A 529 Plan For Your Retirement Years?

Here is a good story about a unique use of 529 college savings programs. Bottom line, if you are interested in studying at home or abroad when you graduate from your first career, you can use a 529 plan to pay for it!

• May be eligible for state tax deduction
• Investments grow without taxes and when spent for accredited higher education withdrawn without taxes also
• You can name a contingent beneficiary

Check it out here.
Courses here.

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2007 Tax Information

Some important numbers from the IRS for the 2007 tax year.

Standard Deductions

• Single - $5,350
• Married Filing Joint - $10,700
• Head Of Household - $7,850
• Married Filing Separately - $5,350
• Additional amount if 65 or older - $1,050

Personal exemption - per taxpayer and dependant - $3,400

Tax Rates - Married Filing Jointly

• 10% on taxable income between $0 and $15,650
• 15% on taxable income between $15,650 and $63,700 plus $1,565
• 25% on taxable income between $63,700 and $128,500 plus $8,772.50
• 28% on taxable income between $128,500 and $198,850 plus $24,972.50
• 33% on taxable income between $198,850 and $349,700 plus $43,830.50
• 35% on taxable income over $349,700 plus $94,601

Tax Rates - Single

• 10% on taxable income between $0 and $7,825
• 15% on taxable income between $7,825 and $31,850 plus $782.50
• 25% on taxable income between $31,850 and $77,100 plus $4,386.25
• 28% on taxable income between $77,100 and $160,850 plus $15,698.75
• 33% on taxable income between $160,850 and 349,700 plus $39,148.75
• 35% on taxable income over $349,700 plus $101,469.25

technorati tags:Finance, Tax Rates, 2007 Information

Thanksgiving

It is Thanksgiving, a time to join with family and enjoy the bounty of our harvest. We have all been blessed with many riches. Enjoy your holiday with friends and family - our true wealth in life.

photo couresy of taliesin@morguefile.com

Retirement Plan Limits for 2007

Here are updated contribution limits for 2007 :

401(k) & 403(b) - $15,500 plus $5,000 catch up if 50 or older.
SIMPLE IRA - $10,000 plus $2,500 catch up if 50 or older.
IRA & Roth IRA - $4,000 plus $1,000 catch up if 50 or older.

technorati tags:Finance, IRA , 401k SIMPLE IRA

Naming A Trust As An IRA Beneficiary

Sometimes there are good reasons to name a trust rather than an individual as a beneficiary of your IRA. Maybe you have a child who you fear will spend the money they inherit wastefully, or maybe you have a special needs heir and a direct inheritance would affect their qualifications for aid, maybe there is a second spouse you wish to provide for but children from a first marriage you want to protect also.

All of these goals can be achieved and the "stretch out" provisions of IRA rules preserved if you do some careful planning.

IRS rules only allow individuals to inherit IRAs without triggering immediate taxation. However if you structure a trust as a "see through" trust you can exert some control without losing the tax benefits of a "stretch IRA". To qualify as "see through" the trust must:

• The trust must be valid under state law;
• The trust must be irrevocable or become irrevocable at the death of the grantor;
• The trust beneficiaries must be identifiable individuals
  
• Documentation must be provided to the custodian of the IRA by Oct. 31 of the year after the owner dies
  

The trust must pay out the IRA's required minimum distributions to the beneficiaries or be subject to taxes at the trust level which reach the maximum tax rate (35%) with only $10,000 of income. The trust must base the RMD on the age of the oldest beneficiary so if there is a large difference in the ages of your desired beneficiaries you may want to consider splitting the IRA to allow a lower RMD for younger beneficiaries.

Having a trust as the beneficiary of your IRA can provide many benefits, but the price of making a mistake is high, so be sure to consult with a qualified legal and tax advisor before choosing this option.

technorati tags:Finance, IRA Beneficiary, estate planning

Free Accounting Software from Microsoft

Much like Outlook Express, Microsoft has released a free small business accounting software package Office Accounting Express 2007. If you have a small business you know keeping the books is a real headache. Office Accounting can be used to manage rental real estate, an eBay business, realtors, or just to keep up with your personal expenditures.

You can find this free download here.

technorati tags:Finance, Microsoft Accounting Software, small business tools