posted on: 5/3/2006
revised: 3/6/2010
The Tax Increase Prevention and
Reconciliation Act (TIPRA, H.R. 4297) or some close reconciled
version of the proposal, seems almost certain to become
law in the very near future. At first glance, two groups of
people should begin thinking about taking advantage of this
immediately:
1) Those in the $150,000 to $400,000
total household income range who were affected by the Alternate
Minimum Tax in 2005 will benefit from some relief of the indexing
provisions. The allowance is an extra $20,000 for married
taxpayers filing jointly. Business and tax planning
(especially for those with disallowed tax credits or owners of rental property)
for 2006 should be adjusted ASAP to take advantage of the allowance.
2) Roth Conversions will be allowed for
individuals with over $100,000 income beginning in 2010. This
will be a great deal for me personally as well as many of my
younger-than-60 baby-boomer clients. But this means a much
higher than usual taxable income in that year. To make the
most of this tax break, it will be necessary to start planning now -
especially for those people who have other financial
arrangements that are based on overall taxable income. In many
cases it takes more than a year to change the legal arrangements
(dependency, residency, domestic relations orders, etc) that are
based on total income.
If one of these affects you, schedule a
tax planning session ASAP - with me or your own tax adviser.
The eventual tax savings will be well worth the investment.
For those who want to see the early
details, a copy of the summary is posted at
http://www.tonynovak.com/images/taxbill20060509.pdf
keywords: Tax Increase
Prevention and Reconciliation Act , alternate minimum tax, Roth IRA,
TIPRA, H.R. 4297
related topics:
Copyright 2010 by Tony Novak. Originally produced and published for the "AskTony" column syndication prior to 2007. Edited and independently republished by the author in March 2010. All rights reserved. |