Cash Flow Planning for Life

This is the second installment of Tax Deductions & You: What You Need to Know which can also be downloaded from our free eBook library.

Any loans that fall under the nondeductible category need to be reviewed along with your cash or equity availability. If possible, they also need to be re-characterized to a deductible form of interest.

An example of this would be having availability on a home equity loan (balance after transfer must be below $100,000) and paying off an auto loan or credit card. This will increase cash flow two fold:

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If you buy your parents’ home and rent it back to them…

…you can create a nice tax break.

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2009′s estate tax rate was 45%, and…

the 2009′s highest income tax rate was 35%, so:

If your estate was larger than the 2009 exemption amount of $3.5 million you may have been able to save 10% in estate taxes by converting to a Roth IRA.

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If you’re a 401(k) plan owner, be sure to…

…review your 401(k) plan(s), because some will allow distributions while you are still employed.

You can convert a distribution directly from a 401(k) into a Roth IRA, be sure not to overlook this option.

If you have any questions, comments or concerns about Roth IRA’s, or think I can help you in any other ways, contact me, or give me a call at (239) 384-9688.

- Mark

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This information is based on facts, assumptions and representations as stated and authorities that are subject to change.  We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER:  The information within this post is for informational and educational purposes only and is not tax advice and should not be used as such.  The facts of each individual situation can have significantly different outcomes when applying tax law.  The hiring of a CPA is an important decision not to be based solely on advertisements.

No matter how many IRAs you own…

the IRS views them as one pool of assets for tax purposes.

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Having options is the key to making the right decision at the right time.

Creating “Roth assets” today, by conversion or yearly contributions, will provide you options in retirement.

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Did you know?

You are not required to convert your traditional IRA(s), SEP(s) and SIMPLE(s) into one Roth IRA.

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I work with a number of business owners who, over the years, have learned tax planning CANNOT be done effectively in February, two months after most year-ends.

This is part 2 in my 7 part series “7 Things Every Small Business Owner Needs To Know”.  You can download this entire series in my eBook on my web site – www.Makara-Assoc.com.

Tax planning is a year round activity.

Questions such as:

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I just received this update this morning, and this begins to clarify the 2010 Estate Tax…

Be sure to check out the full article on the Wall Street Journal!

If you have any questions, feel free to contact me, call me at (239) 384-9688, or visit my web site at: www.Makara-Assoc.com.

-Mark

——-

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.