'Tax Know-How' Articles

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Tax Know-How Articles deal with any and all taxes that affect your. These are income tax, gift tax, estate tax, and tax on investments. Even how Social Security is taxed too - and affected by working. Here is where you'll get how the tax works in each of these situations.  Some tax-related articles my occur in Social Security and other categories, so keep reviewing them all for the information you need.

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Understanding Gift Taxes Basics is Essential in Estate Planning for 2014
You transfer your wealth either by making a direct gift to someone or organization, or leaving it in your estate at death. The federal government taxes both ways of wealth transfer by gift taxes and estate taxes, respectively. So what are the basics of gift taxes?..read more

Two Tax Breaks for Paying for Long Term Care of Spouse at Home
It’s not uncommon to pay someone $15,000 per year to take care of your dependent spouse or parent. Federal taxes rules allow you to take either a tax credit or an itemized deduction for a portion of those expenses. Here’s the deal…read more

When Are Life Insurance Proceeds Taxed to Beneficiaries?
Life insurance proceeds - aka death benefit - at the death of the insured are generally tax free. But there are circumstances that will trigger some tax on what a beneficiary receives. Here are some…read more

Make Your 2014 Income And Investment Tax Rates Work For You
Our income is taxed in a progressive manner. As your income increases, it slips into higher tax brackets where that portion is taxed at a higher rate. But before your income is subject to these tax brackets, it must exceed your exemption and standard deduction which totals your tax threshold for your filing status – single or married; otherwise, you pay no tax...read more


Take a Tax-based Profit on Your Retirement Contribution if Your Income Drops Significantly
Government-regulated retirement plans offer you a tax-advantage – a way to put more into your retirement savings when you contribute. That’s because those contributions are tax-deductible; and then, for added benefit, their earnings grow tax-deferred. Your eventual withdrawals are taxed as ordinary income at hopefully a lower tax bracket...read more


Some State Taxation Schemes are Better for Retirees
Reducing your tax burden is one way to reduce your living expense to make your retirement income go farther. If you’re considering moving, be aware of those states that give a break to retirees on their state income tax – and those that don’t...read more

Your MAGI Determines How Much Your Social Security Is Taxed
Worried about your Social Security being taxed? Here’s how to figure when and how much...read more

2013 and 2014 Deductions and Exclusions for Your Long Term Care Insurance
As an incentive to take responsibility for your own long term care, the government (HIPPA) lets you deduct the insurance premiums you pay for qualified long term care  (LTC) expenses while excluding their insurance reimbursements for expenses you incur from your taxable income. These deductions are limited but increase according to your age. They’re also indexed for inflation. Here are the premium deduction limits for 2013 and 2014…read more

Minimize Exposure To The 2013 Income and Investment Tax Rates
Our income is taxed in a progressive manner. As your income increases, it slips into higher tax brackets where it’s taxed at a higher rate. But before your income is subject to these tax brackets, it must exceed your exemption and standard deduction. Otherwise you pay no tax....read more


2013 Estate Tax Provisions Retain A ‘Stepped-Up’ Basis at Death
Federal estate tax law now allows for the ‘stepped-up’ basis of a decedent’s property at the time of his death for the decedent’s beneficiary of that property. Previously, it looked like this provision was to be dropped, but our new Estate Tax Laws has affirmed its continuance...read more

2013 Estate Tax Planning Includes Trusts and Federal and State Estate Taxes
It’s important to review your estate tax planning to incorporate the changing federal and state estate tax laws – their amounts and exemption thresholds. Trust still have an place for exemption preservation and offspring protections. Here’s and update…read more

Get Non-Itemized Medical Deductions with a HSA before Medicare Eligibility 2013
If you’re not yet eligible for Medicare (age 65) you can get a tax break paying for you medical costs. But you need to use Health Savings Account (HSA) in conjunction with a high deductible health insurance plan to do so. Let’s see how it works…read more

Qualify for Medical Deduction for Using an Assisted Living Facility in 2013
Many retirees will end up in a nursing home when they need constant assistance. But before that, they may choose to live in an assisted living facility (ALF) for convenience, security and comfort. To deduct costs for an assisted living facility, you must make sure the care you get there qualifies for it. Let’s see what care qualifies...read more

Making It a Gift or an Inheritance Can Be a Taxing Issue!

Gifting versus bequeathing property is an important estate planning issue. But the taxation associated with that property may help you decide which is better for you and your beneficiary -  to make it a gift or bequeath it at your death...read more

Retirees Should Try To Deduct All Itemized Medical Expenses
You can lower your income tax if you can itemize your deductions so they add up to more than the standard deduction given to everyone. The two major itemized deductions are typically mortgage interest paid and state income taxes withheld...read more

Tax Rate and Social Security Thresholds for Seniors for 2012
All retirees should be aware of the tax rates  and breaks for seniors as well as  the retirement benefits for those 65 and older. Here are summary of their values  for 2012...read more

Where Annuities Are Vulnerable to Income Taxation
Annuities and cash value life insurance have a tax advantage in common; their earnings grow tax-deferred. But that’s where similarities end. Because an annuity is geared to be used while the owner is living, any of its earnings that come out of the contract will be subject to income tax.  Here’s when that occurs…read more


How Will My Annuity Be Taxed When I Die?
Part of estate planning includes knowing what tax burden each of your assets will create for your estate or beneficiaries. Your annuity is no exception. Let’s see what the tax consequence for it is after you die...read more



Help Maintain Your Wealth: What to Withdraw From and When
Retirees are interested in preserving their wealth as long as possible. But because different assets are taxed differently – and yearly where required – the order in which you withdraw income from your assets can significantly affect how fast you’ll deplete your wealth.  So when should you withdraw from which type of assets?..read more


Foreign Earned Income Tax Exclusion for Living and Earning Income Abroad 

One boon for living and working abroad is a sizeable exclusion from U.S. taxable income. But only ‘earned’ income counts and if it’s very high, you’ll face higher taxation on excess income. Here’s how it works...read more

2011 and 2012 Deductions and Exclusions for Your Long Term Care Insurance

HIPPA provides for deductibility of qualified long term care (LTC) expenses and excludes from taxable income your qualified long term care benefits. This is provided to you as an incentive to take financial responsibility for your long term care. As you age, you get higher deduction limits for LTC premiums payments you make. This helps retirees. Let's see what the tax advantages are...read more

A 1035 Exchange Offers a ‘tax free’ Way to Change Life Insurance Policies or Switch to an Annuity When preparing for retirement, you need to re-evaluate your insurance needs. Perhaps, you may have a cash value life insurance policy that doesn’t offer what you need now. You may decide to cash it in or sell it so you can buy another insurance product. But you’d have to pay taxes on any gain you make on your policy. But with a 1035 exchange, you can bypass any immediate taxes while converting your policy to something better suited to you...read more

Withdraw from Taxable Accounts First and Let Tax-Deferred Accounts Compound to Best Maintain Savings
Retirees who need to dip into savings to pay their yearly expenses should first take from their taxable accounts (i.e. not IRAs, etc). Let the tax-deferral help your tax-deferred accounts grow faster for greater future savings. This article explains why...read more

Estate tax for 2010 and the Modified Carryover Basis Option
The estate tax for those dying in 2010 gives you a one-time only choice of two ways to be taxed. You can either opt for a $5 million exemption and pay 35% estate tax on any excess value of your estate or you can opt for an unlimited estate tax exemption which essentially eliminates any estate tax. But the latter option comes with a carryover basis for inheritors – and that can make a big difference...read more

Your Probated Estate versus Federal Estate – What’s the Difference?
One of the concerns that estate planning addresses is the problem of probate. This is your state’s legal process of settling a decedent's affairs supervised by your local probate court in your county. It’s a public, time-consuming, and often costly process...read more

The Generation Skipping Tax - A Loophole Cover of Estate and Gift Taxes
The generation-skipping (transfer) tax (GST) taxes anything you directly leave or gift to a person two or more generations below you – typically your grandchildren. Why it’s there and its 2011, 2012 taxation rates are what this article addresses...read more

What Makes Up Your Taxable Estate?
If you have many millions in your estate, estate taxes can rob a chunk of it from your beneficiaries. But this tax is imposed on your net estate value. That’s the value of your estate after you’ve taken allowable deductions from your gross estate. What makes up your gross estate is the value of all property in which you have any interest at your death plus some gift items you made within 3 years of death. This article overviews the deductions you can take...read more

Take Charge of Your Tax Matters Using the IRS Website
In this age of exploding internet information, the Internal Revenue Service wants you to know how you can take charge of your income tax using its website at www.irs.gov. Here are 9 ways you can use it if you have a computer with internet access...read more

Most Tax Rates and Breaks Remain the Same for 2011 and 2012
The 2010 Tax Relief Act has set the tax rates and breaks for 2011 and 2012. Personal income tax rates and investment rates will remain unchanged. Seniors will see a charitable tax break for their IRA holdings. Here’s the detail…read more

Estate Tax for 2010, 2011 and 2012 Is Finally Settled
Finalization of our estate, gift and generation skipping tax took place on Dec. 17, 2010 when the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was enacted. Its provisions settle our death-related taxes from 2010 to the end of 2012 – but not beyond that.  Here are the provisions…read more

Estate Tax – A Moving Target
Right now – during 2010 – you can die and there’ll be no estate tax on your property. This result was built into the law back in 2001. At that time it was the consensus that the estate tax should be phased out and 2010 was the year it would be gone... read more

2010 Estate Tax Alert – Retroactively Imposed is Unconstitutional 
For 10 years the estate tax was set in law to be abolished in 2010. If congress didn’t act to keep it abolished or modify it for 2011 and beyond, then the 2011 estate tax would just revert to that of 2000. Now congress is considering retroactively imposing an estate tax for 2010 later in 2010...read more

Even Less Reason in 2010 to Withdraw From Your Tax-Deferred Accounts
During your retirement, you’re often advised to live off your taxable accounts first before using your tax-deferred accounts. That’s because withdrawing from your tax-deferred accounts will tax you more whereas keeping them untouched allows them to grow faster than your taxable accounts...read more

No Stepped-Up Basis for Estate Inheritors of Those Dying in 2010
Up until 2010, property owned by a decedent at the time of death of his death had its tax basis changed from what the decedent’s basis was to its fair market value – whichever was higher. For the year 2010 – and only that year – the law has been changed to ‘whatever is lower’...read more

Estate Taxes Can Bite You Bad after the Year of Kevorkian
The estate tax is the government’s last bite out of you when you die. It’s a tax on the value of your estate at your death. And it can be a big bite. You better read on....read more

Gift Taxes – What, When, How Much, and Exclusions
When you transfer your wealth by gifting or dying, the federal government wants part of ‘the action’. Active giving can trigger a federal gift tax whereas dying triggers the federal estate tax too. Both are paid when you die out of your estate....read more

Your Home Carries a Huge Capital Gains Exclusion Benefit
Home ownership carries a couple of major tax-benefits. One is the deductibility of your interest portion of your mortgage payments. The other is that much of your gains can be excluded when you sell your home.  Let’s take a look at the latter to show you the conditions under which you can reap ‘tax-free’ so much of the equity increase of you home...read more

How Much Income Tax Are the Feds Really Taking from You?
If you’re trying to save money, you ought to know how much the federal government is taking from what you earn. Most people just don’t know. Finding out will show you why it’s hard to get ahead...read more 

How Taxation Rules Your Investment Options
You grow your savings so to use them later. Outside of contributing they grow according to how you invest them. Government’s taxation plays an important part in how you choose what to invest in and how to hold that investment...read more




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