With tax season upon us, my eye catches anything related to tax tips that can save me money! Because I am posting this does not make me an expert on the subject, however! I just offer what I read as point of information and to remind you to ask your tax professional about these subjects to see if they apply to your individual situation!
Since many of my clients make gifts to their children or grandchildren, I took note of the fact that you can give up to $13,000 to any individual without having to declare or file.
Homebuyer Credit. It originally expired in 2009 but was extended through April, 2010. It said if you purchased a home by April 30, and closed by September 30, 2010, you may be eligible for the credit. But the part that caught my eye and that will be a subject of conversation with my CPA, is the fact that there was also a provision made for existing homeowners. They may qualify for up to a $6,500.00 credit if they have lived in the same home as your principal residence for 5 consecutive years within the last eight years. Of course, you have to be an accountant to understand all that followed in the explanation. But, if you fit the category, make a note and ask your tax professional about it!
Home energy credits are available up to $1,500.00 if you made improvements that improve the energy efficiency of your home; windows, high efficiency furnace or water heater, etc.
If you are a teacher and you are not reimbursed for all of the supplies you purchase for use in your classroom, you can take up to $250.00 deduction.
Capital Gains rates should be checked carefully if you have sold property in 2010.
There are some new rules on IRA’s; may want to ask questions if you have one.
Contributions to qualified plans seem to have changed also. But, what caught my attention is the conversion of a traditional IRA to a Roth. Since I teach people how to create their own privatized banking systems, which allows money to grow taxed deferred and allows access to your funds without taxation penalties as well as tax free withdrawals and supplemental tax free retirement income, I am always interested in one’s rationale for contributing to a plan that will tax the harvest instead of the seed! To that end, I noticed that you can convert a traditional IRA into a Roth and although you will pay tax at your regular rate, you can incur the liability over a two year period. Thus, it makes it easier to convert and minimize your tax burden in the future.
Finally, if you are contributing to an investment for retirement, qualified or not, and your funds are not working for you, beware, there is an alternative. Contact me and I will forward a pamphlet that will offer another alternative to traditional investments. This alternative is tried and tested, has guaranteed growth that is tax deferred without market risk and allows access to your funds at any time.
CPA comments are welcomed!
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