April 20, 2014

Realize Some Capital Gains Each Year To Keep Taxes Low

Monopoly Stock Sale

There are at least four different capital gains tax rates. Here’s how to minimize yours.

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What Do You Mean I Owe An Extra $100,000 In Taxes?

Businessman Target

Ah, the joys of being a small business owner in 2013.

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Gift Tender Offers To Charity To Avoid Capital Gains Tax

Gift with Yellow Bow

This technique can avoid paying any tax, a savings worth up to 36.1%.

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Tax By Inflation

The Fading Dollar

In its simplest form, the government prints money and uses the newly printed currency to fund government spending.

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Every Business Should Start a 401(k)

Small business owners

The president’s hope to restrict the plans should actually make owners more interested in creating one.

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How To Report Backdoor Roth In TurboTax

Turbo Tax Backdoor Roth

How to report a backdoor Roth in Turbo Tax.

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2014 IRA & Roth Contribution Limits

2014 Retirement Plan Contribution Limits

Plan to max out your retirement contributions for 2014 — your future self will thank you.

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2014 Employer-Sponsored Retirement Plans

2014 Empoyer-Sponsored Retirement Plans

It’s important to know the limits so you don’t over-contribute and incur tax penalties, but contribute just the right amount (based on your income) for your future standard of living.

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How Long Should I Keep Financial and Tax Records?

Tax Files

Whenever the IRS challenges you, the burden of producing evidence that your claims are true rests entirely with you.

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The Ruse Of Healthcare To Justify Massively Higher Taxes

Rich Men Rule

At least there will be less rich people to hate.

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2013 IRA & Roth Contribution Limits

Retirement plan contrib limits 2013

There’s still time to make sure you’ve maxed out your retirement contributions — your future self will thank you.

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How to Calculate An Advisor’s Value: Tax Efficiency

Chess White Pawn

A dollar saved on your taxes is better than a dollar earned which causes you to pay more tax.

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Rules For Selling Highly Appreciated Stock

hurdle tables

Now that the Bush tax cuts have expired and Obamacare will add additional tax burdens, many people need to think twice before realizing a large gain on their investments.

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How to Make Money Paying Virginia Income Tax

Will pay taxes for money.

Don’t hesitate to take advantage of this tax code oddity.

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NCEF Seminar in Charlottesville: “Tax Planning for Seniors”

Tax Form 1040

On April 25, David John Marotta discusses details of IRS form 1040 and other tax documents, how you can use your tax return to glean information about your financial habits, and ways to optimize your accounts.

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IRA Cap Gives Rise to New Funding Strategies

Be Outraged And Fund Your Roth

President’s proposal comes with silver linings for shrewd advisors

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Tax Planning

Dorothy and Toto 1040

A dollar saved on taxes is worth more than a dollar earned. If you earn another dollar, they will just tax you again.

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Tax Season – Wealth Management Carnival #11

Carnival - Taxes

With the federal tax filing deadline upon us, here are some articles on little-known tax tips, interesting facts, good advice, and general information about taxes. Some of these are applicable now, and some you might want to store away for next year.

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Keep Working and Hire Financial Professionals

How To Build Wealth

For families with complexity to their finances, hiring a tax professional actually saves them money. Wealth managers bring benefit to such families in the same way.

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Video: Even the Beatles were against highly progressive taxes!

Taxman

Let me tell you how it will be: There’s one for you, nineteen for me. Should five per cent appear too small, Be thankful I don’t take it all.

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Is 95% of the Trade Imbalance Legal Tax Evasion?

Stark International

As one of Forbes’s 25 largest fictional companies, Stark International could avoid $4 billion in U.S. corporate taxes with this one simple technique.

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Video: How to Check Up On Your Charity

Marotta Youtube

Maybe it is time you checked up on your favorite charities before making your next gift.

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15 Tax Moves For Right Now. Really?

1040-2013

Do any of these ideas suggest any incentive for the highly productive to continue producing?

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Dwight D. Eisenhower on tax cuts and a balanced budget

Dwight D. Eisenhower

“Until the deficit is eliminated from our budget, … there is no end to inflation; there is finally no end to taxation; and the eventual result would, of course, be catastrophe.”

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Is a National Sales Tax Really Fair?

Fair Tax

Claims of “fair” or even “regressive” or “progressive” depend very much on what is used as the denominator.

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Let the Income Tax Die at Age 100

Income Tax

The income tax penalizes productivity, discourages hard work, and suppresses investment.

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Earned Income Tax Credit (EITC) Punishes Marriage

Wedding Couple

The maximum income for a couple is not double what it is for a single person. Your spouse’s income can disqualify you from credits you could have received if you had not been legally married.

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Earned Income Tax Credit (EITC) Marriage Penalty of $3,603

Wedding rings and money

The maximum income for a couple is not double what it is for a single person. Your spouse’s income can disqualify you from credits you could have received if you had not been legally married.

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Earned Income Tax Credit (EITC) Marriage Penalty of $8,400

Wedding rings and money

The worst marriage penalty is for couples earning between $26,000 and $60,000 who have three or more children.

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Trickle-Down Taxation

Trickle Down Taxation

One of the strange and unintended consequences of targeting the rich with more taxes will be a greater gap between the rich and the poor as employees will shoulder their fair share no matter what.

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Financially Savvy Kittens on Gifts to Charity

Financially Savvy Kittens on Gifts to Charity

This kitten gifts appreciated stock. Be more like this kitten.

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Tax on Dividend-Paying Stocks Rising to 74%

2013 California Dividend Taxes

With the enormous increase in the taxation of dividends, high net worth investors may be tempted to abandon dividend-paying stocks entirely. This is not necessary.

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Capital Gains Tax is an Economic Monkey Wrench (2012)

15 mph

Tax on capital gains is scheduled to rise and become much more complex at the end of this year. Keeping your head in the midst of these changes can help your bottom line. Government should tax either the value of an asset or its yield but not both.

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Last Chance for a Roth Conversion during 2012

Last Chance for a Roth Conversion 2012

While Roth conversions will be advantageous for some next year, they are advantageous for nearly everyone in 2012.

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Seven Tax-Planning Strategies to Dodge the Tax Bullet

1040-2013

The victors in the recent election have declared it open hunting season on the rich, which they evidently believe will solve our spending problems. Tax hikes everywhere are aimed at the most productive members of society.

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Mailbox: Disturbed by Romney’s tax computation in California

Disturbed by Romney's tax computation

Personally I think it is a mistake to value supporting the government (taxes) higher than supporting society (charitable giving).

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IRS Notice of Proposed Adjustment for Underpayment/Overpayment (CP2000) for 2010 Roth Recharacterization

IRS CP2000 Notice

Currently the IRS is sending notices to anyone who did a Roth Recharacterization in 2010 asking them to pay as though they kept the entire conversion amount.

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A Progressive Tax Code is Economically Destructive

Marginal Rate -100

Most Americans assume a progressive tax code is needed to promote equality and remove some of the burden of other taxes on those with the lowest income. But the progressive nature of the tax code changes behavior in many ways.

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Smart Tax Planning for the Gap Years

Three Generations

Many families seek financial planning advice specifically for retirement. But if they wait too long, they miss an important tax-planning opportunity. A great strategy is to take advantage of the time between retirement and Social Security at age 70, the so-called gap years.

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Mailbag: How can I get started gifting appreciated investments?

Gift with Yellow Bow

Do I start planting investments and then refrain from giving for ten years?

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Tax Planning: Choose the Appropriate Investment Vehicles

Dorothy and Toto 1040

Here are some additional tax planning resources regarding choosing the appropriate investment vehicles.

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Tax Efficient Investing

Wizard of Oz Money

It can be useful to maintain a grid where all of the available asset classes are arranged in order, by tax efficiency and potential return based on time horizon, so clients can clearly see when and where tax-deferral can offer the greatest benefits.

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Are Investment Management Fees Tax Deductible?

Wizard of Oz Money

I often get asked, “Are investment management fees tax deductible?” The answer is not a simple “yes” or “no.” Like many tax questions, the answer is “It depends.”

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Radio: Tax Planning in 2012

Marotta on the Radio

David John Marotta was interviewed on radio 1070 WINA’s Schilling Show discussing tax planning in 2012 and the most important things to do now to prepare for rising taxes in 2013.

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How Does Marital Status Affect Your Federal Taxes?

Marriage Penalty

Laws have always regulated who may marry, the obligations related to marriage and children and whether and how a marriage can be ended. Governments have always put their own social agenda above the pluralism of personal choice.

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Mailbag: I’d like to withdraw money from my IRA to purchase physical silver.

1000oz Silver Bar

Precious metals will, on average, just keep up with inflation, but your after tax return would mean you fell behind inflation by the 28% tax you must pay.

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Last Chance for 0% Capital Gains Rate

0 percent_t

Most infomercials that begin with such urgency are trying to get you to buy something, but in this case I want you to consider selling.

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Capital Gains Tax Rising

cap_gains_tax_chart_t

Starting in 2013, pending further legislation, the capital gains tax will go up to 20%.

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Double-Taxed Dividends: Going Up

2013 Dividend Taxes

The qualified dividend tax rate is currently at a maximum of 15%, as are capital gains. Starting January 1, 2013, dividend tax rates will go up to the investor’s ordinary income rate.

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How do I allocate investments with captial gains among taxable and traditional IRA accounts?

Dorothy AMT

There is a distinction between existing high capital gains exposure in a mutual fund verses future capital gains you expose yourself to.

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