Mike's weekly post usually concentrated on tax saving strategies.
Lifestyle Audits. A thing of the past?
The word “audit” is enough to raise anyone’s blood pressure. If the IRS agent then tells you they want to see bank accounts and personal records you may need a heart monitor. Should this happen to you, you could be in a process known as a lifestyle audit.
The lifestyle audit was a tool used by auditor’s to ascertain if the income you claim on your tax return can support how you live.
Kids Summer Jobs... Good for IRA / Roth IRA
If your children have earnings from summer or after-school jobs, encourage them to open IRA accounts.
Sitting on a piece of investment property that you would like to sell? By structuring the transaction as a tax-deferred exchange, you can delay paying taxes on the full amount of the gain realized.
Also known as a "like-kind exchange" or a "1031 exchange," these transactions are only available for investment or business assets.
Many mutual fund companies allow you to switch funds without a penalty or commission, as long as you stay within their family of funds. There's a catch though.
Understanding Tax Terms: Depreciation Recapture
One of the more unpleasant surprises that can hit a taxpayer occurs when you sell personal property, rental property or assets from your small business. This tax surprise is often associated with depreciation recapture rules.
Depreciation recapture refers to reducing the cost of an asset sold by prior period’s depreciation expense to determine whether taxes are owed on the sale of an asset and to determine the type of tax that must be paid on the sale of the asset.
