Tuesday, October 19, 2010 Houston Estate Tax Attorney Reveals Do-It-Now Tax Moves, And More
By Kim Hegwood: Houston Estate Tax Attorney
Since so many tax issues are up in the air right now, as a Houston estate tax attorney, I believe you should organize your tax moves into three categories: those you should do now, those you can decide last-minute in December, and Roth conversions.
If you have "income flexibility" in any way, your list should include:
"Do-it-Now" Moves from a Houston Estate Tax Attorney
* Make a maximum contribution to your 401(k), which is $16,500, or $22,000 if you are 50 or older this year.
* Sell taxable bonds now and pay the capital gains tax at 15% rather than a much higher rate in 2011.
* Make gifts of the annual exclusion amount.
"Do It Soon" Moves from a Houston Estate Tax Attorney
* Prepare to give away large sums of money late in December. This year the gift tax is only 35% and there is no "Generation-Skipping" inheritance tax. However, you don't want to make taxable gifts now just in case Congress reinstates the GST tax retroactively.
* Identify possible charitable contributions for deductions purposes. If taxes go up next year, you will want to defer these deductions.
* Accelerate your income if possible. If it looks like taxes rates will rise, you will want to take in as much as possible in 2010 rather than 2011.
The Roth Do-Undo
This year, taxpayers can convert regular IRAs into Roth IRAs. There are many considerations in this decision, so do give us a call about it, if you are considering it (281-218-0880).
Good news: If you convert now, you have until October of 2011 to undo the conversion or decide whether to pay taxes in 2010 or 2011 and 2012.
After all, with Congress putting so many key tax decisions off, this kind 20-20 hindsight could come in handy.
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