• Home
  • E-Booklets
  • Pay Less Tax
  • Privacy Policy
  • Cheatsheets
  • Contact Us
  • About us

Retirement Income

New Ways to Get More Retirement Income

  • Retirement Advisors
  • Retirement Insurance
  • Retirement Investing
  • Retirement Living
  • Retirement Planning

Tax Strategies Necessary to Use Tax Deductions Properly

Posted on March 7, 2009 by bobrichards

As a careful taxpayer, you most likely maintain good records so you can make the most of itemized deductions when you or perhaps your accountant completes your tax return. Have you realize though, that the tax strategy to optimize deductions may expose you to an entirely distinct set of rules that may result in extra taxes?

The alternative minimum tax (AMT) is a tax that could become more than the normal income tax. Congress's logic for the AMT was to prevent individuals with high incomes from using particular tax strategies and therefore paying little or no tax at all. Nevertheless, more and more taxpayers are finding themselves subject to the AMT, although they do not have extraordinarily high incomes or use many special tax benefits.

The Taxpayer Advocate Service, an autonomous organization within the IRS, noted that the AMT has effects on significant numbers of middle-income tax payers and will, absent a change of legislation, impact more than thirty million taxpayers by 2012. Inflation is a major cause increasingly more individuals might be hit with the AMT since the threshold for AMT does not move automatically with inflation contrary to the rest of the tax regulations.

Especially exposed are those with incomes between $100,000 and $500,000. Nevertheless, don't believe that simply because your income is less, you will not have a problem. In the coming years, the share is anticipated to expand the most for taxpayers with incomes between $50,000 and $100,000. Those not accustomed to using tax strategies to reduce taxes will require to pay attention.

The AMT possesses its own rules that are not as generous as the normal guidelines to find out just how much a taxpayer should pay. If you are paying at least that quantity, you don't need to worry about the AMT. However, if your normal income tax is beneath the AMT, you will have to pay the extra tax.

There are a number of things that cause you to get an AMT liability. These consist of:

• Exemptions for a spouse and dependents
• Medical expense deductions
• State and local taxes, such as property and income taxes
• Interest on 2nd mortgages, unless the money was used to buy, construct, or enhance the house
• Interest on home equity loans, except if the cash was utilised for home improvements
• Miscellaneous itemized deductions
• Certain credits
• Capital gains
• Incentive stock options
• Tax-exempt interest from private-activity bonds
• Tax shelters

Smart tax strategies are the key to ensuring that you pay no more than necessary, whether you are subject to the conventional rules or AMT guidelines. For instance, you might discover that you might need to pay the AMT in some years although not others. 1 tax strategy would be to 'bunch' a few of these deductions, like miscellaneous itemized deductions and health-related expenses, in non-AMT years, since they will not be of great benefit in years in which AMT applies. I solidly recommend all traders seek the advice of with their own qualified tax expert prior to making any investment decisions.

You Pay More Taxes Than Necessary

And we guarantee your CPA has never told you The problem with paying taxes is that most people overpay. So if you are concerned about having enough in retirement, you must stop overpaying taxes. I know you think your CPA takes care of this for you. WRONG. I AM a CPA (retired) and I can tell you that 90% of CPAs do nothing more than enter your information into the little boxes on the tax return but NEVER tell you how to pay less next year. Why? Many of them simply do not know what we can show you. In ten minutes.
Get Your Copy Now - 6 Ways to Cut Retirement Taxes

You might also like:

  • Retirement Solutions— Difficult Trends and What You Can Do
    Retirement Solutions— Difficult Trends and What You Can Do
  • Estate Financial Planning Has Nothing to Do With Your Wealth
    Estate Financial Planning Has Nothing to Do With Your Wealth
  • Use Life Insurance in Estate Planning to Treat Beneficiaries Equally
    Use Life Insurance in Estate Planning to Treat…
  • Social Security Office Cheating Retirees
    Social Security Office Cheating Retirees
  • What's the True Cost of Senior Healthcare
    What's the True Cost of Senior Healthcare
  • Transition to Retirement - Six Aspects that Help
    Transition to Retirement - Six Aspects that Help

Filed Under: Tax Savings

About bobrichards

Bob Richards
Editor | Involved in Various Marketing Positions within the Financial Services Industry

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Second place winner best retirement blog

SH award winner SMALL (1)

Not Enough Savings to Retire?
Learn Six Ways to Earn Retirement Income (from home)

You do not need special talents, skills, computer knowledge, etc. We show you multiple ways others are working a few hours a week to generate a comfortable retirement income.

Download Free Copy

Latest Posts

Update on Social Security Cash Flow

Update on Social Security Cash Flow

What's the True Cost of Senior Healthcare

What's the True Cost of Senior Healthcare

Social Security Office Cheating Retirees

Social Security Office Cheating Retirees

Use Life Insurance in Estate Planning to Treat Beneficiaries Equally

Use Life Insurance in Estate Planning to Treat Beneficiaries Equally

Estate Financial Planning Has Nothing to Do With Your Wealth

Estate Financial Planning Has Nothing to Do With Your Wealth

Categories

  • 401K IRA Roth Withdrawals, Distributions, and Rollovers
  • Annuities for Income
  • Estate Planning
  • Retirement Advisors
  • Retirement Insurance
  • Retirement Investing
  • Retirement Living
  • Retirement Planning
  • Social Security
  • Supplemental Retirement Income
  • Tax Savings
  • Alternative Investments
  • E-Booklets
  • Pay Less Tax
  • Privacy Policy
  • Cheatsheets
  • Contact Us
  • Subscribe
  • Sitemap

Recent Posts

  • Update on Social Security Cash Flow
  • What's the True Cost of Senior Healthcare
  • Social Security Office Cheating Retirees
  • Use Life Insurance in Estate Planning to Treat Beneficiaries Equally
  • Estate Financial Planning Has Nothing to Do With Your Wealth

The Retirement Income Blog

25A Crescent Drive #1508
Pleasant Hill CA 94523
T: 844-887-4131
E: [email protected]

© 2018 Retirement Income