Our Top 10 Personal Tax Tips

Every year, Congress makes changes in the tax laws, so it’s wise to consider how your tax planning will be affected. Here are our Top 10 individual tax planning tips for this year.

  1. The Tax Advantages of Remaining Unmarried. Because of the ongoing same-sex marriage debate, the tax ramifications of marriage have recently been much discussed. Not all tax rules that apply uniquely to married persons are more favorable than those that apply to single persons.
  2. Tax Treatment of Legal Fees. Generally, legal expenses are non-deductible personal expenses. However, there are 7 specific instances in which deductions for legal expenses paid by an individual may be permitted.
  3. All Income Is Taxable Unless…While it is true that most everything of value received by an individual must be reported as income for federal income tax purposes, there are more than two-dozen specific exclusions.
  4. Earn College Credits and Tax Credits at the Same Time. The Hope Scholarship Credit, Lifetime Learning Credit, and other key considerations need not be a mystery.
  5. Application Of “Intermediate Sanctions” To Certain Not-For-Profit Organizations. IRS regulations governing intermediate sanctions in the non-profit field impose monetary penalties when “excess benefit transactions” with a “disqualified person” occur.
  6. Sharing Your Stock Market Losses With Uncle Sam. If you’ve lost money in the stock market, you should be aware of the tax breaks that capital losses can generate and how to avoid the tricky Wash Sale trap.
  7. To Roth or Not To Roth? That is the IRA Question! For many taxpayers, the Roth IRA is one of the best tax-advantaged retirement plans around. Are you eligible to harvest the grapes of Roth? Is a Roth IRA or a traditional IRA right for you?
  8. Two-year Requirement for Excluding Gain on Sale of Your Principal Residence. How do you measure periods of occupancy for the two-year-out-of-five test when you have two homes and live in both during the testing period? Much more is involved than simply counting nights.
  9. Partial Exclusion of Gain – Early Sale of Residence. Can you exclude any part of the gain from sale of your principal residence if you don’t live in it for at least two years? Yes, and here is a summary of special rules that apply to shortened periods of occupancy.
  10. Lump Sum Rollovers Gaining Momentum. If you’re leaving your job, you should be aware of the growing trend of rolling over your retirement savings to a new plan.