beth Bershok is going to give you the times and dates on, is how to make a Roth IRA conversion from money that you’ve already paid tax on in the form of a non-deductible IRA.
Beth Bershok: That’s one of Jim’s favorite strategies.
Jim Lange: That actually is! It’s so cool particularly for people who have after-tax dollars in their retirement plan. We show how if you have even just say $50,000 of non-deductible IRAs or after-tax dollars and a retirement plan, that you can be $500,000 better off in the future and you know how much it cost you in taxes now to be $500,000 better off in the future?
Beth Bershok: How much?
Jim Lange: Nothing, Nothing.
Jim Lange: Doesn’t work for everybody but it is one of my favorite strategies and we’ve done it multiple times in practice.
Beth Bershok: We have graphs in fact in the workshops, and if I’m not mistaken, Steve you’re the one who did the graphs for that workshop. Am I right?
Steve Kohman: Yeah sure.
Beth Bershok: Well here’ the deal, I’m going to take this second to tell you when the workshops are because we really do go through all of this and it’s coming up next weekend. It’s at the Comfort Inn on Rodi Road and we’re doing one from 9:30 to 11:30 in the morning and then 1 to 3 in the afternoon.
Jim Lange: When you say next weekend you mean April..?
Beth Bershok: 18th
Jim Lange: 18th , Right not this coming Saturday.
Beth Bershok: Right, exactly. Not this coming Saturday, it’s going to be April 18th and you do need to tell us when you call to make your reservation which session you want to go to, 9:30 to 11:30 or 1 to 3. And by the way the phone number for that to register is 1-800-748-1571. The next one we already have on the calendar because we’re reaching capacity every time we do one of these seminars. The next one is set for Cranberry at the Four Points Sheridan on Saturday May 16th same times, its 9:30 to 11:30 and then 1 to 3 in the afternoon 1-800-748-1571, you need to tell us what session you want to go to. I don’t think I’ve ever mentioned this but one of the cool things about going to these, not only do you get these great strategies but you get a copy of Jim’s book, Retire Secure! Pay Taxes Later, all of the graphs are in there, all of these strategies and it was a number 1 best seller on Amazon.com so you get to go and get all these great strategies and you also get a free copy of the book. Also if you want to find out more about the seminars, we always have them posted. They’re on our website all the time, the ones that are coming up, so you can always check in at www.retiresecure.com for the latest on that. And we’ll be back in just a minute with more tax strategies as we get close to the tax deadline. It’s The Lange Money Hour: Where Smart Money Talks.
Beth Bershok: The Lange Money Hour: Where Smart Money Talks. I’m Beth Bershok, with Jim Lange and Steve Kohman today. We’re one week away from the tax deadline, going through some great strategies because it’s still not too late for 2008. If you have a question, its 412-333-9385. We’ve had people checking in from North Park and Penn Hills and we only have about 20 minutes left so if you have a question 412-333-9385. One quick second, Jim you mentioned just a few minutes ago about how important it is not just when you’re doing your returns but we really need to plan in advance some strategies, and it really helps to see a financial professional. When should you start doing that for next year? Looking ahead to 2009, is it too early now?
Jim Lange: If you go to particularly a firm that prepares tax-returns now and you say I want to do some planning for 2009, they’re going to have your head! On the other hand, one of the best times is actually after April 15th. After typically a return has been filed or extended and you are in a mind frame that you are thinking about taxes. Personally, I think one of the best times to talk to a financial advisor is actually after you have done something proactive. To learn a little bit before you go to the adviser such as going to a workshop or actually reading something and being motivated. Right now, there is such a fear of what’s going on with the economy that people are sometimes forgetting the big picture, and that is taxes can make an enormous difference and I would say particularly today, it’s even more important to get tax strategies right as well as investment strategies.
Beth Bershok: That’s why you should check with a financial professional?
Steve Kohman: I would say that yes, it’s important to go see your tax advisor for planning. Although part of that planning moves to occur early in the year. For example if you planned in the fall to do Roth conversions in January of 09 because you knew you weren’t taking your minimum distribution, you could of jumped on a really good opportunity when the stock market was at 65,000 and done a conversion when the taxes would have been very low on your conversion. So, the plans should be set up in advance, maybe fall is the best time for the CPA to see you.
Beth Bershok: Well because the CPAs are frequently golfing in April, May, June, July and August. Am I right?
Steve Kohman: Well late April maybe, yeah, ok
Steve Kohman: But yeah, the planning process will involve actions to be done throughout the year.
Beth Bershok: It makes it easier for you, I’m guessing? If clients come in and they’re doing some planning with you, it makes it much easier for you when you’re doing their return. Back to estate and gift tax laws; there have been changes..
Jim Lange: I’m going to throw in one more.
Beth Bershok: Ok, sure.
Jim Lange: Steve made a great point, if you had done it early you would have taken advantage of the benefit. Let’s say for example though, it went the other way. Then you would still have time to re-characterize then do another Roth IRA conversion. So sometimes earlier in the year is more appropriate than later in the year. People often come in for year-end planning, but sometimes early year or mid-year is even more effective.
Beth Bershok: Well sometimes year end planning, when you guys say year-end planning you mean 4th quarter but some people mean December 29th. So ..
Jim Lange: Sometimes it’s tough to get things done that late in the year, so it makes sense to get in there before Thanksgiving.
Beth Bershok: Ok, can we talk about real quick, I just want to get in that the gift tax went from $12,000 to $13,000 am I right?
Jim Lange: $12,000 to $13,000 is the amount of money you are allowed to give to an individual without eating into your once in a lifetime exclusion.
Beth Bershok: Oh it’s up to 13?
Jim Lange: Right so if you were in the habit, or if you are interested in making gifts to your kids, now you can give them, typically kids it could be anybody, but if you are in the habit of making gifts to your children and you want to give them the maximum amount that you are allowed to give without eating into your once in a lifetime exclusion, it would be $13,000 per beneficiary if you are married and your spouse joins in the gift that would be $26,000. And I am a big fan of gifting, assuming you can afford it and I happen to like 3 types of gifts. I like just straight forward gifts to children, say Happy Birthday or Merry Christmas or whatever it might be, here’s some money. I also like section 529 plans which are typically educational forms of gifts usually done for grandchildren, sometimes for children. And I also like Life Insurance, and in particular if you are married, second to die life insurance policies and I actually like a mix of all 3 of those types of gifts.
Beth Bershok: Well the Second to Die Life Insurance, that’s something else that we cover in our workshops too, and there’s a lot of great information on that in the book, Retire Secure!. 412-333-9385 about 15 minutes left if you have a question for Jim or Steve. Something else that Steve recommends is check to see if your children are subject to the Kiddy Tax. Steve, can you first of all explain what that even is.
Steve Kohman: Well the Kiddy Tax is almost a young adult tax now because they’ve raised the age for kiddies from 17 up to 24.
Beth Bershok: Oh that’s not a kiddy, that’s not a kiddy at all!
Steve Kohman: So basically the rule is if they have a lot of investment income, that i’s taxed at their parents marginal tax rate which ends up resulting in more tax. It’s something to be aware of, they’ve changed the rules in that regard. It’s a long held tax planning strategy to shift money to your kids so they pay income tax at their lower rates and it’s still a valid planning technique. The thing now is that even kids in college can have the Kiddy Tax applied to them so it’s a little complicated to go over in this show. It’s something tha’s changed and maybe not for the better but the planning opportunity is still there to transfer money to your kids. Transferring money to your kids is something that happens when you do the $13,000 a year gift like Jim was talking about. The gift is also a good strategy for estate planning because it reduces estate tax, but even people that aren’t subject to federal estate tax or subject to the PA inheritance tax, some planners never mention that it’s 4.5% tax for money going to your kids and it could be over 10% for money going to other people, other relatives. So it saves a lot of money doing gifting if you’re a person who has a lot of wealth and wants to transfer to other people sooner or later.
Beth Bershok: What’s the deadline for that from year to year, is it the end of the year?
Steve Kohman: Yeah that sort of thing is done every year on a calendar year basis, it can be done every year.
Beth Bershok: So it’s that amount every year, so now it’s $13,000 you could literally between you and your spouse do $26,000 every year to each beneficiary.
Steve Kohman: To each person without filing a gift tax return. But even if you go over those amounts, if the child or person needs a lot of money and you want to help them out, you can file a gift tax return it’s not always that complicated of a thing to do and we’d be happy to do it. Usually you don’t pay any tax when you file a gift-tax return unless your gifts total more than a $1,000,000 in your life.
Beth Bershok: I have a question just in general, because you know we’ve been mentioning that you should see a financial professional and do some planning. When you guys see new clients or you see tax clients at this time of year, what kind of information do you need them to bring? Because I know that some people, and this sounds like it’s really a joke but people do this, they bring like a big old shoebox and they have all kinds of receipts, and all kinds of documents just scattered around in the box. Makes it a little difficult, first of all I’m sure you’d like to see it organized but really what do you need to see so you can start making some plans for a client?
Steve Kohman: Well not only do you want to see all the 1099’s and deductions that the person has, the 1099 forms are critical of course and the W2s. They pretty much are sent to you in January, maybe February of every year, automatically. They come in a little envelope that says Important Tax Document here, so you just put it in the file and give it to your CPA. I prefer clients who take it out of the envelope so then I don’t get paper cuts when I open the envelope.
Beth Bershok: Well that’s getting a bit picky, Steve.
Steve Kohman: But other than that i’s lists of charitable contributions, business deductions and if you have other sources of income. You sort of make a list of that, it can be a handwritten list; it’s not that big of a deal.
Jim Lange: And that’s assuming you want to get your tax return prepared professionally. If you are in for a strategy meeting which is done with one of our sister firms, The Lange Financial Group as opposed to The Lange Accounting Group and typically those meetings would be with me. I’m actually more interested in a list of assets and a tax-return. We actually have a sample list of assets that have blank forms or blank spaces that you can fill in. So for me when I see a client I like to have in front of me a list of assets and a tax return.
Beth Bershok: But this is helping you do general financial planning, that is why you need to see that.
Jim Lange: Right, I’m much more interested in the big picture and in order to give somebody advice on the big picture, I have to know if they have $100,000 or $20,000,000 ..
Beth Bershok: Well it makes a big difference, it makes your strategy completely different. 412-521-2732 is the office number. So say for instance one of these things interests you and you want to some financial planning done that would be the number to call, 412-521-2732. I do have, we talked about earlier a special offer that we’re just tossing out tonight tha’s good for the next week and I’m going to tell you about that in just a minute. It’s the Lange Money Hour: Where Smart Money Talks.
Beth Bershok: We are talking smart tax money tonight, the Lange Money Hour: Where Smart Money Talks. I’m Beth Bershok, with Jim Lange and Steve Kohman. One week away from the tax deadline and we’re just minutes away from wrapping this show up, so if you have a question for Jim or Steve the studio line is 412-333-9385 get your question in here in the last few minutes. Now we have a special offer and that is an offer of a free extension and this is what me mean by that. First of all I should point out that this is for PA residents only. But here’s the deal. If you call the office and this office is in Squirrel Hill, and you say I want to take advantage of this free extension and I will give you the number here in just a second, the professional staff will actually do the paperwork for you. Now, at this point in time they’re really busy, they’re not going to have time to do your estimate which you still have to pay. So you’re going to have to take care of that but they will do the paperwork. They will make sure it’s delivered; they will make sure the check is delivered; and they will make sure it’s hand-stamped. They’ll take care of all of that and then they will meet with you after April 15th and make sure they can get your extension rolling. It’s 1-800-387-1129 and Jim and Steve, you guys are making that offer for any PA resident?
Jim Lange: Yes we are. Keep in mind though that the extension is an extension to file, it is not an extension to pay. So, if you owe money you have to take it in. One of the nice things about doing it with our firm, or for that matter most any CPA firm, is that we physically hand deliver the extension to the IRS. We get it stamped so there is proof positive that that extension went through as opposed to waiting until midnight on April 15th and you don’t know when the IRS actually gets it.
Beth Bershok: So you guys are willing to do that in the next week. You do have to call the office at 1-800-387-1129 and just give us your name and phone number and they will get that all worked out for you. Real quickly, you mentioned that it’s not an extension, it’s an extension to file its not an extension to pay. What if you miscalculate?
Jim Lange: You might owe a bit of penalty and interest. On the other hand, a lot of times you don’t owe anything. The most prudent thing to do, if you think you might owe something to probably put some money in when you file for an extension, just in case.
Beth Bershok: Just in case so you don’t end up with penalty and interest.
Steve Kohman: The typical procedure is that you would add your estimated tax for the first quarter into the extension payment so if your off by a little bit you’re going to be covered for 2008 and it will adjust the estimated taxes for the next year. So that’s the typical strategy, you add the first quarter estimated payment to the extension payment.
Beth Bershok: Now it takes out the confusion though if you take advantage of this free extension offer because you guys will do all of the leg work on it. So, 1-800-387-1129. OK looking ahead to 2009 and i’s not really too early to start planning. Steve has some ideas for you.
Steve Kohman: Here’s a planning technique not only for 2009 but also for your tax return for 2008 if you haven’t filed it yet. And if you did file it incorrectly you can amend it. But for people who take the standard deduction and own a home, there’s an additional deduction for real estate taxes that you didn’t have last year and in 2007 it didn’t exist. But for 2008 you get to add up to $1,000 on a joint return to your standard deduction amount for real estate taxes. Even a simple tax return can get this extra deduction and save you a couple of hundred dollars in taxes. That will again occur next year in 2009, and another good thing for 2009 people may not be aware of and now I’ll point it out. If you buy a new car between now and the end of the year, actually if you bought a car from February 16th, 2009 through the end of the year, you can deduct the sales tax on the purchase of the new car.
Beth Bershok: That’s new?
Jim Lange: That’s new.
Beth Bershok: I was going to say When did that one crop up?
Jim Lange: It adds on to your standard deduction so you don’t need to itemize deductions to do that. It’s good on sales tax paid on the first $49,500 of a new car.
Beth Bershok: I have to back up when you mention these kinds of things because it just seems like there are so many new things. Because I’m married to a CPA, I don’t do my own taxes so I don’t look at the return, so I don’t really know. Is this information in front of you when you are doing your tax return? Do you know to do this?
Jim Lange: Not always, people may get the forms and just fill them out the way they did last year. They may not be aware of that.
Beth Bershok: How would you be aware of that?
Beth Bershok: Umm, well let’s see, how would I not know? It’s hard for me to answer because I know!
Jim Lange: By the way that is an interesting point because one of the nice things about Steve is that he’s not only, and we really haven’t talked about this facet of his career. Where he does all the charts and he does all the number-running for Roth IRA conversions and after-tax dollars and Roth IRAs and the different strategies, which is already unusual. But what’s very rare is the combination of somebody who understands the strategies and understands the mechanics of doing the tax returns. I remember an old law professor of mine used to say If you don’t know where it is on the 1040, then you don’t really understand it! And I think there’s something to that and one of the advantages of working with Steve is that he has both.
Steve Kohman: One of the things about these tax laws that if you don’t pay attention you are not really aware of what is going on, you might make mistakes. One of the things people did in 2008 was they went out and bought an energy efficient improvement for their home, insulation, maybe new doors or new windows and thought they were getting a tax credit, and then they took it into their CPA and they had to be told They didn’t pass that law, it doesn’t apply for 2008.
Beth Bershok: Why would they though?
Steve Kohman: It applied to 2007 purchases everybody knew about it and said look at this tax credit, we’re going to get it for 2008 and then they went and spent the money and didn’t get it for 2008. They didn’t extend that part of the law which was expected to be extended. But the good news is for 2009 and 2010 the energy efficient home improvement credit has tripled to 30% with a new ceiling of $ 1,500, so it’s a much better credit and it will apply for 2009 and 2010.
Beth Bershok: How long do you have to file an amended return if you realized you made a mistake, or you missed one of these things. Let’s say somebody is listening right now, they already filed their return and they just found out about the car – the real estate tax. What if they just found out about that?
Steve Kohman: Well actually they have actually 3 years to file an amended return from the due date of their original return which will be 3 years from the April 15th of this year, so its quite a good bit of time. You have plenty of time to correct a return.
Beth Bershok: I want to real quick, because we are running out of time, this is always a question, married filing jointly or married filing separately. How do you know which one to do?
Steve Kohman: Well it’s typically better to do married filing jointly. Married filing separately is worse than single filing which you aren’t allowed to do once you’re married. So your status of marriage at the end of the year dictates how you have to file. You can’t file single if you’re married on December 31st and there are situations where it could be a tax benefit to file separate returns. It takes some considerable calculation to come up with that result. Our office handles that, we use computer programs to calculate the advantage that that might be.
Beth Bershok: Jim, any last minute thoughts on your 2008 taxes before we wrap up?
Jim Lange: I think the important thing is think long-term in addition to short-term. Get in the Roth IRA contributions for yourself, for your spouse, maybe even your kids. Do the non-deductible if your income is high enough and move forward and plan for the future.
Beth Bershok: And I want to recommend strongly, one of our workshops because they are coming up. I want to mention the dates again. Next Saturday which is April 18th, Comfort Inn Rodi Road 9:30 to 11:30 in the morning, 1to 3 in the afternoon. Same times for May 16th which is also a Saturday. That’s at the Sheridan Four Points in Cranberry and you can register by calling 1800-748-1571. You can also check out our website which is www.retiresecure.com. And I want to mention that by next week the audio to this show, if you missed it and you want some more ideas will be posted on that website so check it out at www.retiresecure.com. Thank you so much Steve for joining us. Are you going to get back to the office and do more returns tonight or.
Steve Kohman: I’ll be up till midnight. The end is coming soon.
Beth Bershok: Jim Lange, Steve Kohman, thank you guys so much. We have a very special guest, two weeks from today, Paul Merriman, and we’ll be telling you more about that on our website, www.retiresecure.com. It’s the Lange Money Hour: Where Smart Money Talks.
Prepare yourself for the best in Roth IRA conversion information available today! Jim Lange, JD/CPA, is now available to train your team anywhere in the country – training financial advisors and insurance professionals. For more information on Jim’s availability and fee, contact Nicole DeMartino, CLTC, Marketing Director at 412.521.2732/1.800.387.1129, nicole@paytaxeslater.com or visit http://www.retiresecure.com/speakertour.php.
Solar Panel Installation Time-Lapse – City of Allen MCPAR Building
While Texas remains the state with the highest percentage of uninsured residents in the nation, a key question is what is the impact of that, from a human and pure economic standpoint.
A December 2006 report by the Texas Health Institute, sponsored by Methodist Healthcare Ministries, indicated that the costs are substantial, both from a social and economic perspective.
A summary of the issue indicates that a higher than national average of people living in Texas, including those living in Houston, Dallas and Austin, remain without health insurance. Compared with the national average of 18% uninsured (in 2005), some 27% of Texas residents did not have health insurance, about 5.5 million people. Of that number, 20% of children 18 years of age or under were without health insurance and 31% of adults aged 19-65 were uninsured.
The definition of “access” to healthcare is having coverage available and affordable for each individual.
The Texas Health Institute report quotes the Kaiser Family Foundation in making the connection between health insurance and the relative health of an individual.
“Health insurance makes a difference in whether and when people get necessary medical care, where they get their care, and ultimately, how healthy people are. Uninsured adults are far more likely than the insured to postpone or forgo health care altogether and less likely to be able to afford prescription drugs or to follow through with recommended treatments. The consequences of reduced access to care can be severe, particularly when preventable conditions go undetected.
The Texas Health Institute report makes the point that having health insurance makes a difference in whether and when people get necessary medical care, where they get their care, and ultimately, in how healthy people are. “Uninsured adults are far more likely than the insured to postpone or forgo health care altogether and less likely to be able to afford prescription drugs or to follow through with recommended treatments,” said the Report.
When it comes to the real cost of not having health insurance, reduced access to care can be severe, especially in cases where an otherwise preventable condition goes undetected. In the case of cancers, the report states that being uninsured is associated with fewer cancer screenings and an increase in premature deaths for cancer patients, as well as fewer services for trauma and heart attack patients and an increased risk of death when they are hospitalized.
While 53% of Texans participate in an employer-sponsored health insurance plan, the remainder of state residents have limited choices for coverage. Individual policies from an insurance company account for just 4% of residents and public programs such as Medicaid cover another 12%. The Texas State Children’s Health Insurance Program has eligibility guidelines regarding income and other criteria.
The end result, says the Institute of Medicine, is that uninsured adults have a higher overall mortality risk of 25%. Extrapolated, there are more than 18,000 excess deaths annually among uninsured people ages 25-64.
Health insurance affects health status, and various studies show strong links between people with more education having better health, and people with less education and less literacy having poorer health. One national study estimated that $73 billion is spent annually in avoidable health care costs due to low literacy. Education affects job choices and future income, which, in turn, can affect health status.
For students who miss school or cannot concentrate due to temporary or chronic health conditions, the educational system is not as effective, which can lead to lower academic achievement. In addition, school absenteeism affects school district finances, as funding is at least partially based on attendance.
The high number of uninsured people has other consequences as well, including the issue of uncompensated care at hospitals. Those costs are typically passed to taxpayers in the form of higher property taxes for the hospital districts of the metropolitan areas of Texas, including Dallas, Houston and Austin.
In Texas, the cost of uncompensated care (bad debt plus charity care) for hospitals (which bear the brunt of uncompensated care costs) was estimated to be $7.7 billion in 2003. Even so, hospitals do not share equally in uncompensated care costs. Government and not-for-profit hospitals have the most. In a study examining 193 hospitals in Texas, the 53 that were categorized as safety-net hospitals accounted for 59% of the total uncompensated care in 2003.
While the nine Texas counties that lie on the border with Mexico have high uncompensated emergency care — about $393 million in 2000 — other areas of Texas also have high uncompensated care rates, especially Parkland Hospital in Dallas, one of the busiest hospitals in the U.S. In 2002, Parkland had $410 million in uncompensated care, of which about 20% was estimated to be due to emergency and non-emergency care for undocumented patients, those who are ineligible for most federal programs such as Medicaid, but must be treated if they come to hospital emergency rooms with an emergency medical condition.
The uninsured rate also affects Medicaid reimbursements due to the fact that the state loses the federal Medicaid matching funds for treating those patients.
What is clear is that not having health insurance is an issue that remains at the forefront of public concern in Texas, both from an economic and social perspective.
free state taxes nc What am I doing wrong on my taxes?
I’m 18 and last year I did my taxes on turbo tax free edition and got $400 back and had to pay $5 to the state of nc. This year I made a lot more on my W2 bc I just graduated high school then worked full time and I earned around $15,000 in 2009. Why is it saying on turbo tax I’m only gonna get $45 back? Could I be doing something wrong or should I take it to someone to do them? But I’d hate for that to be the true amount I can only receive and then I pay that to someone that does what I could of done. I need a solution please some helpp!!!
and in 2008 I made around $11,000
Getting back only $45 is a good thing. It means your withholding allowances are accurate for your situation.
When you get a refund, it’s not like the government is handing you free money. Rather, YOU gave the government a free loan and they are simply paying you back your money without interest.
Discover the Greatest Investment Tool of All Time! The tax breaks and loopholes built into real estate make it one of the most profitable investments in the world. In fact, the real estate tax exchange loophole–known as the 1031 Exchange–is one of the greatest tax loopholes in existence. This loophole allows a real estate investor to sell a property without paying a penny in capital gains…
This is the first of a series of 2007 Tax reference sheets that I will share with you over the next Month or so. This focuses on some of the most important federal figures. I will continue for those estate planning, retirement planning and business planning to do in the the not too distant future so stay tuned.
Since federal taxes are such a big part of most peoples life or spending, I thought you might A summary or reference sheet for some of the key figures for 2007 as.
Many people believe that if someone in the 28% tax bracket, they all pay taxes due in the amount of 28% of taxable income. This is incorrect. A married couple with a taxable income of $ 125,000 will not pay 25% income tax on ALL of the taxable income … but only on everything over $ 63 700. The first $ 15,650 is taxed at 10%, 63 700, the taxable income of $ 15,560 – $ Would be taxed at 15% and so on. The following figures are taxable income (after deductions and exemptions).
I'll start with the tax brackets for the 2007 tax year. The figures below show the various "stages", as the marginal income groups are taxed progressively higher.
Married, filing jointly:
$ Zero – $ 15,650 is taxed at 10% $ 15,650 – $ 63,700 is taxed at 15% $ 63,700 – $ 128,500 is to 25% tax $ 128,500 – $ 195,850 is taxed at 28% $ 195.850 – $ 349,700 taxed at 33% lies more than $ 349,700 is taxed at 35%
Married, filing separately:
Note: Often it makes more sense for a married couple to file taxes separately for either tax reduction strategies or for non-tax reasons. Your tax adviser should help decide if there are important reasons to take advantage of this filing status.
Tax brackets for married filing separately: Cut out the above numbers in half for taxpayers, these six tax brackets
Single:
$ Zero – $ 7,825 is taxed at 10% $ 7,825 – $ 31,850 is taxed at 15% $ 31,850 – $ 77,100 is taxed at 25% $ 77,100 – $ 160,850 is on 28% tax $ 160.850 – $ 349,700 is taxed at 33% more than $ 349,700 is taxed at 35%
Single, Head of Household:
$ Zero – $ 11,200 is taxed at 10% $ 11,200 – $ 42,650 is taxed at 15% $ 42,650 – $ 110,100 is taxed at 25% $ 110,100 – $ 178,350 is on 28% tax $ 178,350 – $ 349,700 is taxed at 33% over $ 349,700 is taxed at 35%
Standard deduction:
Standard deduction is only for those expenses, such as itemize mortgage interest, not charitable contributions, etc.
Married, filing jointly: $ 10,700 Married, Filing separately: $ 5,350 Single: $ 5,350 Single, Head of Household: $ 7,850
For those who are blind or over 65 Can $ 1,050 (married ADD) or $ 1,300 (if single or head of the household) to the above-mentioned standard deductions
Personal exemptions:
Personal exemptions are allowed at $ 3,400 per person subject PhaseOut (the reduction of the exceptions set) based on taxable income. This is not a problem if your taxable Income at least $ 117,300 (depending on registration status).
Maximum taxable earnings subject to FICA tax: $ 97,500
The Social Security and Medicare combined tax rate 15.3% on income up to that number W-2 employees pay half of the 15.3% and the employer pays the other half. Self-pay the entire amount.
Long-Term Capital Gains and Qualified Dividend rates: For those who are in 10% and 15% income tax brackets only: 5% For taxpayers in the higher tax Backet: 15% Capital gains on collectibles (coins, stamps, etc.) 28%
A major feature of a financial adviser is to help reduce taxes on your statutory minimum wage by by all appropriate deductions, methods and strategies. A good accountant is worth its weight in gold! So go find a proactive accountant, not someone who just files tax returns.
And now, hopefully you have a better Idea of what this person says.
Udaya TV Varthegalu – Last day of Filing income tax in India & eLagaan
The State of Texas provides several veteran benefits.
(VLB), a division of the Texas General Land Office, administers three veterans’ loan programs: The Land Loan Program, Veterans Housing Assistance Purchase Program, and the Veterans Home Improvement Loan Program. Learn more about the Texas Veterans Land Board Programs
Texas State Veterans Homes
The Texas Veterans Land Board (VLB), a division of the Texas General Land Office, administers the Texas State Veterans Homes program.
Texas Financial Assistance Programs
Tax Exemption for Veterans. Disabled veterans who meet certain requirements, their surviving spouses and the spouses and minor children of a person who dies on active duty in the U.S. Armed Forces are eligible for property tax exemptions on the appraised value of their property. The exemption is mandatory and applies to taxes levied by all taxing authorities in the State. A veteran, whose service-connected disabilities are rated less than 10% by the Department of Veterans Affairs, or a branch of the Armed Forces, is not entitled to a property tax exemption.
Texas State Veteran Education Benefits
The Hazlewood Act. Wartime veterans who were legal residents of Texas at the time they entered military service, and Home of Record is listed as Texas on the DD214, are entitled to a waiver of tuition and some fees at State-supported/public (taxpayer supported) colleges and universities. This benefit is also available to children of Texas servicemen and women who died or were killed in military service, and to children of Texas military personnel who are shown to be missing in action or prisoners of war. Also eligible are children of members of the Texas National Guard or the Texas Air National Guard killed since January 1, 1946, while on active duty either in service of Texas or the United States. Learn more
Texas Veteran Employment Programs
Veterans Preference. Wartime veterans have preference in employment with State agencies or offices, as do widows and children of those killed on active duty. State agencies must practice veterans’ preference until they have reached 40% veteran employment. Non-retired veterans who are employed by the State of Texas are entitled to claim their active duty military time toward retirement, provided they present a proper request and pay to the Retirement System the specified amount of retirement contribution for up to 60 months’ military credit. Such contribution is paid at the rate which was applicable at the time the employed veteran first was covered by the state Retirement System, plus any accrued interest.
Additionally, a veteran is entitled to reemployment rights with his last employer when he is released from the Armed Forces of the United States, providing his absence is not longer than four years. The right of reemployment is available regardless of whether the veteran was, prior to service, employed by the State, county or city government, or by private industry. Reemployment rights of veterans are now provided by both State and Federal laws. Learn more
Other Texas State Veteran Benefits
Texas State Cemetery Program. In the November 2001 statewide elections, voters overwhelmingly approved Proposition 7, a constitutional amendment that authorized the creation of up to seven state cemeteries for veterans and their eligible dependents. The cemeteries will be built and operated through a partnership between the Texas Veterans Land Board (VLB) and the U.S. Department of Veterans Affairs (USDVA). The USDVA will fund up to 100 percent of the construction and equipment costs. The state will own and operate the cemeteries and fund most of the cost of operations. Learn more
No-Cost Medical Records
Under the Health and Safety Code, Chapter 161.201 Subchapter M, Medical or Mental Health Records, Texas veterans are eligible for no cost medical records when they are obtained to file a claim for a disability against the U.S. Department of Veterans Affairs (USDVA). The health care provider or health care facility is not required to provide more than one complete record for the patient or former patient without charge. Also, it should be noted, that some medical facilities will charge a small administrative fee for obtaining the records.
Free Drivers License for Disabled Veterans
Under Texas Transportation Code Title 7, Chapter 521, Section 521.426, Texas drivers licenses may be furnished free of charge to veterans who have service-connected disabilities rated 60% or more by the VA or by a branch of the Armed Forces of the U.S. Application must be made prior to the time present drivers license expires. Application forms may be obtained from Department of Public Safety’s license examining offices located throughout the State. We have provided a link to the to the Texas Department of Public Safety’s Drivers License information website. Application forms should be completed by the veteran and forwarded to the VA for verification of service-connected rating of 60% or more. If a veteran was disability-retired from military service and has no VA claim file, proof of disability must come from their respective branch of military service.
Fishing and Hunting Licenses for Disabled Veterans
Disabled veterans are eligible for special hunting and fishing licenses, at a reduced cost. A disabled veteran of the Armed Forces of the United States is one who has a service-connected disability, as defined by the Department of Veterans Affairs, consisting of the loss of use of a lower extremity or of a disability rating of 60% or more, and who is receiving compensation from the United States for the disability. A resident veteran as described in the law may hunt wild turkey and deer without a resident hunting license if he has acquired a resident exemption hunting license. We have provided a link to the Texas Parks and Wildlife website for your convenience.
Free Park Admission for Disabled Veterans
Free admission to Texas State Parks is available to any veteran who has a service-connected disability, which is rated 60% or more by VA, or a service-connected disability, which has resulted in the loss of a lower extremity. Application may be made at the headquarters office of any Texas State park by providing satisfactory evidence of service-connected disability. If such evidence is not readily available, it can be obtained from the VA regional office where the claims folder is located. The Texas State Parklands Passport is available to any veteran who meets the disability requirements, whether or not he or she resides in Texas. The Passport provides only free admission to the State parks, and does not exempt anyone from payment of other charges, such as camping fees, etc. We have provided a link to the Texas Parks and Wildlife website for your convenience.
Free Recording of Discharges
Under Texas State law, Local Government Code Sec. 0192.002, the County Clerk in each County is required to record, free of charge, the official discharge of each veteran who served in the Armed Forces of the United States of America. This free service is very important as it provides veterans with a ready source from which they can obtain a certified copy of their discharge whenever it is needed. It is the veteran’s responsibility to have the DD214 or Discharge recorded. Please also note that if you do record your DD214 with the County Clerk, it then becomes a public record. Note that the Texas Veterans Commission does not keep a record of your DD214 or Discharge.
Special License Plates
Disabled Veterans, Former Prisoners of War, Pearl Harbor Survivors, Purple Heart and Medal of Honor plates are among the special license plates available to eligible veterans and their survivors for personal use on their automobile or light commercial vehicle of one ton or less. Disabled veterans must have a service-connected disability rating of 50% or more or 40% due to amputation of a lower extremity. Former prisoners of war are eligible if they were captured or incarcerated by an enemy of the United States during a period of conflict with the United States and at the time of the capture, were citizens of the United States. Eligibility is for both former members of the Armed Forces and civilian U.S. citizens who were captured by an enemy of our government. For further information, contact either the nearest vehicle title registration office or your county tax office.
Currency Revaluation Wipes Out Saving Accounts, Stimulous Losing Jobs, State Taxes Drop
Maryland Taxes- How They Are Different From Taxes In Other States
Maryland enjoys honor of being one of the oldest and wealthiest sates of the Union. There are total of four brackets of income tax in Maryland taxes ranging from 2% to 4.75%. Maryland being one of the last states to undertake this also levies piggyback taxes at local level also. These piggyback taxes ranges from 1.25% and go until 3.2%.
In Maryland state, commerce plays an important role in its economy and these revenues supports it. To keep running the state, Maryland needs to keep its busy ports functional and clean for which it requires money which is generated by these Maryland taxes.
You would be surprised to know that the property taxes are not specified in Maryland. However, sales tax is levied at 5% in the state. Moreover, the rates are adjusted in a manner so that it can help provide essential revenues from one county or city to another.
Such adjustments are done annually and are disclosed via a public announcement to dicuss the new tax rates. Taxes in the state are assessed both on land as well as land improvements. An appraisal of the market value of property is done and then it is taxed according to its assessed value. Expanding businesses can even receive credits upon the improvements for their property. Maryland taxes exempt properties used or owned by churches or by any other non-profit organizations.
Maryland taxes are set up like many other states to assist in boom of businesses. Whenever any business establishes itself in Enterprise Zones, it not only improves the value of other commercial properties but also receive tax credits which can last up to ten years or more altogether.
Enterprise Zones are those zones which were considered economically distressed. If you are a developing company then such combination of land tax credits would ease your burden to a large extent. Businesses can also be benefitted by credit upon their Maryland taxes by specializing in fields such as research and development or biotechnology. Women and minority owned businesses would also receive good incentives.
If you compare the taxes in Maryland with other states you would find it to be considerably very higher. Many people who work in nation’s capital usually belong to Maryland only. It would not be wrong to say that the state is highly progressive and notably diverse in numerous ways. Most of the taxes are now imposed at county or city level along with state taxes.
No city, county etc. are deprived of funds as there is abundant revenue with them. Local tax revenue funds all the programs, parks or schools and they stay well funded. It is becoming a center for many businesses as various types of tax credits are often offered to new and old companies.
To avoid an unexpected tax, while the owner of your property in France, it is important to the French tax system know. Here we describe the main sources of tax in France and explain how they may affect.
Tax: Should They live in France, you will be taxed on your total income, whether in France or produced abroad. It does not matter what nationality you if you have more than 183 days per year in France you spend as a residence and French still taxed on your world wide income is taken into account. For those who do not live You are in France still responsible for all income sources, French, this includes rent from letting your property and any income from work in the country come from. The authorities in both countries in which they normally live and France will be interested and your earnings if it is above a certain threshold, that you might be responsible in both countries unless there is a double taxation treaty between the countries, as among all EU members and many other countries. However, it is very important to make the authorities if you are a permanent move to France before the event to a message advantage of this Treaty. It should also be noted that France will not be deducted in the tax using the PAYE system as in England, but each individual must fill in their own self- Form, where taxes are paid, the income earned in the year following the first running from January until December 31. You must first click on the "Centre des Impôts" the tax center, you must register.
Income tax, ranging from tax on "earned income" that a progressive tax on Tax is imposed on "unearned income" as income based on interest from bank accounts and property yields. There is a separate tax on your gross rental income off when you leave your French property. France still strongly favors the unity of the family and there are clear advantages in terms of reduced tax liability, If you are a big family is assessed as a tax on a budget. If you are married and / or have children in the family, you pay less tax, as it increases maintenance is granted, which is called the "quotient familial". There are also other allowances such as child care and domestic help, all of which makes towards large families French pay less taxes than go nowhere else in Europe. If you are married and then only by the United PACS agreement, you are probably paying more in taxes than married not only in terms of income tax but also inheritance tax.
Property Tax: Two property tax exist in France: Taxe fonçière and taxe d'habitation. Fonçière tax is payable by the lessor, regardless of whether you live there or abroad, but there is an exception for two years for newly built properties. Taxe d'habitation on the other side, who take the building at the time, so if it is rented it is paid by the tenants. Both taxes form part of what we know, in Britain than council tax and paid in the year after the rental period with special allowances for pensioners and dis-used properties habitable.
Capital Gains Tax: This tax is on profits of a property which was sold to jewelry to pay securities, equities and real estate. But fortunately there are no taxes on be paid for the sale of your principal residence, but only to the sale of additional property. People who rent their primary residence are exempt if they are their second home for sale, as well as those who have owned the house for 15 years or more. If a property within two years, then sold it is subject to 33.3% capital gains tax and this falls by 5% per year, multiplied by an index linked dimension of the final sales price of the property to 15 years to pay. If you renovate your property or spent money on legal or agency fees The cost of this can be offset against your profits.
Inheritance Tax: The system in France is quite different than what you might find in England or elsewhere and it is advisable to speak to a tax advisor before you buy your property in France to prevent future Burden for your family or partner. Whether you lived not in France or do you still will correspond to French inheritance law and family, be liable Inheritance tax in France to pay after your death. It is also important to note that French succession law will not allow you to leave out one of your children the benefit of Your spouse and will make sure that they get their share. However, there are a number of different ways to their burden, depending on your situation to minimize. Below we outline a number of different contracts that can be made. A very popular and useful tool for reducing your relatives 'Inheritance tax if the tax in France is greater than to make it in your home country, is a SCI, which is a property holding company. The property in Question can be divided into shares and the shares may, as you like with the result that any future inheritance tax is on the property, subject to the laws of Country in which you are resident distributed. There is also a good solution for the complex in a family situation living with people who are not members of their family. The shares can be freely given to a partner or children, to avoid the inheritance tax will be if this happened at least 10 years before the death of the owner of the shares. For married couples who want their half of the property to the surviving spouse then go to the "clause tontine" is a good option. It's like a joint tenancy agreement and highlights the significant ownership of the property until either spouse dies, so that the entire estate of the surviving spouse is property. They will, however, have yet to inheritance tax on half the property to be paid. Another way to ensure that your half of the land in question goes to your spouse, is an alteration of the matrimonial so that your properties are no longer separate. You have been married for at least two years and ready to some legal fees to pay, but it will mean that the surviving spouse only 1% tax is charged on the property have a "registration tax". This system can be complicated if there are children involved from current or previous marriages, as they have taken on certain rights to be given the ownership and legal advice. In 1999 a new contract called PACS was also brought in under French law, certain benefits to same and different pairs, not previously available. This Inheritance rights and fiscal policies are not as beneficial as the married couples are available but certainly an improvement over the previous situation.
Property Tax: This is a tax on assets exceeding € 720 000 and covers a wide range of assets to your property and bank balances include, among others. If you live in France but not domiciled there, then will be taxed only what you have in France. If there also is resident then the tax applies to your entire Wealth in the world.
This comprehensive handbook covers areas of possible conflict for all horse owners and equine businesses, no matter the size, breed, or discipline.Topics covered include:Legal status of animals as propertyAnimal rightsTypes of business ownershipDispute resolutionEstate planningAnd much, much more! Author Milton C. Toby has a law practice in Georgetown, Kentucky. In addition to practicing law, Toby…
You may have heard or read about people who have purchased land for back taxes at incredibly low prices. Such properties ARE available for purchase through a number of various means. And it is also possible to use such properties as an investment that will yield higher rates of interest than are available through your bank. Although the rules and procedures vary considerably from one area to anoth…
Money Management & Credit : How to Buy Land That Is in Bankruptcy Court & Back Taxes