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Tax Planning

The Certified Public Accountants of Summit Accounting Group, Inc. understand that tax ramifications are a major consideration in virtually every financial decision.  Therefore, tax planning is an on-going process.  

Call us today to discuss your Tax Planning needs.

Read about the Roth IRA 

Tax Planning Strategies:

  1. Beginning in 2010, the Tax Increase Prevention and Reconciliation Act of 2005 allows Roth IRA conversions with no modified Adjusted Gross Income limitations.  Previous law limited Roth IRA conversions to those taxpayers with modified AGI below $100,000.  The tax due will be able to be spread over two years.  This implicitly negates the income limits on Roth IRA payins (currently Roth's are only allowed for MFJ taxpayers with AGI less than $169,000).  MFJ taxpayers with AGI's above $105,000 can make nondeductible payins to IRAs between now and 2010 and then convert the accounts to Roth IRAs in 2010.  They are taxed only on the preconversion earnings, and the tax is spread over two years. 
  2. Tax-Free IRA Distributions to Charity – Eligible individuals may make tax-free withdrawals from their IRA to make charitable donations.  These distributions will also satisfy the Required Minimum Distribution rules.  While a charitable deduction is not allowed for these gifts, the net effect is to not increase a taxpayer’s AGI, which will reduce the phase-out of itemized deductions for higher income taxpayers and potentially make taxpayers eligible for other tax benefits.  This will also benefit those taxpayers who use the standard deduction rather than itemizing, while also allowing taxpayers limited by the charitable contribution deduction limits to receive a tax benefit for their gifts.  Distributions are limited to $100,000, and are only available for taxpayers age 70½ or older.  Only public charities are eligible donees, although supporting organizations and donor advised funds are excluded for this purpose.  (Note: This was first allowed in 2006.  Verify that it's still allowed under tax law by consulting with your tax professional prior to completing a transfer.) 
  3. More to Come! 

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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