YearEnd Tax Tips for 2000

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Year-End Tax Tips for 2000
Make It a Tax Year Worth Remembering!
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2000 Tax Rates

• 15

• 28

• 31

• 36

• 39.6

Year-End Tax Tips for 2000
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2000 Standard Deduction

• Single 4,400
• Head of Household 6,450
• Married Filing Jointly 7,350 or Qualifying
  Widow(er)
• Married Filing Separately 3,675
• Additional for Elderly/Blind 850
  Married
• Additional for Elderly/Blind 1,100 Unmarried
  
• Dependents Greater of 700, or 250
  plus 2000 earned income up to the
  applicable standard deduction (4,400)
  

Year-End Tax Tips for 2000
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Personal Exemption Phase-Out Ranges

• Begins after AGI of
• Singles 128,950
• Heads of Household 161,150
• Married Filing Jointly 193,400
• Married Filing Separately 96,700

Year-End Tax Tips for 2000
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Timing the receipt of income enables you to
Year-End Tax Tips for 2000
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Shift Income
Shift income to family members

• Make gifts of 10,000 20,000 with no tax
  implications
• Pay for a grandchilds education
• Give capital gains property to your children

Year-End Tax Tips for 2000
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Donate to Charity

• Give to IRS-qualified organizations
• Donate appreciated property
• Look into gift funds

Year-End Tax Tips for 2000
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Defer Income

• Delay invoices if self-employed
• Postpone receipt of bonus
• Sell off low-performing assets

Year-End Tax Tips for 2000
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Manage Your Investments
Long-Term Capital Gains You must hold property
for more than one year to qualify for the
Long-Term Capital Gains tax rate of 20
Year-End Tax Tips for 2000
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Manage Your Investments
Capital losses can offset capital gains and up to
3,000 of ordinary income.
Year-End Tax Tips for 2000
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Manage Your Investments
Delay tax on investment interest by

• Investing in six-month CDs
• Investing in Treasury bills
• Timing mutual fund purchases

Year-End Tax Tips for 2000
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Retirement Savings Tax Breaks
401(k) Plans

• Contribute up to 10,500 for 2000
• Contributions reduce taxable income, dollar for
  dollar
• Investment earnings grow tax-free until
  withdrawal
• Benefit from matching contributions

Year-End Tax Tips for 2000
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Retirement Savings Tax Breaks
IRA-Deductible Contributions

• 2,000 for single filers
• 4,000 for married couples
• AGI phase-out rules may apply

Year-End Tax Tips for 2000
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Retirement Savings Tax Breaks
Contributions up to 2,000

• Roth IRAs

Nondeductible
Tax-deferred earnings
Year-End Tax Tips for 2000
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Retirement Savings Tax Breaks

• Available to those with self-employment income
• Contribute up to 30,000
• Set up by December 31, 2000
• Contributions allowed until April 16, 2001

Keoghs
Year-End Tax Tips for 2000
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Education IRAs

• Contribute up to 500 per year per child
• AGI limits of 150,000 for joint filers and
  95,000 for single filers
• Contribution grows tax-deferred

Year-End Tax Tips for 2000
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Accelerate Deductions
Make January 15, 2001Estimated Tax Payment in
2000
Year-End Tax Tips for 2000
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Accelerate Deductions
Student Loan Interest

• Deduct up to 2,000 of student loan interest
• Must be interest paid during the first 60 months
  in which it is required
• Phased out for individuals with AGIs of 40,000
  and 60,000 for married filing jointly

Year-End Tax Tips for 2000
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Accelerate Deductions

• Make charitable donations of
  clothing, furniture, appliances and other
  household items
• Get receipts for items valued at 250 or more
  

Year-End Tax Tips for 2000
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Accelerate Deductions

• Mortgage interest on first and second residences
• Points on a primary residence
• State and local property taxes

Year-End Tax Tips for 2000
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Accelerate Deductions
Boost Medical Expenses
Deduct those in excess of 7.5 of AGI
Year-End Tax Tips for 2000
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Other Deductible Expenses

• Miscellaneous Expenses
• Unreimbursed employee business expenses
• Investment-related expenses
• Tax-related expenses

Year-End Tax Tips for 2000
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Smart Tax Moves

• Beware of the Alternative Minimum Tax!
• It can be triggered by large deductions

Year-End Tax Tips for 2000
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Smart Tax Moves

• Take advantage of tax credits!
• They offset tax bill dollar for dollar

Year-End Tax Tips for 2000
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Tax Credits

• Child Credit Maximum of 500
• Dependent Care Credit Up to 2,400 for one
  child 4,800 for two or more children

These credits are subject to AGI phase outs
Year-End Tax Tips for 2000
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Education Credits
Subject to AGI Phase-Outs

• Joint filers with between
• 80,000 and 100,000
• Individual filers between 40,000-50,000

• Hope Scholarship Credit
• Lifetime Learning Credit

Year-End Tax Tips for 2000
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Smart Tax Moves
Flexible Spending Accounts

• Set aside pre-tax funds
• Use all money set aside by year endor lose it!

Year-End Tax Tips for 2000
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Stay on Track with Estimated Taxes

• To avoid penalties Pay 100 of last year's tax
  bill in quarterly installments or 90 of
  the current year's tax bill.
• High-income taxpayers must pay 106.8 of 1999 tax
  bill.

Year-End Tax Tips for 2000
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The 2000 Season
Make It a Tax Year Worth Remembering!