WHAT IS TAX PLANNING ?
Tax planning is an essential part of your financial planning. Efficient tax planning enables you to reduce your tax liability to the minimum. This is done by legitimately taking advantage of all tax exemptions, deductions rebates and allowances while ensuring that your investments are in line with your long term goals. Tax-planning amounts to making investments or contributions in line with prescribed guidelines that lead to reduction in tax liability. Simply put, the tax liability is computed as a percentage of the income. As per prevailing tax laws, certain investments and contributions have been earmarked for claiming tax benefits. When these investments and/or contributions are made, the same are reduced from the
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Currently there is 5 year fixed deposit which provides you the tax benefit. Currently the maturity amount is tax free. This instrument provides you the benefit of tax saving and guaranteed return. FD is not preferable by financial planner due to less return compare to ELSS and long maturity term.
5. LOANS = Currently in India there are two loans, Home loans and Education loans, which have Tax exemption. Many people invest in house so that they can claim exemption. One should understand that under section 80cc only principle repayment can be exempt. Tax deduction on the interest component comes under section 24 and will depend upon whether home is rented or self occupied. You should keep in mind that over a period of time the principle payment increase and the interest payment decrease. Under education loans, the interest that you pay will be tax deductable.
6. PPF & NSC= People who don't want to take risk they can invest their small savings in PPF. It gives you guaranteed return but it has lock in period of 15 years. You can withdraw some part after 6 years. One can look at this option as their Pension planning. PPF normally gives you the 7.5% to 8% (subject to change) return but don't forget that it gives you the benefit of compounding rate. NSC stands for National Saving certificate. This one also assures you the guaranteed return. Most of us are not aware of the Volunteer Providend fund.
Now that we have converted the sole proprietorship to a s-corporation, the tax planning and strategic planning must be the next topic to address. Since Mr. Jones does not have a spouse, he must consider Mandy as the heir to business and his estate. The Current value of his estate is 53 million dollars. He currently wants his daughter to control 40% of the business and be employed by the business. This memo will discuss the following topics: tax planning, strategic planning, estate planning, transfer of assets and selling the business.
The pool cost the petitioner over $19,000, and we cannot accept his contention that such amount was spent primarily for therapy for his leg in view of the limited need for such therapy and the alternatives which were then available.
6. How does the Privacy Act differ from FOIA, and when would a taxpayer request information under the Privacy Act rather than under FOIA?
Under 26 USC § 121, gains on the sale for married taxpayers filing jointly would be excluded up to $500,000 (or $250,000 each for married filing separately) given the residence was owned and occupied as a principal residence for two out of the last five years.
Conclusion: With standard deduction, the taxable income of first two years will respectively be $8,140 and $7,417. Consequently, the tax savings will be $5,454 and $4,969. If it is with itemized deduction, the taxable income will be $9,073 and $8,295 and the corresponding tax savings will be $6,079 and $5,558.
You should consider an account-based pension. This will provide you with the flexibility to withdraw funds.
Note: If you have been contributing to an IRA, be sure not to withdraw the money early or your taxable income goes up.
■ The 401k and deposit certificate are not good investments because of the low return and the high taxes that apply to those investments
When the United States Tax Code is reviewed, this definition is accurate in each of the four definition categories. It definitely is a systematic, albeit overly burdensome statement of a body of law. It is without a doubt a system of principles of rules and it does have signals or symbols for communication such as: Title (number), Subtitle (letter), Chapter (number) Subchapter (letter), Part (Roman numeral), a multitude of §§ (numbers) (Legal, 2015). To many taxpayers definition four may also relate to the Tax Code because it can appear to hold secret meanings because comprehension is difficult. In fact, according to the Taxpayer Advocate Service (2012) report to Congress, the most serious problems taxpayers must endure in relation of the Tax Code are that it: a) makes compliance difficult and requires an inordinate amount of time preparing their returns for filing; b) burdens the majority of taxpayers with an expense for compliance through the need to hire professional preparers or for specialized tax preparation software; c) Shrouds comprehension so that taxpayers are uncertain how their taxes are calculated and what their tax rate is; d) Fosters
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With the ever-increasing complexity of the United States tax code, it has become more important than ever for companies to understand and implement possible tax benefits for the company and its employees. One major benefit that applies to both is employer-provided meals. Employer-provided meals have become a major topic due to their double-sided benefits. These are both tax beneficial to employers, as the meals can be deducted by the business as an expense on its federal income tax return, which reduces the business’ tax liability. Concurrently, the benefit of the provided meal is excluded from the taxable gross income of the employee, providing the employee with a tax-free benefit. After fully understanding the laws related to employer-provided meals, a business could begin thinking about implementation of the benefit.
If you prepare your own taxes, what software do you use? How long does it take you?
The land in Stratford is being actively traded, rather than being held for income producing
It is fair to assume that “Bill” (our working name of the widower) has a steady job and therefore steady income (no welfare). This is because otherwise he wouldn’t need insurance, he is already in deep trouble! Bill has two kids that in the next 10 years are both going to (likely) go to College. For that reason, the risk of (his) life loss and the kid’s exposure to financial hardship, life insurance products would be my only focus, i.e. I assume that auto and property insurance are already in place.
Prior to the ratification of the Sixteenth Amendment of the American Constitution, the majority of the income received by the federal government was through tariffs and excise taxation (Pollack, 2013). Tariffs are taxes “levied by governments on the value including freight and insurance of imported products (Tariffs and Import Fees, 2014)”. Excise taxes are “taxes paid when purchases are made on a specific good, such as gasoline (Excise Tax, 2014).” While the individual citizen did not incur wage taxation, through trickle-down economics, consumers often dealt with higher costs of goods as importers sought to recoup