Canada’s retirement programs OAS and CPP have a much better setup than Social Security in the US.
Social Security Family Benefits Mess
Most of people think of Social Security as a government managed savings program similar to a 401k plan: you pay into the system when you are working; you draw from the system when you retire. More informed people will point out it isn’t so. It’s a pay-as-you-go inter-generation transfer program. The money you (and your […]
Claiming Parent As Dependent On Tax Return
Reader Bill asked me if it’s possible to list his parents as dependents on his tax return. Bill’s parents are foreign citizens. They came to visit him and lived with him for eight months last year. We are all familiar with children as dependents. Can parents also be dependents for tax purposes? I consulted my […]
How To Donate Or Gift Shares to Charity Or Family Member
You probably heard donating appreciated stocks or mutual fund shares to a charity is more cost effective than donating cash. The charity gets the shares. You get a tax deduction for the full value (if you itemize) and you avoid paying capital gains tax. You can also gift appreciated shares to a family member who […]
Three Tax Cuts That Are Not Extended
Although the Bush tax cuts were extended for another two years, some tax incentives were not extended because they weren’t part of the Bush tax cuts. They fall into the one-time stimulus category. Residential Energy Tax Credit The Residential Energy Property Credit provides a 30% tax credit of up to $1,500 over a two-year period […]
Do You Cheat On Your Taxes?
Do you cheat on your taxes? Before you automatically answer no, hold that thought. Does your state have a sales tax? According to Wikipedia, only five states don’t have a sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. There is a sales tax everywhere else. For purchases from an out-of-state store that does not […]
1099 Filing Requirement in Health Care Reform Law
I read on FatWallet that a hidden gem in the new health care reform law will require a business to issue a 1099 Form to all vendors starting in 2012 if the business purchases $600 or more in goods or services in a year from that vendor. Currently a business is only required to issue […]
The Best Tax Book
I can tell it’s tax time. Most of the questions posted to my old posts are about taxes. I’m not a CPA; I write about taxes only to the extent they affect me. The best way to get tax questions answered is of course asking a real CPA. I realize not everybody can afford a […]
3.8% Medicare Tax on Unearned Income in Health Care Reform Bill
Reader Chuck asked about the 3.8% Medicare tax in the health care reform law. "Does the 3.8% tax on unearned income kick in all at once? You could be looking at an infinity percent marginal rate if you have, say $199,999 in wage income, and $50,000 in capital gains if one extra dollar of income […]
Health Care Reform: What’s In It for Me?
I admit I did not get myself emotionally attached to the health care reform one way or the other when it was being debated in Congress. I keep myself loosely informed from reading my friend Austin Frakt’s blog The Incidental Economist. Now that the final legislation is passed, everybody inevitably asks “What’s in it for […]
Refundable and Non-Refundable Tax Credit in Charts
This article explains the difference between refundable and non-refundable tax credits with illustrative charts.
The Origin of Solo 401k
Solo 401k was made possible when employee’s contributions didn’t have to be counted in the maximum tax deduction by the employer.