#1 Estate Taxes

I made this item of taxation #1 because it is the most egregious.  Monies that have been previously taxed during the lifetime of the decedent  are taxed yet again. There is some history behind this tax that has to do with the attempt to break up the huge family empires of the early 20th century.…

#2 Passive Activity Rules

Almost 30 years ago the passive activity rules were created.  It includes things like rental income and losses, income and losses from businesses in which you do not materially participate and income and losses from ventures in which you are not at risk. There are exceptions to the rules such as for real estate professionals…

#3 Automobile Mileage Deductions

The mileage deductions set forth by the Internal Revenue Service are published each year.  The 2014 rates are shown below.  There is a rate for: Business                 56    cents per mile Medical Trips          23.5 cents per mile Charity                    14    cents per mile   In 2015 the rates are: Business                      57.5 cents per mile Medical Trips               23    cents per mile…

#4 Entertainment Deductions

There are three kinds of entertainment deductions, those that are not deductible, those that are 50% deductible and those that are 100%.  Navigating the rules surrounding these different types of deductions can be mind numbing and requires the assistance of your CPA. Generally speaking 50% meals and drinks are deductible.  This rule was enacted in…

# 7 SCREWY TAX – THE ALTERNATIVE MINIMUM TAX

You can rally get shafted despite all your tax planning by the infamous ALTERNATIVE MINIMUM TAX or AMT. Individuals with a higher income may be subject to the Alternative Minimum Tax. Under the tax law, certain tax benefits can significantly reduce a taxpayer’s regular tax amount. The AMT sets a limit on those benefits. If…

#8 CAPITAL LOSSES

In December 2010 The Sarasota Herald Tribune published my version of the top 10 Screwiest Tax Provisions.  We have been updating that list here:  Screwy income tax provision – #8  Tax Planning: Deducting Capital Losses The annual capital-loss limitation is $3,000. This one has been around for a long time and  never made any sense. You…

#9 MEDICAL DEDUCTION TIPS

In December 2010 The Sarasota Herald Tribune published my version of the top 10 Screwiest Tax Provisions.  Over the next ten weeks I am going to update that list here:  Screwy income tax provision – #9  Tax Planning: Medical Deductions: The 7.5 percent medical deduction limit: The medical deduction has been limited to the excess…

#10 IRA Required Minimum Distribution Rules

List of screwy income tax provisions – #10  IRA Distribution Alert!  Required Minimum Distribution or “RMD rules” If you turned 70 1/2 this year and have funds in either one IRA or several IRA accounts you need to spend some time studying this really screwy but deadly tax provision. Required Minimum Distributions (RMDs) generally are…