900
N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 ·
215.563.0276 · Fax:
856.667.3652
 |
Tax
Tip of the Week |
Are you looking forward to receiving a tax refund or the stimulus payment that will be arriving in a few weeks? Maybe you're expecting both. By now you know how much you'll be getting and approximately when the cash will land in your bank account. The only question is, what's the best way to put the money to work for you?
Here are two tax-smart ideas.
1. Fund your IRA. Depending on your income, making a contribution to a traditional Individual Retirement Account could result in a deduction on next year's tax return — and possibly a credit of as much as $2,000 as well.
For 2008, you can contribute a maximum of $5,000 to your IRA. Add another $1,000 for a total of $6,000 if you're over age 50.
2. Invest in knowledge. Establish a qualified tuition plan, commonly called a Section 529 plan, or a Coverdell Education Savings Account. While contributions are not tax-deductible, the account earnings grow tax-free, and distributions used for educational expenses are generally also tax-free.
Do you need work-related training? Education required by your employer or courses that improve or maintain skills necessary for your present job can qualify for a deduction.
Want to know more about how to make the most of your refund? Give us a call for personalized tax and financial planning advice.
For more complete information about 529 savings plan, including investment objectives, risks, fees and expenses associated with it, pleases read the issuer's official statement. The issuer's official statement can be obtained from your financial advisor. Please read it carefully before investing.
Please consider, before investing, whether your home state offers any state tax or other benefits that are only available for investments in your state's qualified tuition program. Other benefits may include reduced or waived program fees, matching grants, and scholarships to state colleges. Any state-based benefit offered with respect to a particular 529 college savings plan should be one of many appropriately weighted factors to be considered in making an investment decision. You should consult with your financial, tax or other adviser to learn more about how stat-based benefits (including any limitations) would apply to your specific circumstances and you also may wish to contact your home state or any other 529 college savings plan to learn more about the features, benefits and limitations of that state's 529 college savings plan.
Qualified expenses include tuition, fees, room and board, books and other supplies needed to attend an institution of higher education. A 10% federal penalty on earnings will apply if you receive a non-qualified withdrawal.
Click here to view previous tax tips.
"Tax Tips" are published weekly to
provide useful tax information. Return to this site every week for
helpful tax-cutting suggestions, tax reminders, and current tax
information.
The information contained in this site is of a general nature and
should not be acted upon in your specific situation without further
details and/or professional assistance.
If you would like more information on anything in "Tax Tips," or if
you'd like to be on our mailing list to receive other tax-cutting
information from time to time, please contact our office. We're here to
help.
