You only have to examine your paycheck to realize certain income is tax-free. For example, health insurance premiums paid by your employer are generally not includible in your income. Do you know the tax status of other types of income? Here’s a short quiz to test your knowledge. 1. You tell your son he’ll be the sole beneficiary of your estate, and that you’ve decided to give him an advance on his inheritance. You hand him
If you’re approaching retirement and are eligible for social security, you have three broad options for drawing your benefits: start early, wait until your “full” retirement age, or hold out a few years longer to qualify for the monthly maximum. *Early withdrawals. Starting your withdrawals at the earliest allowable date (age 62) may be a good idea if you (a) plan to stop working or cut back to part-time status, and (b) really need the income.
With the recent economic downturn experienced by many taxpayers, there is a tax concept that is very important: cancellation of debt. You would think that the cancellation of debt by a credit card company or mortgage company would be a good thing for the taxpayer. And it can be, but it can also be considered taxable income by the IRS. Here is a quick review of various debt cancellation situations. * Consumer debt. If you have
Savvy investors often spread their risks by investing in a variety of asset classes such as stocks, bonds, commodities, and real estate. But with a changing tax landscape, investors might consider three more classes: taxable, tax-deferred, and tax-free. In days gone by, taxpayers often worked under the assumption that their tax bracket would be lower after they retire. Therefore, a common strategy was to defer as much taxable income as possible to the golden years. Now,
Starting and running a business is rarely a safe or simple process, and doing so with one’s spouse creates an additional layer of complexity. Whether that complexity will have a positive or negative effect depends on several factors. Here are some of the questions you need to discuss before going into business with your spouse. How well do you work together at home? If you cooperate and collaborate for domestic chores, you’ll probably carry that pattern
The IRS has published depreciation limits for business vehicles first placed in service this year. Because 50% bonus depreciation is allowed only for new vehicles, these limits are different for new and used vehicles. For new business cars, the first-year limit is $11,160; for used cars, it’s $3,160. After year one, the limits are the same for both new and used cars: $5,100 in year two, $3,050 in year three, and $1,875 in all following years.
June 15, 2012, is the due date for making your second installment of 2012 individual estimated tax. Your check to the United States Treasury should be accompanied by Form 1040-ES. June 15 is also the due date for calendar-year corporations to make their second quarter 2012 estimated tax payment.
A small but growing percentage of real estate is being sold at auction. The advantage of an auction for a seller is that the property will definitely be sold quickly, although usually at a lower price. So auctions often attract sellers who simply want to unload a property, such as a lender that has foreclosed on it, or an executor whose heirs want cash and not real estate. Auctions often attract buyers who are looking for
The Americans With Disabilities Act was passed 20 years ago and required retail and other commercial business owners to renovate their properties to make them accessible to the disabled. For the first time since then, the U.S. government has comprehensively revised the requirements. The new requirements will go into effect on March 15, 2012. The changes include new rules for the following: van-accessible parking, maximum height and “reach ranges” for certain objects, service animals, communication devices
Karen George had a lovely apartment on New York’s Upper West Side, except for one thing – her downstairs neighbor, the pop star Madonna. According to George, Madonna had people over to her apartment for an hour and a half to three hours every day to conduct dance training and exercise routines. During this time, Madonna played loud music. According to George, the music was “deafening” and caused her walls and floors to shake. She says
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