News & Blog
The tax landscape is constantly changing. Check here for our latest tips and insights as well as news from the Cut Your Tax family.
If you own a single member LLC and owe personal back taxes, there are certain ways the IRS can and cannot leverage your business assets to secure the money.
Since IRAs have become a popular retirement tool, it was only a matter of time before inherited IRAs become a common place. When the owner of an IRA passes away, the named beneficiary inherits the account. Inherited IRAs have restrictions and rules separate from other IRAs. For instance, only spouses can roll IRAs into an existing IRA account. Others will need to keep the account separate, and name it accordingly. The Boston Globe recently covered this nicely in “What to do if you inherit an IRA.”
If you're in or near retirement, chances are you've already heard that you can use Roth IRA income as a key tool in funding your retirement. That’s because, while money going into a Roth IRA is taxed, all earnings are tax-free, as long as you wait until you are 59 ½ or older to start withdrawing it. If you already have a Roth IRA that you’ve been funding for several years, you’re in a great position to reap the rewards. But it's important to make note of recent 2011 tax laws that affect how you fund and then spend Roth IRA income. Here are a few of the most important ones.
Death and taxes. As both an estate planning and tax law firm, we deal with the two inevitabilities every single day. While neither can be avoided, the burdens they place on you and your family can be greatly reduced. As we head into tax day, please watch for the following smart facts and fast chuckles that we’ll be sharing on Facebook and Twitter. » Continue Reading
The more money you have, the better chance you have at being audited. Only about 1 percent of all tax-paying individuals are scrutinized with an IRS tax audit in any given year. However, if your income is $1 million or more, your chance of an IRS tax audit dramatically increases, to about 8 percent. Kiplinger recently put that number into perspective: according to the publication, it accounts for about one out of every 12 returns.
Do you owe back taxes? Take advantage of a little extra mercy that the IRS is extending in the coming months. According to Kiplinger's, the IRS has announced that it will be raising its federal tax lien threshold from $5,000 to $10,000 in unpaid back taxes. And, according to a statement by the government agency, the IRS is modifying its procedures regarding lien withdrawals. Liens will now be withdrawn once full payment of taxes is made, if the taxpayer requests it. In order to speed the withdrawal process, the IRS will also streamline its internal procedures to allow collection personnel to withdraw the liens once back taxes are paid.
For business owners and self-employed individuals, you still may have opportunities to save on your 2010 tax bill. If you run a calendar-year business, March 15 is among your most important remaining tax dates.
With the estate tax once again resurrected on both federal and Illinois levels, completely new estate tax strategies are taking shape. Married couples with a taxable estate have a distinct advantage with the current estate tax law in place, but only if certain criteria are met. If you have a married living trust, don't skip your yearly estate plan review with your attorney. Revising your living trust could be the key to brilliantly executed estate tax strategies. Here's one reason:
Many Illinois residents have been left scratching their heads after the legislature last month raised the income tax to a historically high level, in order to offset the state's reportedly $15 billion budget deficit. One of the more helpful pieces of advice on the tax hike comes from Francine Knowles of the Chicago Sun-Times in an article on the “Give and take of taxes.” As the article points out, here are the basic facts regarding the Illinois income tax situation:
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With so many changes in the estate tax laws lately, it's difficult to determine whether you have a taxable estate or not. Even tax advisors and estate planning attorneys have been scrambling to make sense of the situation and how current laws affect their clients. Your estate includes everything you own: your home, investments, life insurance policy, physical possessions and more. Once you add up these assets, you may be surprised at how large your estate actually is. To truly determine whether or not you have a taxable estate, consider the following factors.