Published: December 20, 2017

Many years ago, Duke Ellington wrote the music to "Do Nothing 'Til You Hear From Me", and this remains good advice when deciding what to do about the new tax law. There are many changes in tax provisions that will take effect soon, and they promise significant benefits to business owners and investors. But getting the greatest advantage from these changes will take careful planning. And will require advice from your tax experts, whether they are lawyers or accountants.

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Published: December 24, 2015

For some people, it’s abundantly clear that setting up a Roth IRA, where you get no tax deduction for the contribution but have no taxable income when amounts are distributed, makes perfect sense. People just starting out on their working careers, who might be in a very low tax bracket, are probably better off using the Roth IRA because the tax savings from a traditional IRA deduction don’t help very much.

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Published: October 7, 2014

Several sessions of the US Congress have eventually passed provisions permitting contribution of IRA amounts to charities. It’s always been a limited right, applicable only to those who have reached age 70 1/2, limited in amount to $100,000, and somewhat limited as to what charities could receive it. It’s really more symbolic than anything else, because anyone can withdraw from an IRA, distribute the funds to a charity and get an income tax deduction. The benefit of a charitable IRA rollover was that the amount withdrawn was not included in income.

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Published: April 7, 2014

In Announcement 2014-15, the Internal Revenue Service restated its position on the number of IRA rollovers permitted in a single year. The U.S. Tax Court, in Bobrow v. Comissioner, T.C. Memo 2014-21, reviewed the statutory rule that only one IRA rollover is permitted in a single twelve month period, deciding that all IRAs of an individual are aggregated in determining if that rule has been broken. This was a surprise to many, because the IRS publication on IRAs, Publication 590, states that the rule is applied on an IRA by IRA basis.

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Published: January 4, 2014

We shouldn’t overlook some basic tax and estate planning ideas, even if they don’t produce blockbuster results. IRAs are a good retirement and tax planning vehicle. Here are some reasons why. If you are participating in a qualified retirement plan (or your spouse with whom you file a joint return is), your ability to take an income tax deduction for contributions to an IRA might phase out. But you can still contribute to an IRA, even if you don’t get an income tax deduction (we’re talking about traditional IRAs, not Roth IRAs).

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Published: September 2, 2013

The U.S. Treasury Department and the Internal Revenue Service announced, on August 29, 2013, that same sex couples who are legally married in jurisdictions that recognize their marriages will be treated as married for federal tax purposes. Note that this announcement does not apply to civil unions that are permitted in some states, and note as well that it applies to couples legally married who now reside in a jurisdiction that does not permit same sex marriage.

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Published: March 14, 2013

Taxpayers are gearing up to pay the new 3.8% tax on net investment income that is to offset part of the cost of the new healthcare law, the Affordable Care Act. The new tax does not apply to retirement plan distributions, but such distributions could increase the tax payable. Here’s how.

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Published: January 22, 2012

An article in the New York Times of January 22,2012 offers some ideas on how to make the tax system simpler and maybe fairer:

 1. Broaden the base and lower rates. What this means is eliminating some deductions, like mortgage interest, and reducing tax rates on the larger base. No one in Congress has seriously tried to eliminate that particular deduction, nor most others.

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Published: April 17, 2011

An article in the New York Times of April 17, 2011 notes that the three largest tax breaks are: the employer-provided health insurance exclusion ($264 billion of lost revenue last year), the home mortgage interest deduction and the 401(k) contribution exclusion ($52.2 billion). Lower tax rates on capital gains ($36.3 billion), lower rates on dividends ($31.1 billion) and the IRA exclusion ($12.6 billion) are also significant. Although the first two have long been viewed as untouchable, the sheer cost of them might tempt both parties to consider cutting them back, at least.

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Published: December 30, 2010

A provision of the Tax Relief Act of 2010 (which has a longer name but, alas, no acronym) extends through the end of 2011 the ability to make a direct trustee to trustee transfer from an IRA to a qualified charity without tax consequences (that is, no recognition of income and no tax deduction). The donor must be at least age 70 1/2 and the limit on the amount that may be transferred is $100,000 per year. The transfer must be from a traditional or Roth IRA; it can’t be from a SEP-IRA or a SIMPLE plan.

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