Reduction Strategies

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Investing to Cut Taxes

Submitted by Ken Weingarten on Wednesday, October 22, 2014 - 12:00pm

After the headline risks of the market and inflation, taxes present the biggest obstacle to your building wealth. Your best investment strategy seeks to not only generate returns on your capital but also to save as much of your money as possible to keep it working for you. One of the surest ways to preserve your capital: Reduce your taxes on investment income and gains.

Here are some strategies.

A Simple Way to Shrink Taxes

Submitted by Nathan Sonnenberg on Wednesday, September 3, 2014 - 9:00am

After tax season, when they realize exactly how much tax they paid at home, a number of my friends, colleagues and clients asked me what they should do to reduce their taxes next year. While I’m not a tax professional, I certainly pay attention to tax rules and rates regarding investing.

My short answer to their question was – create a portfolio of low-fee, thoughtfully constructed stock index mutual funds or exchange-traded funds. Yet not all of them do the job for you. Here’s how to find the right one.

Why Millennials Need Roth IRAs

Submitted by Grant Webster on Monday, August 18, 2014 - 12:00pm

If 20-somethings ask me what to do to get ahead financially, I have a laundry list: create a budget, start investing now, be smart about your taxes and so on. If I absolutely have to narrow it down to one thing, I’d say, open up a Roth individual retirement account.

Saving on Gift Taxes

Submitted by Lewis J. Walker on Tuesday, September 9, 2014 - 3:00pm

Tax strategies are key elements of financial planning. When sharing your fortune with someone else, no matter how you accumulate it, you should understand the tax implications so that your good intentions don’t come back to bite you.

Overpaying Income Tax?

Submitted by Jim Blankenship on Thursday, July 17, 2014 - 3:00pm

If you start a job in the middle of the year, chances are you will be over-taxed. You get a refund, but it’s not an inefficient use of your money. To prevent this problem altogether, use something called the part-year withholding method.

When you get a job, you file the W-4 form, aka the employee’s withholding allowance certificate, with the new employer. This form instructs the employer how much tax to withhold for the Internal Revenue Service from each of your paychecks.

Capital Gains: More Complex

Submitted by David John Marotta on Wednesday, July 2, 2014 - 12:00pm

How you deal with the new capital gains rates hinges on your tax bracket. Strategies to deal with capital gains differ for each level – part of their new complexity starting last year.

When you sell certain assets, such as stocks and bonds, you may incur capital gains. A capital asset also includes most property you own and use for personal or investment purposes. If the original purchase price of the asset plus associated expenses (the cost basis) is less than the proceeds you receive from the sale, you incur a capital gain.

Under-Used College Savings

Submitted by Joseph A. Clark on Tuesday, July 1, 2014 - 12:00pm

Some good news on the college cost front: More parents with college-bound kids are saving for education, some 51%, a recovery from the recession. Trouble is, most of those parents aren’t putting away money the best way. A terrific savings vehicle, called a 529 plan, exists for that purpose, but people don’t use it nearly enough.

Mechanics of 401(k)s (Pt. 1)

Submitted by Jim Blankenship on Monday, June 30, 2014 - 3:00pm

Many folks have a retirement plan, such as a 401(k), available from their employers. It is a relatively straightforward savings vehicle, but can still be very confusing if you don’t know what exactly is under the hood.

When you sign up for your company’s retirement plan, there are a few things you need to decide. Examine the mechanism carefully, because your livelihood in retirement depends on these decisions you make now.

Here are some questions you may encounter when you start a 401(k) plan:

10 Tax Tips for Farmers

Submitted by Scott Keen on Monday, June 23, 2014 - 3:00pm

There ain’t much an old country boy or girl like you can’t hack – except for a hefty tax bill. Crop problems, hired hands, pregnant livestock and busted tractors all complicate your return. Fortunately, the Internal Revenue Service offers numerous benefits if you own a plantation, ranch, range or orchard to raise livestock, poultry or fish or grow fruits or vegetables.

Here are 10 tips for farmers’ tax returns:

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