A 529 plan, otherwise known as a qualified tuition plan, is a tax-sheltered way of saving for education. 529 plans are sponsored by states, state agencies, or educational institutions. For a helpful guide to the various 529 plans, click here.A contribution to a 529 plan is not federally income tax-deductible, though it may qualify for a state income tax deduction in some states. Assets in the plan may be invested in various ways, depending upon the particular plan. Income earned in the 529 … [Read more...]
SALT Deduction Limit…Can You Get Around It?
The Tax Cuts and Jobs Act increased the standard deduction to $12,000 per person and $24,000 per couple (for 2018 and inflation-adjusted thereafter). This was great news for those who don’t itemize their deductions. However, for those itemizing deductions, there was some bad news in the new law, too. The law included a cap of $10,000 (not inflation adjusted) for state and local taxes (“SALT”), such as state and local income and real property taxes. The $10,000 limitation is the same for single … [Read more...]
New Tax Proposals
Representative Alexandria Ocasio-Cortez (D-NY), one of the new class of legislators in the House of Representatives has suggested the rate of income taxation for high-earners be raised. She is suggesting a top rate for those making over $10 million per year be increased to 60% or 70%. She’s suggesting the proceeds could be used for a “Green New Deal” or other programs. Here’s a link to more information. To be clear, she’s not suggesting that those making $10 million in income should have all … [Read more...]
The Little Things May be the Most Important
Often, the smallest things have the most sentimental value. Your grandmother’s silverware or your grandfather’s railroad watch could connect you to them in a special way. Your mother’s ring or your father’s Boyscout bugle could hold a special place in your heart. Your sports memorabilia could connect you to one of your children in a unique way. You may want those items to go to particular beneficiaries who will cherish their sentimental value as you have. There’s an easy and flexible way to do … [Read more...]
Tax Tips after New Year
The ball has dropped in Times Square and we’ve bid farewell to 2018. But there are still a few things we can do to adjust our tax liability for 2018 before filing tax returns on April 15.First, you’ll need to organize all your tax records. That way, you’ll have some idea of what your tax liability might be. After you’ve organized your tax records, if you find you will owe money, there are a couple things you can do.You can contribute to your IRA for 2018. That’s right, even though it’s … [Read more...]
Being Thankful and Sharing Your Blessings
As we gathered around the Thanksgiving table last week, we saw the faces of our loved ones and probably contemplated how grateful we are for them and for all our blessings.“We must find the time to stop and thank the people who make a difference in our lives.” – John F. Kennedy, 35th President of the United States.“If you are really thankful, what do you do? You share.” — W. Clement Stone, businessman, philanthropist, and author.There are different ways we can share. We can share … [Read more...]
Special Accounts for People with Special Needs
Those with special needs have unique challenges in life. But, there are special accounts available to individuals who were disabled before age 26. The Achieving a Better Life Experience or “ABLE” Act created ABLE accounts under section 529A.As discussed in the last blog, 529 accounts give preferential tax treatment when the accounts are used for educational expenses. ABLE accounts are similar in structure to the 529 educational accounts. The income earned on the assets in ABLE accounts is … [Read more...]
Estate Planning is for You, Not Just Your Parents or Grandparents
Often, people think estate planning is just for those who are elderly. While the elderly certainly need estate planning, estate planning is for anyone who cares what happens to them, their stuff, or their family.For someone who is young and healthy, estate planning may be the furthest thing from your mind. You may be thinking about how to enjoy autumn by playing in the leaves or about an upcoming ski vacation. How could you need estate planning when you have such an active lifestyle? … [Read more...]
What’s a 529 Plan and What Are the Benefits to Using One?
A 529 plan is an account in which you can save for educational expenses. There are two types of plans. The first is a pre-paid tuition plan which is typically sponsored by a university. The second type of plan is an investment savings plan, typically sponsored by a state or state agency. The second type of plan is the more common one.Income Tax Benefits: 529 accounts are specialized accounts with a great tax benefit. Income earned in the account is not taxed currently. If the money is used … [Read more...]
Planning to Avoid Too Much SALT
Doctors have long said that too much salt isn’t good for you. Now it appears that too much “SALT” isn’t deductible either. December 2017 brought a new federal tax law, The Tax and Jobs Act, which limited the deductibility of state and local taxes (“SALT”) to $10,000 per year. This $10,000 limitation applies for individual taxpayers and even married taxpayers filing a joint return.Some state legislatures have considered or are considering adopting proposals which allow taxpayers to contribute … [Read more...]
