Use Your 2007 Tax Refund To Help Make Your Retirement Dreams Reality
courtesy of Edward Jones
Think you’re doing all that you can to help make sure you live the retirement years of your dreams? With the recently approved Pension Protection Act of 2006 (effective Jan. 1, 2007), contributing to your Edward Jones IRA just got a little easier. And you may be able to make your tax refund last years into the future.
On 2007 tax returns, taxpayers can now instruct the IRS to directly deposit their tax refunds into an IRA using Form 8888. This form allows taxpayers to directly deposit their refunds into as many as three different accounts including checking, savings, and retirement accounts (such as IRAs). And this split refund option is available whether you choose to file electronically or by mail. All you have to do is provide the necessary account and routing numbers.
Even if you only use a portion of it for your retirement savings, your 2007 tax refund may be able to help make your retirement dreams reality. Set up an IRA direct deposit for your 2007 tax return today.
A look into the future ... what may become of the federal estate tax?
by William S. (Bill) McCarthy, CPA
Tax Manager, Houston & Company, PC
There are several things to consider when evaluating the future of the federal
estate tax:
- There have been several failed attempts to make the 2010 repeal permanent.
- Current exempted amounts (as protected by the unified credit) equal $2,000,000 on the estate tax and $1,500,000 on the gift tax for 2006 to 2008 inclusive. Exempted amounts for the estate tax are scheduled to increase to $3,500,000 in 2009.
- Lawmakers have differing views on the subject and divergent reasons, respectively, for wanting to continue and eliminate the tax.
- There is a strong likelihood the structure of the estate tax will ultimately be a compromise of what it is currently and where both sides desire it to be.
- Permanent repeal does not appear likely anytime soon.
Congress appears to be on the path to increasing the exempted amount of estates and reducing the tax rates on the portion of the estate that will be taxable. Similar compromise action was taken regarding what is now the exclusion on the gain on the sale of a personal residence. In that case, all of the calculations of prior basis and deferred gain were replaced with a tax on the gain, if any, that remains after subtracting an applicable flat dollar exclusion amount.
It appears that most lawmakers have warmed up to the idea that the ability of people to be able to pass on family businesses, farms, etc., needs to be protected. Congress seems to want to strike a balance between providing some protection to these types of legacies and retaining a source of tax revenue, and seems likely to do something toward this objective. This would be similar to Congress’ approach to the Alternative Minimum Tax (AMT) where the exemption amount has been raised to avoid the unintended and adverse consequences of having the AMT apply to relatively modest incomes while retaining a revenue source.
Please call our office if you have questions or need guidance regarding your particular tax situation.
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Duluth, GA 30097 
