I understand that the new health care law may increase my tax by 3.8% beginning in 2013. What is this tax and what can I do to avoid it?
What you are referring to is the new 3.8 percent Medicare surtax that Continue reading…
I own a small business which I report as a sole proprietorship on Schedule C with my personal federal 1040 tax return. As I get ready for filing my 2011 return, what are some changes I may need to know?
First, it should be noted that the due date is Apr. 17, 2012 because Continue reading…
How is the interest which I earn on my U.S. savings bonds taxed?
Interest deferral on Series EE bonds. Series EE Bonds dated May 2005 and after earn a fixed rate of interest. Bonds purchased between May 1997 and April 30, 2005, earn a variable market-based rate of return. Continue reading…
We want to start saving for our child’s college and have heard of a tuition plan with tax benefits. Can you help explain how it works?
You are probably referring to qualified tuition programs, also known as 529 plans (for the Internal Revenue Code section that provides for them), which allow prepayment of higher education costs on a tax-favored basis. There are two types of programs Continue reading…
I am 72 years old. I heard about the opportunity to make tax-free charitable contributions from my IRA. Can you explain?
This year may well be the last chance for taxpayers age 70- 1/2 or older to take advantage of an up-to-$100,000 annual exclusion from gross income for otherwise taxable individual retirement account (IRA) distributions that are qualified charitable distributions. Such distributions aren’t Continue reading…
I’m looking into buying a new car and was wondering if it would be worth it to donate my old one to charity?
Rather than go through the hassle of selling an old car, you may get a tax deduction for donating the vehicle to a charity. An increasing number of charities have turned to car-donation programs. You may have seen ads from some of these organizations Continue reading…
I’ve recently married, and we were wondering if there would be any advantage to filing our tax returns separately rather than jointly?
In general, your decision will depend upon which filing status results in the lowest tax. In most cases, filing jointly offers the most tax savings, particularly where the spouses have different Continue reading…
I heard that the IRS mileage allowance changed for 2011. What is the new amount?
Standard mileage rates increase for last half of 2011. The IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) is increased 4.5¢ from 51¢ to Continue reading…
I was injured on the job and am now receiving disability payments. How is this income taxed?
The key question is: Who paid for the benefit? If the income is paid directly to you by your employer, it is taxable to you just as your ordinary salary would be. (Taxable benefits are also subject to federal income tax withholding, although, depending on the employer’s disability plan, in some cases Continue reading…
My parents gave me some shares of stock they have had for a long time, and I would like to sell it. Are there any tax consequences when I do so?
In the event of a sale of a gift, you will have to determine your gain or loss, and for this you will need to know your “basis.” For most property you buy yourself, the basis is simply your cost. For property received as a gift, however, special basis rules apply. Continue reading…
