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Investment Planning
The 1997 Taxpayer Relief Act changed the rules on how to invest dramatically when it lowered the long-term capital gains rate to 20% (10% for those in the 15% tax
bracket). That's a rate difference of 19.6% for some high-bracket taxpayers between ordinary dividend, interest or short-term capital gain income and long-term capital gains. The 1998 IRS Restructuring and
Reform Act increased these advantages further by lowering the holding period for long-term capital gains from 18 months to 12 months. Some relative short plays in the stock market, therefore, can now be
taxed at 20% if the investor keeps careful track of holding periods and trade dates. |
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Retirement Planning
Regular investments, Roth IRAs, traditional IRAs, 401(k) plans, pension plan pay-outs, lump-sum options, annuity options, minimum required distributions, emergency
withdrawals, income averaging, the choices and decisions that need to be made about retirement financial and tax strategies have increased ten-fold over the past several
years. No matter what your age,
tax strategies in this area have changed enough to
warrant review of present and future options. Particularly in the case of Roth IRAs, just-issued final IRS regulations on this unique form of savings
makes examination of this alternative worth a second look. |
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Alternative Minimum Tax
The alternative minimum tax (AMT) was originally enacted years ago to prevent the rich from avoiding the payment of any tax liability through deductions and tax preferred income
(tax-exempt bonds, etc.). Now, however, inflation and changes in the amount of deductions taken by ordinary taxpayers have been pulling many middle class and
upper-middle class taxpayers into an AMT situation. High
property and state income taxes, mortgage interest deductions and even simply having a large family with more than the usual number of dependents can throw the ordinary citizen into the AMT. Proper planning can either
avoid or minimize this new, "hidden" tax.
As you may gather, the tax law has changed considerably during the past year…and it will continue to change as Congress gets ready for another round of tax
legislation this summer and fall. Please contact us at this time if you would
like further explanation of any of the tax developments that have taken place. If you wish to set up an appointment to discuss more
specifically how these changes, and pending changes, impact your situation, and what we can do about them at this time, please do not hesitate to call. |
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Education Planning
In our increasingly knowledge-based economy, continuing education is often a good investment. Suddenly, starting with the1998 tax year, taxpayers can take advantage of new
education tax credits, deductions for student loan interest, employer reimbursement income exclusions, and tax-free education IRAs. Maximizing the use of these significant
new tax breaks, for both young college
students and those returning to school for further education or retraining, requires careful timing of expenses and evaluation of present and anticipated levels of income. Here, too, new IRS rules and regulations issued
over the past several months have revealed new planning opportunities and pitfalls. |
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Y2K - Is your
System Ready?
Y2K is coming and we are prepared to help you with your Y2K accounting software issues. Now is the time to evaluate your accounting systems, as there is a process of
time
involved in installing, configuring and testing an accounting system to be sure everything is up and running without problems. An accounting system that doesn't know if it is the year 2000 or 1900 come January 1, could
cause a lot of problems for your business. We are interested in seeing your business thrive well into the 21st
century. Please call us if we can help you. |
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