Choosing an Income Tax Filing Status
Selecting a filing status is one of the first decisions you’ll make when you fill out your federal income tax return, so it’s important to know the rules. And because you may have more than one option, you need to know the advantages and disadvantages of each. Making the right decision about your filing status can save money and prevent problems with the IRS down the road.
Tax Planning Tips: Life Insurance
Life insurance contracts must meet IRS requirements For federal income tax purposes, an insurance contract cannot be considered a life insurance contract–and qualify for favorable tax treatment–unless it meets state law requirements and satisfies the IRS’s statutory definitions of what is or is not a life insurance policy. The IRS considers the type of policy, […]
Tax Planning For Annuities
The after-tax money you pay into an annuity (in the form of premiums) is nondeductible. By placing funds in an annuity, you will not realize any current income tax savings, which you might receive by putting money into a traditional IRA, 401(k) plan, or other employer-sponsored retirement plan.
Taxation Of Investments
To determine how an investment vehicle is taxed in a given year, first ask yourself what went on with the investment that year. Did it generate interest income?
Are my Social Security benefits subject to income tax?
A portion of your benefits may be subject to income tax if your modified adjusted gross income (MAGI), plus one-half your Social Security benefits, exceeds specific limits.
Are life insurance proceeds income taxable?
In general, life insurance proceeds paid to you because of the death of the insured are not subject to federal income tax. To qualify for such favorable tax treatment, the life insurance contract must meet certain IRS requirements.
Post-Deadline Tax Tips
The tax filing deadline has come and gone. If you didn’t file a tax return or an extension but should have, you need to take action now.
Income Tax Planning And 529 Plans
There are two types of 529 plans — savings plans and prepaid tuition plans. The federal income tax treatment of these plans is identical.