Individual Tax Briefs Archives - Page 30 of 32

25 Aug 2019

Good Time to Review Your Investments

You may have heard about a proposal in Washington to cut the taxes paid on investments by indexing capital gains to inflation. Under the proposal, the purchase price of assets would be adjusted so that no tax is paid on the appreciation due to inflation. While the fate of such a proposal is unknown, the long-term capital gains tax rate is still historically low on appreciated securities that have been held for more than 12 months. And since we’re already in the second half of the year, it’s a good time to review your investments for possible tax-saving strategies. The federal income tax rate on long-term capital gains recognized in 2019 is 15% for most taxpayers. However, the maximum rate of 20% plus the 3.8% net investment...

19 Aug 2019

Does Charitable Volunteering Yield Tax Breaks?

Roger Rossmeisl, CPA

Individual Tax Briefs

If you’re a volunteer who works for charity, you may be wondering . . . does charitable volunteering yield tax breaks? Yes, you may be entitled to some tax breaks if you itemize deductions on your tax return. Unfortunately, they may not amount to as much as you think your generosity is worth. Donations to charity of cash or property generally are tax deductible for itemizers. As such, it may seem like donations of something more valuable for many people — their time — would also be deductible. As it turns out, that's not the case. It doesn’t matter if the services you provide require significant skills and experience, such as construction, which a charity would have to pay dearly for if it went out and obtained...

19 Aug 2019

Taxability of Non-Resident Pensions

Roger Rossmeisl, CPA

Individual Tax Briefs

In the attached audio clip (click on photo above to listen), Spidell Publishing's "California Minute" discusses a questions that comes up a lot. What is that taxability of non-resident pensions? These are situations in which you earn a pension in one state, and then retire in another. Under both federal law and California R&TC §17952.5, qualified pension payments paid to former California residents are not taxable by California. (This is Blog Post #595) Spidell Publishing, Inc. has been a critical source of California tax information for tax professionals since 1975, promoting ideas, references, solutions, and guidance, plus news and commentary covering all aspects of tax and its administration....

16 Aug 2019

Summer Camp May Yield a Tax Break

Roger Rossmeisl, CPA

Individual Tax Briefs

When schools were out for the summer, you might have sent your children to day camp. It’s often a significant expense. The good news: Summer camp may yield a tax break for the cost. The value of a credit Day camp is a qualified expense under the child and dependent care credit, which is worth 20% to 35% of qualifying expenses, subject to a cap. Note: Sleep-away camp does not qualify. For 2019, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more. Other expenses eligible for the credit include payments to a daycare center, nanny, or nursery school. Keep in mind that tax credits are especially valuable because they reduce your tax liability dollar-for-dollar — $1 of tax credit...

25 Jul 2019

Is a Health Savings Account Right for You?

Roger Rossmeisl, CPA

Individual Tax Briefs

Is a Helath Savings Account Right for You?

To help defray health care costs, many people now contribute to, or are thinking about setting up, Health Savings Accounts (HSAs). With these accounts, individuals can pay for certain medical expenses on a tax advantaged basis. But, is a Health Savings Account right for you? Is a Health Savings Account right for you: The basics With HSAs, you take more responsibility for your health care costs. If you’re covered by a qualified high-deductible health plan, you can contribute pretax income to an employer-sponsored HSA — or make deductible contributions to an HSA you set up yourself. You own the account, which can bear interest or be invested. It can grow tax-deferred, similar to an IRA. Withdrawals for qualified medical expenses are tax-free, and you can carry over a...

25 Jul 2019

Donating Your Vehicle to Charity May Not Yield A Big Tax Deduction

Roger Rossmeisl, CPA

Individual Tax Briefs

You’ve probably seen or heard ads urging you to donate your car to charity. “Make a difference and receive tax savings,” one organization states. But donating a vehicle may not result in a big tax deduction — or any deduction at all. Donating your vehicle, trading it in, or selling it? Let’s say you’re buying a new car and want to get rid of your old one. Among your options are trading in the vehicle to the dealer, selling it yourself or donating it to charity. If you donate, the tax deduction depends on whether you itemize and what the charity does with the vehicle. For cars worth more than $500, the deduction is the amount for which the charity actually sells the car, if it sells without...

23 Jul 2019

Consider Taxes When Retiring in Another State

Roger Rossmeisl, CPA

Individual Tax Briefs

When you retire, you may consider moving to another state — say, for the weather or to be closer to your loved ones. That said, don’t forget to consider taxes when retiring in another state as part of the equation. Establishing residency for state tax purposes may be more complicated than it initially appears to be. Consider taxes when retiring in another state: Step 1, identify all applicable taxes It may seem like a no-brainer to simply move to a state with no personal income tax. But, to make a good decision, you must consider all taxes that can potentially apply to a state resident. In addition to income taxes, these may include property taxes, sales taxes and estate taxes. If the states you’re considering have an income...

28 Jun 2019

Chances of IRS Audit are Down

Roger Rossmeisl, CPA

Individual Tax Briefs

The IRS just released its audit statistics for the 2018 fiscal year, and the chances of IRS audit are down. Fewer taxpayers had their returns examined as compared with prior years. Even though less returns are being audited, that will be little consolation if yours is one of them. Chances of IRS audit are down: latest statistics Overall, just 0.59% of individual tax returns were audited in 2018, as compared with 0.62% in 2017. This was the lowest percentage of audits conducted since 2002. However, as in the past, those with very high incomes face greater odds. For example, in 2018, 2.21% of taxpayers with AGIs of between $1 million and $5 million were audited. That's down from 3.52% in 2017. The richest taxpayers, those with AGIs of $10...

22 Jun 2019

Tax Implications of Selling Your Home

Roger Rossmeisl, CPA

Individual Tax Briefs

Spring and summer are the optimum seasons for selling a home. And interest rates are currently attractive, so buyers may be out in full force in your area. Freddie Mac reports that the average 30-year fixed mortgage rate was 4.14% during the week of May 2, 2019, while the 15-year mortgage rate was 3.6%. This is down 0.41 and 0.43%, respectively, from a year earlier. But before you contact a realtor, you should review the tax implications of selling your home. Sellers can exclude some gain If you’re selling your principal residence, and you meet certain requirements, you can exclude up to $250,000 ($500,000 for joint filers) of gain. Gain that qualifies for the exclusion is also excluded from the 3.8% net investment income tax. To qualify for...

Good Time to Review Your Investments

Does Charitable Volunteering Yield Tax Breaks?

Taxability of Non-Resident Pensions

Summer Camp May Yield a Tax Break

Is a Health Savings Account Right for You?

Donating Your Vehicle to Charity May Not Yield A Big Tax Deduction

Consider Taxes When Retiring in Another State

Chances of IRS Audit are Down

Tax Implications of Selling Your Home

ROGER ROSSMEISL, CPA

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