Barry Gilbert, CPA, EA
Enrolled to Practice Before the Internal Revenue Service
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E-NEWSLETTER
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Your Individual Income TaxesYou may think you have no control over your taxes, but there are a number of strategies that can be employed to reduce or delay your tax bite. To take advantage of these possibilities requires knowledge of what strategies are available.Read the article »
Understanding Your Tax BasicsNo matter what the season or your unique circumstances, when it comes to your taxes, planning usually pays off in a lower tax bill. The following is provided so that you may have a basic understanding of taxes before you discuss filing options and strategies.Read the article »
Cut Taxes On Your InvestmentsLong-term capital gains tax rates will produce automatic tax savings by taxing the gain from capital assets at rates lower than the regular tax rate. To take advantage of the long-term rates, you need to hold the asset longer than one year. The long-term rate depends on two things: your marginal tax rate and how long you have held the asset.Read the article »
Avail Yourself of Your Employer's Tax-Advantaged Plans• Dependent Care Benefits - If a taxpayer works and incurs child care expenses, he or she should check to see if their employer has a dependent care program. If the employer does provide dependent care benefits under a qualified plan, the taxpayer may be able to exclude up to $5,000 ($2,500 if Married Filing Separately) of child care expenses from his or her wages, which generally provides a greater tax benefit than the child care credit.Read the article »
Plan For Selling Your HomeEach individual taxpayer, regardless of age, is allowed to exclude up to $250,000 of gain from the sale of their main home if certain requirements are met. A married couple that meets the requirements can exclude up to $500,000. To qualify for the exclusion, a taxpayer must own and live in the home as their main home for two of the prior five years immediately before the sale (under certain circumstances the five-year period is extended for military personnel and intelligence community employees). Short temporary absences, such as for vacation or other seasonal absence (even though accompanied with rental of the residence), are counted as periods of use.Read the article »
Save Taxes by Shifting or Deferring Income• Shifting Income to Your Child - Children under the age of 19 and full-time students under the age of 24 are subject to the so-called kiddie tax. This was enacted by Congress to restrict taxpayers from shifting large amounts of income to their children by taxing the child at the parent’s marginal tax rate. However, for children without earnings from working, there is no kiddie tax on the first $950 for 2011 of investment income, and the next $950 is taxed at 10%. Once the child is beyond the applicable age, all of their income is taxed at their own marginal rate. When the child’s income reaches the point where it would be taxed at the parent’s rate, additional investments can be made through tax-deferred investment vehicles.Read the article »
Planning Pension DistributionsAn individual may begin withdrawing, without penalty, from his or her qualified pension plans at the age of 59-1/2. There are several exceptions that will allow earlier withdrawal without penalty. Upon reaching age 70-1/2, you are required to take distributions from your plans or face a substantial penalty for failing to do so.Read the article »
Explore Education Tax IncentivesCongress, in recent years, has provided a variety of tax incentives to help defray the cost of education. Some require long-term planning to become beneficial, while others provide current tax deductions or credits.Read the article »
Make the Most of Your DeductionsAs you plan for your tax year, keep in mind that some tax deductions are “above-the-line” and are available whether deductions are itemized or not. In addition to the educational “above-the-line” deductions mentioned earlier, the following deductions are noteworthy.Read the article »
Tax Planning For Your Business• Business Entity Choices - Non-tax considerations generally take precedence in selecting the appropriate structure for your business. However, tax considerations can also play an important role in your decision. Choosing the right business entity at the inception of your business is important, and all aspects should be carefully considered.Read the article »
Real Estate Rental LimitationsReal estate rental income is business income but is not subject to Social Security taxes. Real estate rentals are also considered passive activities. Generally, passive activity losses are only deductible to the extent of passive activity income. An exception allows most individuals to annually deduct up to $25,000 ($12,500 for married filing separate taxpayers who live apart the entire tax year) of real estate rental losses. This dollar limit phases out ratably at AGI between $100,000 and $150,000 ($50,000 and $75,000 for married filing separate taxpayers who live apart the entire tax year). Any unallowed passive loss will carry over to future years. If you qualify as a real estate professional, the passive loss limitations will not apply to your real estate rental activities.Contact UsWith changes just about every year, our tax laws have become very complex. The information and strategies included in this book are overviews intended to increase your awareness of issues that might apply to you and your annual tax planning. Before implementing any of the ideas or strategies discussed, you are encouraged to call this office. We will be happy to assist you.DISCLAIMER The purpose of this guide is to provide current information on tax, financial, and business developments and to suggest general tax planning ideas that may be appropriate in certain situations. The information and opinions are generalizations and may not apply to all taxpayers. It is important that you seek appropriate professional advice before implementing any of the tax strategies suggested.
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