What is average tax rate? What is effective tax rate? Which matters most when it comes to making investments? I recently received an email from “S”. He is a friendly reader asking about how his effective tax rate might impact the investments he was considering. Here’s what he wrote: I am trying to figure out […]
Tax Strategies
A big part of accumulating wealth is to make sure you don’t give it away needlessly. There are a number of provisions in the tax code to help you grow your wealth and reduce tax payments and penalties. These are not complicated. They are not hard to understand or take advantage of. But they are important.
In this category I’ll explain the most important tactics you can utilize to minimize your tax so you can put as much as possible towards building your own future.
Roth IRA Recharacterization – What Your CPA Doesn’t Know
Even if you consult your financial advisor or CPA, she might not have all the answers when it comes to a Roth IRA re-characterization. That’s understandable. The world of IRA restrictions is vast. But if you have a clear understanding of this issue, you might be able to make some extremely helpful financial moves. What […]
What Is a Donor Advised Fund?
If you are thinking about making charitable contributions this year, you’ll want a good answer to the question “What is a donor advised fund?” That’s because such funds can save you time and possibly a great deal of money. They allow you to take one appreciated asset and get a full tax deduction for its […]
Letter from the IRS – What You Should Do
Getting a letter from the IRS is almost never a pleasant experience. Even though I run a pretty tight ship when it comes to my tax return and I do everything possible to avoid a run-in with the tax police, I’ll admit that I get a little nervous when I see that the Treasury department […]
How to Pay the IRS with a Credit Card for Free
You know that Uncle Sam is expecting your tax payment shortly. And if you want to make that payment by using your credit card, you can actually do so free of charge and avoid IRS trouble. If you’re lucky, you might even be able to scoop up some airline miles for yourself too. Have I […]
What Is Tax Deferral?
What is tax deferral and is it a good thing? The definition is very straightforward. Tax deferral is simply a legally acceptable way of putting off paying taxes. That’s the easy part. What makes tax deferral so darn powerful? You invest to get a return on your money – to make a profit. Sometimes the […]