You might be surprised to learn that the new tax law actually rewards business owners for purchasing large, gas-guzzling vehicles for business use. Surprised? Me, too. But, according to a recent article in the Wall Street Journal, that is the case. If you are a small business owner who uses a vehicle in your business – especially a large one – you should take note of this new tax break. The new rules apply to vehicles purchased after Sept. 8, 2010 and before January 1, 2012. So, if you’re in the market to purchase a vehicle for your business, you’ll…
If you’ve been a diligent saver and keeping an eye on your 401(k) for all these years, it’s important to remember that the tax-man also has been looking on with interest and waiting for his cut. It’s simply too easy to forget, but a traditional IRA is tax-deferred until withdrawal, so that balance is deceiving. What is more, it means that the tax you will owe has yet to be decided. A recent MarketWatch article points out the strong possibility of higher tax rates for 401(k) savers once they reach retirement. The value of delaying a tax hit into retirement,…
“The first thing that you have to realize, according to [Michael] Kitces, is that you never get a net negative for working and collecting Social Security. ‘If you work and you bring additional earned income into the household, there is more money there,’ he said. ‘You don’t get to keep all of it, Uncle Sam will take a piece, and you may impact a couple other parts of the retirement pie as well, but it’s never a net negative’” from MarketWatch (March 21, 2011) This article offers a densely packed discussion on the tax implications that arise from working into…
Tax avoidance is a legitimate undertaking, no one is obliged to pay more in taxes than they legally owe. But as Al Capone discovered, the difference between tax avoidance and tax evasion is the thickness of a prison wall. Hiding assets in off-shore bank accounts in order to evade taxation is an increasingly risky business. The U.S. government is stepping up efforts to crack down on offshore accounts and tax evasion. In fact, the IRS is urging taxpayers to disclose their accounts now, before new reporting requirements for overseas banks and changes to tax treaties give the government more information…
Taxes can be a pain for all of us. But if you are a small business owner, managing your business taxes eats up valuable time and energy that you know you could put to better use elsewhere. Of course, if you think managing your tax filings is time-consuming, you sure won’t want to try your hand at an audit! In a timely article, Barbara Weltman of the Wall Street Journal last week compiled a list of 10 things to keep in mind when filing your business taxes to help avoid any undue IRS attention.Most of her advice is common-sense and…
President Obama on Tuesday strongly defended his tax cut deal with Congressional Republicans against intense criticism from his own party, insisting it was “a good deal for the American people” states the New York Times “I’ve said before that I felt that the middle-class tax cuts were being held hostage to the high-end tax cuts,” Mr. Obama said. “I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed. Then people will question the wisdom of that strategy. In this case, the hostage was the American people, and I was not willing to see them get harmed.”…
Christmas music has already begun in some stores, which also means that it’s time to begin end-of-year planning. For many, this means looking at your 401(k), and so I thought I’d share some news and tips from a recent article. Brightscope Inc., a retirement plan rating company, recently compiled a list of the 10 most commonly held mutual funds in 401(k)s. Generally, it hasn’t been a bad year for 401(k)s and investors. Nevertheless, many of the top ten underperformed the Standard and Poor’s 500 stock index. This may simply be a sign that size is not always conducive to…
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