A 529 is a plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save for college and other post-secondary training for a designated beneficiary, such as a child or grandchild. Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. Contributions to a 529 plan, however, are not deductible.
The trustee must adhere to the trust provisions and the Uniform Trust Code when evaluating investments, distributions, as well as the termination of the trust.
Diversification provides performance while also reducing unsystematic risk. There are two types of investment strategies which are used to provide this diversification: the Prudent Investor Rule or Legal List.
State Tax Rates – Highest and Lowest – The Best and Worst Places to Live in the United States for Income TaxesPosted February 8th, 2014 by George Mentz JD, MBA, CWM, MFP - International Lawyer and Award Winning Author
According to the Federation of Tax Advisors, these 10 states have the highest tax rates on income. These states may have variations of tax treatment for exemptions, credits, retirement, government pensions and varying definition of taxable income. Open to see the 2013 list of worst states to retire or do business.
Same-Sex Married Couples Jointly and Severally Liable for Tax Deficiency and Potentially Innocent Spouse ReliefPosted February 5th, 2014 by Prof. William Byrnes
It appears that same-sex couples that file joint returns are now jointly and severally liable for any deficiency that may be assessed, and by the same token the spouse of the marriage may be eligible to claim innocent spouse relief against a tax liability.
With 2013 having a solid stock market comeback, we all wonder what the stock market will do in 2014. Presently, we just had the worst January in 5 years in the stock market. Does this mean that the big investors will begin to move to the sidelines? Who knows.
Recently the IRS responded to an inquiry by Senator Chuck Schumer (info. 2010-0080) regarding a constituent’s inquiry whether the cost of an “herb” prescribed by her doctor to treat migraine headaches qualifies as a health care expense in her flexible spending account.[xi] The response concluded that an “herb” may be an expense if the taxpayer can substantiate he or she:
Tax Whistleblowers – $104 Million IRS Award to Mr. Birkenfeld (UBS) Yet Nothing for Mr. Insinga (RABO)?Posted January 31st, 2014 by Prof. William Byrnes
Since its creation, the IRS Whistleblower Office has received over 1,300 tips. However, before pursuing tips analysts must first determine that a federal tax issue is involved and not based merely on speculation or conjecture. The majority of the tips come from employees or former employees of companies that do not necessarily adhere to federal tax laws. Tips deemed credible may lead to three different avenues, such as (1) a new audit, (2) expansion of a current audit, or (3) criminal investigation.
Tax and financial advisors will now have a new tool for helping individuals and small businesses navigate today’s toughest tax questions….
Tax preparer fraud has become more paramount with taxpayers choosing to have their federal tax returns prepared by paid return providers. When unadvised and vulnerable taxpayers choose unqualified and unscrupulous preparers, they potentially face IRS penalties for filing false returns.