Tax Management Made Easy - Accountants For Contractors

The global economy has been in economic turmoil in the last few years, and many large companies have been

cutting down their operations from all sides. The hardest pinch is felt by the human resource that is laid off in the process. The companies also feel the damage as a void is

left behind the loss of qualified personnel that used to be a part of their machinery.

The problem comes when they have to deal with the taxes they have to pay to the government at the end of the year. The laws completely transform for them when

they step into this dominion. They need to have professional Accountants for contractors to show them

the right way.

Even though property taxes have skyrocketed along with property values, fewer and fewer taxpayers itemize their deductions. This means that for many taxpayers, income

taxes are the same with or without deductions. Taxpayers with IRA distributions have to calculate the

taxes due on IRA distributions dedicated to the payment of property taxes. Consider several middle class couples

age 65 living in Minnesota. Each is retired from a job that has provided a pension. Assume each has nearly

identical circumstances with combined Social Security benefits and pensions of $30,000 each for total cash flow income of $60,000 and file taxes as married filing jointly.

The only difference in their

circumstances is the property taxes of the mortgage free homes in which they live of $1,900, $3,800, $5,600 and $7,400. All other itemized deductions are the same and

are not enough to exceed the standard deduction for their age and filing status. Without an IRA distribution

and after the standard deduction and exemptions, each would pay federal taxes of $1,595 and Minnesota taxes

of $827. Each couple is squarely in the middle of the 15% tax bracket.

They have found out that they can concentrate on their specialization and do contracts according to their core skills. This allows them to make their personal skills to grow to a whole new level. Higher the skill level, higher the amount of money they can make from their career.

When Canadian gamblers approach the IRS and attempt to apply for a U.S. casino tax rebate, the IRS will

generally ask the Canadians to submit their ORIGINAL passports, and will keep the passport for at least 6

weeks. This is done ostensibly to find proof of identity. It also serves to make things so incredibly inconvenient

and unreasonable for the Canadian gamblers, the Canadian gamblers almost inevitably give up on their attempts to obtain a U.S. casino tax rebate, thus also

allowing the IRS to keep the Canadian gambler's casino gambling tax. .

The rules of thumb and strategies we learned while accumulating are not effective or can even be harmful when retirement plan distributions begin. The scenario described above is just one of many potential scenarios regarding IRA distributions. Paying for a mortgage with

IRA distributions may increase your taxes. Your charitable gifts may fatten the US Treasury rather than

reduce your taxes. Expect to see your medical insurance and expenses and long-term care insurance deductions

diminish once distributions are a part of retirement income. Today's retirees need to find a way to get funds

out of an IRA without paying excessive taxes. There is not a one size fits all solution for all

taxpayers. A qualified fee-only advisor should review the cash flow, income taxes, assets, liabilities, and other

personal circumstances of prospective clients. This is not as easy as it might seem. Most advisors use packaged financial planning products primarily designed to sell

products. It took the author an enormous effort to develop a program that will determine both the tax on

distributions and to compare the current and future cost or benefit of various strategies. At the risk of sounding self-serving, our clients as well as other advisors tell us

they have not found a program that quantifies the value of financial advice in such a clear and concise way.

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