Posts Tagged "tax liability"

Check your 2012 withholding

Posted on Jul 31, 2012

Withholding too much tax from your wages isn’t a smart financial move. Match your withholding as closely as possible to your actual tax liability for the year, and invest the extra money for yourself, not the...

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Should you undo a Roth to save taxes?

Posted on Oct 18, 2011

Yes, 2010 was the year of the Roth, and you may have converted your traditional IRA to take advantage of the one-time option to postpone recognizing the income. As you know, half of the related tax bill will be due with your 2011 tax return.  End of story? Not exactly. You can still take advantage of a planning window that may save you money. Under the rules, you have until October 17, 2011, to change your mind about the original conversion.  The tax term for the “do-over” election is recharacterization. It works like this: Say the value of the assets you converted to a Roth during 2010 has declined. That means if you had waited until now to convert, you would have ended up paying less tax. Reversing your 2010 decision puts you back in the position you were in before the Roth conversion and wipes out your original tax liability.  Even better, you can still do another traditional-to-Roth IRA conversion after recharacterizing. While the option of splitting the income over future years is no longer available, you can achieve the same effect by reconverting over a multi-year period. Just be aware that time restrictions may apply on this strategy. For details or assistance, give us a...

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The Entitlement Dilemma: Some interesting numbers

Posted on Oct 31, 2010

* According to the Census Bureau, nearly half of Americans live in a household in which someone receives government benefits. * 45% of U.S. households pay no income tax, up from 39% five years ago. Half of those don’t earn enough to pay income tax, and the rest use credits and deductions that eliminate their tax liability. Most of these households still pay social security and Medicare payroll taxes. * 13% of all U.S. households pay neither income tax nor payroll taxes. * An estimated 47.4 million people are covered by Medicare today. Projections indicate that by 2030, that number will grow to 80.4...

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