Taxpayers are often confused about when a gift is taxable or nontaxable. We thought it would be a good time to review some basic information on the annual gift tax exclusion. Most gifts are not subject to the gift tax. For example, there is usually no tax when you make a gift to your spouse [...]
There’s a lot for taxpayers to know when it comes to the 3.8% net investment income tax (3.8% NIIT). This new tax is imposed on income from several sources and its impact is far reaching. Analyzing its impact can get complicated fast. Originating as a component of 2010 health care legislation and first effective in [...]
Health savings accounts (HSAs) were created as a tax-favored framework to provide health care benefits mainly for small business owners, the self-employed, and employees of small-to medium-sized companies who do not have access to health insurance. The tax benefits of HSAs are quite substantial. Eligible individuals can make tax-deductible (as an adjustment to AGI) contributions [...]
Variable annuity contract distributions generally contain two components, taxable income and nontaxable return of basis (investment). However, distributions received before the annuity starting date (nonannuity distributions) are likely to be less taxpayer-friendly. Initially, these generally consist entirely of taxable income until all of the annuity contract’s earnings have been distributed. Subsequent payments are considered to [...]
Although we can’t escape death or taxes, we may be able to minimize the federal income taxes due on our final Form 1040. Filing a tax return after we die (we are then known as the “decedent”) is probably not something most of us think much about. But, a final Form 1040 generally must be [...]
One of the most popular tax deductions for individuals is the one allowed for donations to charitable organizations-from the local church or synagogue to the Red Cross and various other national organizations. Unfortunately, this deduction has also been among the most abused. Thus, perhaps it is not surprising that Congress has responded to the problem [...]