Q: My husband passed away last year. Now, I'm preparing to sell the house we've owned for 25 years. Can I still shelter $500,000 of the home-sale gain from taxes? I know that $500,000 is the joint-filers amount, but I think I read that I would still qualify? No name, Springfield, Ohio
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.
Q: I've heard that food expenses will be deductible beginning next year. Will itemizing be required? O.D., New York
Q: I own real estate that I plan to sell to my son through an installment sale. My CPA says this can't be done because we're related parties. Is this true? D.R.T., St. Petersburg, Fla.
If you're the big cheese at your company, you can control your own tax destiny to a certain extent. For example, you can usually time year-end bonuses to your personal tax advantage.
U.S. tax laws provide a variety of tax breaks for higher education expenses, but high-income people are usually shut out of these goodies. Example: Joint filers can't claim the above-the-line deduction for tuition expenses if their adjusted gross income exceeds $160,000 ($80,000 if you are unmarried).
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.
Social Security taxes take a big bite out of your paycheck. That's why it's a huge relief to highly paid employees when autumn finally rolls around. Reason: Once they clear the Social Security wage base for the year, they won't need to pay any more Social Security tax for the year.
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.
Question: My wife and I operate separate self-employed businesses. This year, I expect to show a big profit, so I plan on buying new machinery and tools before Jan. 1 that I can expense. My wife's business is likely to show a loss. Will her loss reduce the amount I can claim under Section 179? If so, what can I do about it? — C.S., Rochester, N.Y.
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.