| Don't let an audit sneak up on you
Pressured by Congress to collect more money, the Internal Revenue Service has been busy boosting its audits, particularly among high-income earners. It's forcing taxpayers to be increasingly vigilant in order to avoid waving red flags in front of the tax man. Tax officials are careful not to divulge their formulas for spotting suspected tax cheats. But they say that trouble is most widespread among people whose income isn't reported separately to the IRS, or who deal in large amounts of cash. That's bad news if you're a small-business owner -- whether restaurateur, locksmith or gift-shop owner -- with lots of money moving through the till. Other warning signs: Claiming unusually large deductions relative to your income. In one recent case, a self-described "impulsive buyer" in New York tried to deduct $48,954 for charitable donations of clothing, jewelry and other items to a thrift shop and other groups.
Options to cut taxes on estate
I am 50, and I'm concerned about avoiding estate taxes on two fronts. I want my parents' money to stay in the family, and I want my money to pass to my children. Many couples between 50 and 80 who live on Long Island have $1 million to $4 million in assets. Let's face it: If you own a home, have some life insurance, IRAs and a 401(k), you are a millionaire. There's a heavy federal tax on everything above the first $2 million of your estate. What's the best way to avoid this tax? More important, the federal law expires in 2010. If we revert to the old law, a much smaller amount will be sheltered. Your recent articles seem to play down the value of living trusts. Wouldn't these be of use here? What other vehicles can a person use to avoid estate taxes if he wants to control his funds until he dies instead of gifting them away?
D.N., Massapequa
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Marines to get thanks in cards
Women Working Wonders, a local charitable organization, is teaming with the Cathedral City Stater Brothers supermarket at Ramon Road and Date Palm Drive to collect gift cards to distribute to Marines returning May 6 from a tour of duty in Iraq. Here's how to help:Buy one or more of the dozens of different kinds of gift cards available at Stater Brothers, in a denomination between $10 and $100.Drop the cards in a lock-box at the end of the checkout counters at Stater Brothers between now and May 1. If you include your name and address and store receipt, the donation can be made tax-deductible.Volunteers will collect the donated gift cards and include them in care packages for distribution to the returning Marines at their May 6 homecoming at the base in Twentynine Palms.
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Do well while doing good
As another income tax season draws to a close, now is a great time to think about reducing your income tax liability for the current year. One way to do so is by increasing your charitable contributions. As most of you are aware, gifts to charitable organizations are deductible for federal income tax purposes if you itemize deductions. Gifts of cash to most charities are deductible in an amount equal to 50 percent of your contribution base (generally your adjusted gross income) while gifts of appreciated property are generally deductible in an amount equal to 30 percent of your contribution base. If you make a gift that exceeds the amount that you can deduct in the year of the gift, you are permitted to carry the unused charitable deduction forward for up to 5 years. If you have marketable securities or real estate that have appreciated in value, it is generally preferable to donate these assets to a charitable organization rather than selling these assets and making a cash gift, because no long term capital gain is recognized on appreciated assets that are donated to a charity.
ILIT's Offer Exceptional Estate Tax Planning Benefits
2007-04-13 09:52:44 - What is Irrevocable Life Insurance Trust or 'ILIT-? What are its benefits? Shawn Christopher, an attorney licensed in Nevada and California, discusses Irrevocable Life Insurance Trust ('ILIT-), its benefits and things to consider in implementing it in this article. By Shawn Christopher An Irrevocable Life Insurance Trust ('ILIT-) is a trust which owns life insurance policies. Generally, life insurance proceeds are included on your estate for federal estate tax purposes. Depending on the size of an estate, there may be federal estate taxes due upon death. If the ILIT is established and operated correctly however, the insurance proceeds. - work from home
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