Taxes

Curbing Taxes on Inheritances

Inheriting appreciated assets from your deceased spouse can bring a host of financial complications at the time of life when you already have too much on your mind. Here’s the math to know how to be prepared – and maybe save on taxes.

Estate Planning: The Heirs

The murkiest part of estate planning is to discuss when and how to distribute your assets to your heirs. This process requires a series of considerations and trade-offs to avoid emotion-laden family problems.

Up to now in our series of articles we focused on numbers, which are objective and straightforward. But when it comes to this final set of issues, things get gray because emotional factors drive decisions now. There is no correct answer on how to distribute your estate.

Estate Planning: Dividing It

When you die, who gets your money? Your kids, you’d think. But before the money reaches your heirs, the government and creditors take their share first.

Now that you know the estimated amount you have to give, most of the math is over. The rest of the calculations have to do with who gets what proportion of your assets.

Payroll Tax Rules for Family

Family businesses often employ parents, children or grandchildren. If your business does, employees from your family might warrant tax exemptions that can save you big.

“One of the advantages of operating your own business is hiring family members,” claims the Internal Revenue Service. “However, employment tax requirements for family employees may vary from those that apply to other employees.”

Estate Planning: Your Worth

The decisions you make now about where your assets go after your death can affect people’s lives profoundly. This three-part article walks you through some of the basic issues involved with estate planning. This initial part is figuring out how much your estate is worth.

Most people avoid thinking about, let alone planning for, their death. And yet making arrangements can be a liberating experience. Relieving your families of the burden of having to do it for you is also a demonstration of consideration, kindness and love.

How Alibaba Can Help Yahoo

The pending stock sale of Alibaba is good news for long-suffering Web portal Yahoo, which owns about a quarter of the Chinese e-commerce giant. But this could trigger a huge tax bill for Yahoo. How can it offset that? By using a tax maneuver involving floating new debt, John Malone-style.

Stopping Tax-Related ID Theft

Identity theft is rampant. You can become a victim not only after carelessly using passwords and your personal information but also if you’re in the wrong electronic place at the wrong time, such during Target stores’ data breach last holiday season. You have little information more sensitive than that you write – and sometimes send electronically – on your tax return.

Best Retiree Cities, Financially

You’ve probably seen dozens of lists of places to retire in, but they seldom focus on financial factors, which are important when you live off your savings.

Due to warm weather, beaches and the absence of a state income tax, locations in Florida are heavily over-represented on most such lists – I even included one here. But I took the liberty of assuming that not everyone wants to live out their golden years in the Sunshine State, and broadened the list to cover the country.

Overpaying Income Tax?

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.

Mechanics of 401(k)s (Pt. 3)

Yes, you can tap your 401(k) for a loan even before your legal withdrawal age, although turning elsewhere to borrow is usually a better idea. You should know the rules and pitfalls built into 401(k) lending. They are many.

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