The new bankruptcy law that took effect Oct. 17, protects funds held in a qualified retirement plan from outside creditors. There's no limit on the amount you can shield from creditors.
Small Business Tax
Section 179 vehicles should be a key part of your small business tax deduction strategies. Can Section 179 property fit in with your business tax strategies?
Let Business Management Daily help you get each and every rental property depreciation credit and business tax deduction you’re entitled to.
Although Roth IRAs have been around for a few years, some taxpayers are still spooked by this newfangled version of the traditional IRA. As you'll see, 2005 may be an especially good year to look at different ways you can put money into a Roth IRA before year-end.
Should you contribute to a Roth IRA or a traditional IRA? You may be surprised to learn that the Roth IRA beats the traditional IRA almost all the time. Let's look at seven common scenarios. In all these examples, we've assumed you would leave an initial contribution in the Roth or regular IRA for a number of years and then pull out the money as a lump sum in retirement after age 591/2. For simplicity's sake, we'll assume a 10 percent before-tax rate of return for each example.
With gas prices soaring, the IRS threw business travelers a bone recently by allowing them to deduct 48.5 cents per driving mile for the final four months of 2005. But, at the time, the IRS didn't touch the standard deduction rate for charity-related driving, which remained at a paltry 14 cents per mile.
Q: We're thinking about buying a vacation-home condo on one of the Caribbean islands. If we take out a mortgage, can we deduct the interest on our U.S. tax return? S.J., Darien, Conn.
Common situation: You've remarried and both you and your spouse have children from previous marriages. If you leave most of your fortune to your surviving spouse, it appears at first glance that you'll face no major estate-tax concerns. But there's no guarantee the money will ever wind up in your kids' hands. The current estate-tax exemption can cover direct transfers to your children of up to $1.5 million, but that's all.
If you hit the jackpot at a casino, racetrack or other gambling venue, you can reduce the tax on your winnings by offsetting those winnings with your gambling losses. But you must keep good records and those losses must be claimed as a miscellaneous itemized deduction on your tax return.
Do you help parents, in-laws or other elderly relatives with their living expenses? Maybe you occasionally pitch in with your relative's expenses, but you aren't able to claim a dependency exemption. Reason: You don't provide at least half of that person's annual support.
If you plan on taking a business trip in the coming months and bringing your spouse along for the trip, there is a way to write off travel costs attributable to both of you, regardless of whether your spouse works for your company.
Q: My daughter graduated from college, and she gave $500 to the Red Cross after the hurricane. She probably won't itemize deductions this year. Is there any way she can deduct this donation? B.K., Red Bank, N.J.