Sell stock or property at a gain and pay little or no federal tax!

Here is something  to think about. Do you have a building, piece of land, stock or other capital investments that has increased in value?

If you are in the 25% bracket or higher, the tax rate on long term capital gains will be only 15% in 2010.  If you wait until 2011 to sell, the rate is scheduled to be 18% or 20% depending on your holding period.

If you are in the 15% tax bracket or lower, 2010 is your last chance to sell assets held long term a a gain and pay no federal tax.  State taxes may apply, however.

WHAT TAX BRACKET ARE YOU IN?

If your income including the gain is under $43,350 (single), $86,700 ( married-joint), or even higher if you can itemize or are over 65, you are in the 15% or lower tax bracket and a candidate for a free sale.

A little tax planning could save you a lot of tax.

Give us a call to review your situation.  We may never have this opportunity again in our lifetime.

Let us know what you thought of this article.

Here are some sites that talk about this opportunity.

• Long Term Capital Gains Tax Rates Increase in 2011 (bargaineering.com)
• Relief at lower-than-expected rise in capital gains tax (independent.co.uk)

Buying a new house, don’t be rushing to file your 2009 tax return!

If you bought a home in 2009 or early 2010,you may qualify for thousands of dollars of tax relief, thanks to a home buyer tax credit. The first home buyers credit which was originally offered back in 2008 has been updated to a tax reduction up to $8,000.  In addition, this credit has been extended to home buyers who have owned and lived in a home for at least five consecutive years of the eight years before the purchase of a new home.

This credit has been extended for contracts made before April 30, 2010 and closing on the purchase by June 30, 2010.  You can elect to take the credit for 2009 even though the transaction is in 2010.   If you close soon, you can take this credit on your 2009 tax return without amending the return or going on extension. There are certain requirements as far as income and the cost of the home that have to be met. Bottom line, if you are about to close on your new home, hold off filing your return.  We can help you figure what is the best way to get what is entitled to you.

New Education Tax Credits- Especially Purdue Students!

The Education tax credits to be taken on 2009 have been greatly expanded. There is now three types of credits. New this year is the American Opportunity Credit.

Income limits have been expanded to include adjusted gross income for married filing jointly up to $180,000 for the American Opportunity Credit.   The Hope credit and the Lifetime Learning Credit have also been expanded.  Also new this year are special rules for students in Midwestern Disaster Areas.   Purdue University falls in this area.  The rules are complex and  you need to determine which credit and what expenses qualify to give you the best benefit.

Many tax software programs are not able to calculate the best method.  Thousands of dollars are at stack. Don’t leave money on the table.   See us as we will be able to take the pain out of  tax filing  for this year as well as help you plan for future college costs and its affect on your retirement.

Federal Tax Levies Can Be Prevented

I came across this article on Federal Tax Levies that may be of some use when unfortunately due to the economic times, more and more people are in this predicament.  I have not used their services nor do I take any professional responsibility. Howard

The author of a blog submission I came across about an IRS challenge seemed to be a woman. She writes:

“I used to owe the IRS about 25,000 dollars, that’s with fees and penalties and with no hope of getting the bill down.”

This gal should think about that we have a right to sustain our lives by our labors and the government can’t tax rights; or our very right to exist. Most of the community doesn’t know this though, including IRS personnel. She continued:

“First we tried monthly payments and that did not work out. Then the IRS levied our pay check from work leaving us with 400 dollars to live on.”

This could have never happened if this woman had known about my IRS Terminator package. She could have studied up on how to request and succeed at a CDP Hearing (Collection Due Process Hearing), implemented what she learned, and all tax collection action would have come to a standstill; including the garnishment of her wages. The writer continued:

“At that time we had seen an ad in the paper for Harrison Grave that will help people get rid of the IRS problems. We went to see them, not knowing that this was not even their official office but a temporary leased office. They told us it would cost total of 2,000 dollars to help us. We were so scared and had no idea what to do, so we accepted and began making payments to them to help us talk to the IRS.”

In Houston, Texas on July 12, 2005, Steven T. Miller, Commissioner TE/GE gave a speech to IRS Tax Forums saying the following:

“I want to salute our partners who have been such a big help at these forums. I want to thank, in alphabetical order, the American Bar Association, the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, the National Association of Tax Professionals, the National Society of Accountants, and the National Society of Tax Professionals.”

Mr. Miller told the CPAs and other tax professionals in attendance that he wanted to be of assistance to them  and that the help he was was assuring them of would take the shape of continuing to upgrade the IRS’s electronic and information services, updating the Service’s computers, and energetically enforcing the law against the dishonest few who are a threat the integrity of their/our industry.

This looks like compelling evidence that orgainizations like Harrison Grave are really the IRS’s collaborators in collecting taxes. Maybe this is why no actions were taken by them to bring to a halt the levy. The writer continued:

“We submitted the information they needed to began the process and after nine month and still did not hear anything from the Harrison and Grave people we called them asking for an update on what was going on. Needless to say they gave us the run around. I even drove to their office in NC to see them and still no results. They took our 2,000 and did nothing for us. When I called them at that time and told them the IRS is Levy our pay check they said “We have a special team working on your case to stop the Levy’s.” That was all a lie. The IRS levied our second pay check… I knew Harrison Grave was a joke…”

Sad stories such as this are why folks in a position of having outstanding taxes, unfiled returns, or returns filed under what is considered by the mainstream as  an unusual theories of law such as a Cracking the Code return should prepare by preparing in advance how deal with a notice of levy.

Follow me on Twitter.com/legalbear See you there.

Stopping Internal Revenue Service Notices of Levy on Your Bank

I came across this article on Federal Tax Levies that may be of some use when unfortunately due to the economic times, more and more people are in this predicament.  I have not used their services nor do I take any professional responsibility. Howard

Did the IRS Levy Your Bank or Employer?

When your work place notifies you that they have a Notice of Levy from the IRS instructing them to keep most all of your next paycheck is one of the worst feelings. Equally bad, is when your financial institution  gets a Notice of Levy from the IRS and notifies you that they intend to deliver the funds in your bank account to them. Sometimes the IRS doesn’t comply with the law and send the required notice. Usually when that happens, a Notice of Levy is a nasty surprise. 26 USC § 6330 provides in pertinent part:

(a)  Requirement of notice before levy
(1) In general
No levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made. Such notice shall be required only once for the taxable period to which the unpaid tax specified in paragraph (3)(A) relates.

26 USC § 6330 provides this respecting the timing and manner of service of the notice:

(a)(2)  Time and method for notice
The notice required under paragraph (1) shall be-
(A) given in person;
(B) left at the dwelling or usual place of business of such person; or
(C) sent by certified or registered mail, return receipt requested, to such person’s last known address;
not less than 30 days before the day of the first levy with respect to the amount of the unpaid tax for the taxable period.

When you receive the aforementioned notices and look at them timely, you should see that 26 U.S.C. § 6330(e) provides that as soon as a Collection Due Process Hearing (CDPH) is timely asked for “the levy actions which are the subject of the requested hearing…shall be suspended for the period during which such hearing, and appeals therein, are pending…” This provision renders the request for a Collection Due Process Hearing (CDPH) a extremely efficient means to halt an IRS levy on a bank account or paycheck.

On an occasion in which a levy was received by an employer but the notice had not been served as required by the above statutes, I have seen the IRS fax a release of levy to an employer in as little as two days subsequent to CDPH hearing request being sent. Now, employees knowledgeable about these provisions in the Internal Revenue Code will be able to get their full paycheck while the hearing is pending. Almost anyone can bring a halt to an IRS levy by timely requesting a CDPH hearing as provided in 26 U.S.C. § 6330(b)(1). I make available the forms to competently request a CDPH hearing in a situation where the statutorily required notice has not been sent at www.irsterminator.com.

There cannot be enough emphasis given that when you receive the notice, you must request the hearing timely. 26 USC § 6330(a)(3) specifies that the information included with the notice the IRS sends you shall include:

“The notice required under paragraph (1) shall include in simple and nontechnical terms-
(B) the right of the person to request a hearing during the 30-day period under paragraph (2);”

However, if the IRS never served you with a notice, it is impossible to establish when the 30 day period begins and ends. The free videos at www.irsterminator.com explain how to inform the IRS that their failure to serve you with the statutorily required notice makes your request for a hearing timely and entitles you to the suspension of collection activities including the levy at your bank or employer. Plans I have come up with to keep collection activity suspended permanently are discussed on those videos. Keeping collection activity suspended permanently is the challenging part.

Follow me on Twitter.com/legalbear See you there.

Beware of Tax Preparers

Hi!

Several weeks ago, I published an article on what to look for when hiring a tax preparer. Today, I found an updated article on the subject. Check out this great article.

Don’t Mess With Taxes

End of the Year Tax Planning- Your W-4

Hi!

Happy Holidays and hope you have a Healthy  New Year!  Now that we are about ready to begin a new tax year, its time to start planning for 2010. Here is a link to a great article on looking at your w-4 to make updates  on your tax withholding for 2010.   Follow  the link below and  let me know what you think.

http://trishmc.typepad.com/mac_tax_talk/2009/12/your-w4.html

2009 Year End Tax Tips- Capital Gains and Losses

Capital Gains and Losses

For tax purposes, capital gains and losses are used to offset each other.  However, any excess capital loss can also offset up to $3,000 of high-taxed ordinary income in 2009.  The remainder is carried over to next year.  If a gain qualifies as long-term capital gain (i.e., you have owned the asset for more than a year), the maximum tax rate on the gain is normally 15% (5% for low-income taxpayers).

Year-end strategy: When it makes economic sense, “time” capital gains and losses.  For example, if you have already realized capital gains in 2009, you might realize capital losses at year-end to absorb those gains.  Similarly, if you have realized capital losses in 2009, gains realized at year-end can offset those losses.  For taxpayers in the regular 10% or 15% tax brackets, the maximum tax rate for long-term capital gains of 5% is reduced to 0%.  Even taxpayers in higher tax brackets may benefit from the 0% rate on a portion of their long-term capital gain.

Tip:  Depending on your situation, you might have children in low tax brackets sell securities to realize long-term capital gain in 2009.  This tax break is scheduled to expire after 2010.

Let me know if you will be using this strategy this year.

2009 Year End Tax Tips- 401(k) Plans

401(k) Plans

A 401(k) plan allows you to allocate a portion of your salary to an account where the funds can grow on a tax-deferred basis.  In addition, your company may provide matching contributions based on a percentage of your salary.

Year-end strategy: Adjust your 401(k) plan contributions to increase your retirement nest egg.  For instance, you might defer more dollars to your 401(k) account after you clear the 2009 Social Security wage base of $106,800.  This will result in little or no reduction in your take-home pay.  As with other tax-qualified retirement plans, a 401(k) plan must meet strict nondiscrimination requirements to maintain its tax-favored status.  There is also an annual dollar cap on elective deferrals.  For 2009, you can defer a maximum of $16,500 to your account.

Tip:   If you’re age 50 or over, you can add a “catch-up contribution” of $5,500.  Thus, the total maximum annual deferral for taxpayers age 50 or over is $22,000.

Stay tuned for more 2009 Year End Tax Tips

Related articles on Retirement Funding

• 3 easy ways to start saving now (money.cnn.com)

2009 Year End Tax Tips- Medical Expenses

Medical Expenses

Typically, you may not qualify for medical deductions on your tax return.  Reason:   You’re entitled to a deduction only to the extent your unreimbursed medical and dental expenses for the year exceed 7.5% of your AGI.

Year-end strategy: If you are near the 7.5% mark—or already over it—schedule nonemergency medical and dental visits before year-end.  For instance, you might have an eye examination and end up ordering new glasses.  The additional expenses can help you qualify for a medical deduction in 2009 or increase your existing deduction.  You may be closer to qualifying for a medical expense deduction than you think.  If you’re like most employees, you must contribute an ever-escalating amount to the company health insurance and/or dental plan.  When you add in the other expenses, co-payments and deductibles, you might qualify for a deduction in 2009, especially if your family has incurred other sizeable expenses this year.

Tip:  Conversely, if you definitely will not exceed the 7.5% mark for 2009, you may as well postpone nonemergency expenses to 2010.  The basic idea is to bunch together medical and dental expenses in the year they will benefit you the most.

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