You won't get rich, but tax laws will give you some profit -- if you make the right investments.
OK – I confess.
I like pushing the envelope, as long as I stay well within the sometimes elastic boundaries of fraud.
Here’s an idea that I like because it’s clearly legal and very simple to understand:
Let’s assume you borrow $100,000 at 5%. You pay interest of $5,000. But, if you’re in the 35% bracket, your tax bill shrinks by $1,750. So, you’re really only out of pocket $3,250.
Now take that $100,000 and invest it in a stock with a 4% dividend yield. That puts only $4,000 in your pocket.
Some tax breaks that expire after this year are available even to those who don't itemize.
Every year you have to make a decision -- itemize your deductions or take the standard deduction.
The answer was normally simple. Elect the one that gives you the biggest deduction.
But, this is the year for hybrids, and that now applies to the standard deduction as well. Instead of a simple flat number, the new supercharged 2009 standard deduction is a mixture that includes expenses only allowed in the past if you itemized.
|Tags:||1040federal taxJeff Schnepperreal estatetax breaktax deductiontax formstax preparationtax returntax write offstaxesTips|
Higher taxes may keep high-income people from moving to state, study finds.
This article comes from Ashlea Ebeling at partner site Forbes:
A new study suggests that states that target the rich for tax hikes may pay a stiff price.
It's not just that some wealthy people may flee those states. The bigger problem is that they won't move there.
At least that's the implication of a new analysis of wealthy folks' movements into and out of New Jersey from 1999 through 2008. In all, the state suffered a $70 billion net outflow in wealth from 2004 through 2008, compared with a $98 billion net inflow in the prior five years. The Garden State's reversal in fortune was due to a large drop in the number of wealthy households entering the state and a moderate increase in the number of wealthy households leaving.
Anyone who makes up to $57,000 a year can use Free File. But you still might want to visit an accountant.
I make a lot of money filing tax returns -- almost enough to cover my daughter Allison’s charge bills for January.
But sometimes credibility is more important than greed, even if I am an attorney. Please don’t let this out or I’m going to be tarred, feathered and banned from all future Bar Association meetings.
You don’t have to pay huge accounting fees just to put numbers in boxes. In fact, if you had less than $57,000 in income in 2009, you can file your federal income tax return free at the IRS website, www.irs.gov.
An interactive tool lets you see how tax rates and spending have changed in the past 70 years.
As you fill out your tax return this filing season, you might find yourself wondering where that money you forwarded to Uncle Sam via payroll withholding is going.
If you end up owing even more once your Form 1040 calculations are complete, the question is even more pressing.
Well, USA Today has developed an interactive tax tracking tool.
When it comes to small-business taxes, you have to pay the piper. But there are ways to delay the big bill.
By Elizabeth Blackwell, TheStreet
Small-business owners are going over their 2009 financial records with various levels of dismay. Most are counting every penny. Yes, the economy seems to be picking up (gradually), and revenue may have stabilized (somewhat). But that doesn't make the looming tax bills any easier to pay.
Which leads some to wonder: Is there a way to postpone the blow? Given that so many businesses are struggling, might the Internal Revenue Service be willing to make a deal?
First, the good news: If you're in really dire straits, you can buy yourself time by delaying certain payments. If you act in good faith and follow the correct procedures, that might be enough to get you through a bad patch.
Combining tax-free home rental with charitable donation is a win for both you and your favorite cause.
Here’s an idea you can use to do good, and make out at the same time.
Once you get the basic concept, it makes a lot more sense than the gobblygook we call the Tax Code.
Here’s the secret. There’s a section in the Tax Code that allows you to rent out your house for as much as 14 days tax-free. Rent it the 15th day, and all of the income is taxable. But keep it to 14 or less and there’s no federal tax on the cash.
Add up deductions, credits for children, a few other credits and soon you're up to $79,000 in tax-free income.
You knew I had to get around to this one eventually.
In 2004, 2,833 individual tax returns were filed showing incomes of $200,000 or more with absolutely zero U.S. income tax liability. In 2005, the number jumped to 7,389, increasing to 8,252 in 2006. I’m still waiting for updated figures, but you get the idea.
These people were able to avoid paying taxes by the use of sophisticated tax strategies devised by high-priced and very professional tax planners, who guide their clients along the cracks in the Tax Code.
But, it’s not too difficult for you to get the same result.
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