Tax planning strategies for older taxpayers

Article Abstract:

Elderly Americans should pay close attention to the tax rules that apply to them to be able to take advantage of tax breaks and reduce their tax liability. Among the tax issues that they should be familiar with is the taxation of Social Security benefits. This requires careful planning because up to 85% of such benefits are potentially taxable under Sec. 86(c)(2). Retirement benefits are also an important part of tax planning for the senior citizens. These benefits are taxed based on the type of retirement plan, the date of the first payment, the age of the retiree and the taxpayer's contributions to the plan. Other important tax planning issues are the taxation of the sale of residence, the deductibility of medical expenses, filing status and thresholds, and exemption and standard deduction amounts.

Aged, Elderly, Methods, Planning, House selling, Home selling, Tax planning, Tax deductions, Retirement benefits, Social security beneficiaries, Social security taxes

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Estate planning strategies continue to provide tax savings after TRA '86

Article Abstract:

Pre- and post-mortem estate planning techniques that can minimize tax liabilities in light of the Tax Reform Act of 1986 are discussed. A significant amount of planning should be done immediately before the death of a taxpayer and in the first year following the taxpayer's death. Wills or revocable trusts should be reviewed prior to the taxpayer's death. The date of the taxpayer's death is the end of the decedent's final taxable year. The decisions that need to be made by the fiduciary representing the estate include the selection of the fiscal year of the estate and the treatment of administration expenses on the estate.

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Later actions can result in loss of special-use valuation benefits

Article Abstract:

Special use valuations of an estate can lower estate taxes. Those tax savings may be recaptured by the government at a later time in certain cases. Disposing of the property or failing to use the property according to its intended purpose are examples. The tax planning steps that can prevent tax recapture from being imposed are discussed.

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