Parents, grandparents, and other family members may want to consider funding a Coverdell Education Savings Account ("ESA") for 2012. Coverdell ESA's are tax-advantaged savings plans combining tax-deferral on investment earnings and tax-free withdrawals if the beneficiary of the savings plan withdraws funds to pay for qualified education expenses. Coverdell ESAs are funded using post-tax dollars (no deduction is allowed for contributing to the account) and allow for contributions up to $2,000 per year per beneficiary. Contributions to a Coverdell plan can be contributed as late as April 15th, 2013, for the year 2012, and must be contributed before the beneficiary turns 18 years old, reports Fairmark.com.
The CCH Tax Briefing on 2012 Year-End Tax Planning brought to my attention an added incentive for contributing to a Coverdell ESA for 2012: "Unless extended, the maximum annual contribution for a Coverdell ESA is scheduled to decrease to $500 after 2012."
The first of three Presidential Debates was held on October 3, 2012. Incumbent President Barack Obama debated the former Governor of Massachusetts Mitt Romney. Transcripts of the debate can be read at the Washington Post and at CNN.
On the same day, third party candidates Dr. Jill Stein (Green Party) and Rocky Anderson (Justice Party) held a expanded Presidential debate broadcast by Democracy Now. Jill Stein and Libertarian Party candidate Gary Johnson each wrote responses to the debate published by USA Today.
The topics of the first Presidential Debate, selected by moderator Jim Lehrer, were the economy, health care, the role of government and governing. Tax issues featured prominently among all the candidates. The Wall Street Journal has summarized the tax issues debated by Obama and Romney. Third-party candidates also advanced some intriguing tax ideas, which I shall highlight below.
Justice Party candidate Rocky Anderson, during the expanded Presidential debate, made an interesting tax proposal. He called for eliminating Read More...
Year-end tax planning often involves balancing two sets of tactics: deciding what can be earned or paid for this year, and what can be postponed or deferred until next year. Typically, taxpayers wanting to optimize their tax situation are inclined to defer any additional income, such as bonuses, until the following year in an effort to keep this year's taxes at a desirable level. For the year 2012, just the opposite tactic might produce a lesser tax bill. Here's why.
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If you're finishing up your 2011 tax return for the deadline on October 15, 2012, and you have a balance due to the Internal Revenue Service, you have several options for paying your remaining taxes. Read More...
