Tax Treatment for Coverdale IRAs
A number of publications, including my own, have mistakenly reported over the past year that Coverdale IRAs, formerly known as Education IRAs, are tax deductible. Coverdale IRAs are not tax-deductible.Originally the concept of education IRAs was meant to provide a tax-deductible benefit that would defer taxes on contributions until the time of withdrawal, but the accounts were limited in size to only $500 per year. Due to the small allowable account size, these Education IRAs were not very popular with savers of financial institutions. Then in 2001 the amount of the allowable contribution was increased to $2,000 for individuals with an income up to $95,000 or couples filing jointly with an income up to $190,000. But the contribution is not deductible from taxable income for federal income tax purposes in the same manner as a traditional IRA account.One possible "work around" to achieve the immediate tax deferral benefit of deductibility is to make a regular tax deductible IRA contribution if you qualify, and then make a penalty-free withdrawal for education purposes in a later year.
Education expenses are one of the special IRA withdrawals allowed that are exempt from early withdrawal penalties. This tax issue aspect is separate and distinct from the issue of tax credits for higher education ? known as the lifetime learning credit and the Hope Scholarship credit. The tax credits have their own rules. Also, Section 529 tuition plans offer additional tax deferral alternatives.One common theme in all of these plans is that upper income taxpayers cannot effectively use these tools to reduce their current tax bill. These built-in income limitations plus the effect of alternative minimum tax rules make these tools ineffective for current-year planning, but can still have a significant tax effect over a longer period of time.
Upper income taxpayers should consider the use of various types of trust accounts for more effective income tax planning strategies.For more information on this topic, the IRS has a well-written Publication 970 titled "Tax Benefits for Higher Education. This is available by calling 1-800-TAX-FORM or on the Web at www.irs.gov/pub/irs-pdf/p970.pdf..
Deadline Near For Taxpayers with an Extension to File
(ContentDesk) August 12, 2004 -- For the almost 8.5 million taxpayers who opted in April to get an automatic extension of time to file their 2003 federal income tax return, the deadline to file those tax returns is August 16, 2004.Those who cannot meet the August 16th deadline can apply for an additional two-month extension, which would give them until October 15th.
However, there's no guarantee that the IRS will grant them an additional extension. If an application for an additional extension is not approved, an individual must file his or her tax return by August 16, or face paying a late filing penalty of 5 percent per month on the unpaid tax.Individuals who own a business have until their tax filing deadline to save on 2003 taxes by contributing to a SEP-IRA retirement plan, says Daniel Lamaute, retirement specialist at Lamaute Capital InvestSafe.com.
The SEP IRA contribution limit for 2003 is $40,000 or 25% of compensation, whichever is less.
A free application...
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Your Questions Answered - Can You Stretch a 401(k)?
A reader recently asked if his 401(k) could be rolled over, by his beneficiary, to a 'stretch' IRA after his death.
Read on to discover an answer that will protect your beneficiaries from tens of thousands of dollars in unnecessary taxes and keep your gift to them alive for generations to come. Whether or not your beneficiary can rollover your 401(k) at your death (and subsequently stretch it) depends on who your beneficiary is and the terms associated with your company plan. Basically, you usually can't stretch a 401(k) account directly, but if that money is rolled into an IRA, you can. This is a situation where the details matter.Let's assume for the sake of illustration that you have a wife and 3 children.
If your spouse is the beneficiary, she can roll the money from your 401(k) to her own IRA. Assuming that she has named the 3 children as beneficiaries of her IRA, they would have the ability to stretch it at her death. (?Stretching' an IRA refers to the ability for...
Your Questions Answered - Can You Stretch a 401(k)?
Ira > Your Questions Answered - Can You Stretch a 401(k)?
Roth IRA Limits
Named after Senator William V. Roth, Jr., the Roth IRA, or individual retirement arrangements or individual retirement accounts as they are commonly called, are fast emerging as popular saving schemes. The advantage of this scheme is that the tax payers, on meeting a certain eligibility criteria, can contribute some amount of their compensation income into the Roth IRA account, and the savings that grow in it will be tax-free.
One thing to be kept in mind is that the tax benefits accrue only when an individual withdraws money from the account. Withdrawals are subject to certain Limits in order to be tax-free.
First and foremost, a person who has either reached fifty-nine and a half years of age or has suffered some sort of disability can make the withdrawals after a period of five years. The withdrawn money will also be tax-free if the person needs it to buy, build or rebuild his first home.
Also, regarding contributions, there are certain set Limits....
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New Tax Bill Creates the Greatest Tax Break of Your Life
Pittsburgh, PA (ContentDesk) May 18, 2006 -- James Lange, CPA/Attorney, says
taxpayers with an AGI greater than $100,000 need to know about the New Open Season for Roth IRA conversions that is provided for in the new tax law.Respected Roth IRA expert Lange says: The new tax law is HUGE for taxpayers making more than $100,000 who have an IRA. The long term benefit to your family of making a Roth IRA conversion can be estimated by multiplying the current value of your IRA by 15. Wednesday, May 17, 2006, President Bush signed a major tax bill that
presents wealthy Americans with an outstanding lifetime opportunity. The Tax Increase Prevention and Reconciliation Act (TIPRA) will lift the $100,000 AGI ceiling on Roth IRA conversions for tax years after 2009. In 2010, wealthy Americans will, for the first time, qualify for
Roth IRA conversions. Lets look at a scenario:
a taxpayer makes more than $100,000 and he has a $500,000 IRA. If he converts his IRA...
Ira > New Tax Bill Creates the Greatest Tax Break of Your Life
SEP IRA Contributions for 2003 Can Still Be Made
Alexandria, Virginia (ContentDesk) January 22 2004--Small business owners still have a chance to cut their 2003 taxes by contributing to a SEP-IRA before filing their business tax return.
Employer contributions made to a Simplified Employee Pension-Individual Retirement Account, known as a SEP plan, are deductible for 2003, even if the SEP plan is opened and the contributions are made in 2004."A SEP-IRA allows small business owners and sole proprietors to cut their tax liability by making retirement contributions for their eligible employees," says Daniel Lamaute, retirement specialist at InvestSafe.com, a retirement planning website for the self-employed."The SEP-IRA has several advantages for employers", says Lamaute, "Employers get a tax deduction, and the SEP-IRA contribution is not taxed as income to the employees.
The earnings within the SEP IRA grow taxed deferred until the participant pulls the money out, usually at retirement." For 2003, employers can contribute...
Ira > SEP IRA Contributions for 2003 Can Still Be Made
How To Turn Non-Deductible Commuting Mileage Into A Legitimate Business Expense
Tax Tidbits: Presented by of www.YouSaveOnTaxes.com.Short but sweet nuggets for the Small Biz Owner and/orSelf-Employed Person, each morsel serving up a specific taxreduction strategy guaranteed to tickle your monetary taste-buds.The U.S. Tax Code is so big, there's only one way to digest it: one little nibble at a time.Just like a piece of candy, one small bite of taxknowledge can give you one very delicious deduction!============================================================Tax Tidbit #1...
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Homework Help for the Attention Deficit Child
Does the homework battle so typical with your hyperactive or A.D.D. child have you at the end of your rope? Relax. We have some tried-and-try ADHD information that should get your A.D.D. child on the right homework path.The hyperactive or A.D.D. child especially needs consistency, a work place free of distractions, solid encouragement and praise - along with established consequences if the positive homework tips fail.
Establish a Set Homework Routine:
Because the A.D.D. child...Ira Homework Help for the Attention Deficit Child televisions Tax Treatment for Coverdale IRAs
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HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
(ContentDesk) June 14, 2004 -- We all know that when it comes to Home improvement on the web there's basically one place to go and that's HomeDepot.com. When it comes to office supplies the address is OfficeDepot.com. But where does one go to purchase relaxation and anti-stress products? Very simple: RelaxDepot.com. We are bombarded day in and day out how stress is the silent killer, how stress is the springboard for a whole host of illnesses and diseases. What can we do to eradicate stress from...
Ira incorporate HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
Ira > HomeDepot.com, OfficeDepot.com and Now RelaxDepot.com
Creative Digital Media Announces 'Radio Electric' -- A New Concept in Internet Radio and Music Promotion
Miami, FL (ContentDesk) May 3, 2006 -- Creative Digital Media today announced the launch of Radio Electric (http://www.radioelectric.com), an Internet radio channel and "collaborative music network." Conceived as a new approach to Internet radio, Radio Electric broadcasts an exciting, fresh and varied mix of new independent artists in a wide range of genres. At the same time, Radio Electric is modeled as an online social network, providing...
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Ira > Creative Digital Media Announces 'Radio Electric' -- A New Concept in Internet Radio and Music Promotion
Birthday Cards
When giving a birthday gift to someone, why not add a few personal touches? Accompany the present with a birthday card. Sometimes, it means more when people read in black and white just how much they mean. If it is a client you are giving a gift too, it won't hurt to let sincerity flow through. It might just be what you need to cement a lasting, mutually beneficial relationship between your companies. Birthday cards and what you write on them usually last longer in memory than the material gift....
business cards
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