Reap the Tax Benefits of Education Planning

The tax code includes a number of incentives that, with proper planning, can provide tax benefits while you, your spouse, or your children are being educated. Education Financing – A major planning issue is how to finance your children’s college education. Those with substantial savings simply pay the expenses as they go, while others begin setting aside money far in advance of the education need, perhaps utilizing a Coverdell account or Sec. 529 plan. Others will need to borrow the funds, obtain financial aid, or be lucky enough to qualify...

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Inheritances Can Be Tricky

If you have received an inheritance or anticipate receiving one in the future, this article may answer many of your questions. The process of claiming an inheritance can be quite complex and it helps to understand the basics and to be aware of potential tax liabilities. An inheritance is generally received after all applicable taxes have been paid along with any outstanding liabilities the decedent may have had. Exactly how the estate is handled will depend upon whether the assets were owned individually or in a trust. Without going into the intricacies...

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Haven’t Filed an Income Tax Return?

If you have been procrastinating about filing your 2011 tax return or have other prior year returns that have not been filed, you should consider the consequences. Taxpayers should file all tax returns that are due, regardless of whether or not full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. All payment plans require continued compliance with all filing and payment responsibilities after the plan is approved. Facts about Filing Tax Returns Failing to...

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What's Best, Tax-Free or Taxable Interest Income?

A frequent taxpayer question is whether it is better to invest for tax-free or taxable interest. Generally, taxable interest will provide a greater return, but this may not hold true after taking into account taxes on the income. Therefore, the question is really which provides the greater "after-tax" return. Making a decision will take on another layer of complexity for higher-income taxpayers beginning in 2013 when the new surtax called the Unearned Income Medicare Contribution Tax is imposed on the unearned income of individuals, estates,...

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Assisting Your Child to Acquire a Home

If you are a parent who wants to assist your child in obtaining his or her first home, there are a number of ways you can help. Help with the down payment - Real estate lending laws generally will not allow the parents to loan the down payment on the home, since that is considered part of the debt. However, you can make an outright gift of the down payment. Just keep in mind that to avoid reducing your lifetime gift tax exclusion and filing a gift tax return, the gift cannot exceed the annual $13,000 gift tax exemption. If you are married, the...

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October 2012 Due Dates

October 2012 Individual Due Dates October 10 - Report Tips to Employer If you are an employee who works for tips and received more than $20 in tips during September, you are required to report them to your employer on IRS Form 4070 no later than October 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for...

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