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Question
I've just been offered a severance package that will push me into a higher tax bracket for 2009. I was thinking of selling stock to offset it but the limits only $3,000. Do you have any other suggestions how I might reduce my income prior to yearend. Thank you
Steve,
Thanks for your question.
Assuming you itemize your deductions, you can make some charitable contributions to lower your income. The problem with this approach to tax reduction, however, is that for every dollar you deduct, you only get a 10-35 cent reduction in your taxes.
You could also "speed up" deductions, paying for taxes and other deductible items before the end of the year.
If eligible, you could contribute to an IRA for yourself and spouse (assuming you are married).
That's about it. Hope this helps.
John Stancil, CPA
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| Rating(1-10) | Knowledgeability = 9 | Clarity of Response = 10 | Politeness = 10 |
| Comment | THANK YOU John, I already was planning to open a regular IRA for my spouse. I've put the maximum in my 401k $16,500 and $5,500 cathcup since I'm over 50. What would be the income limit for myself to also make a deductable IRA (would I qualify). Thanks, STEVE | ||
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John Stancil, CPA
Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 35 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com. Prepare and file your own taxes at www.1040stancilcpa.com
Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CGMA, and CFM. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 30 years and have taught accounting and tax at the college level for over 30 years.
Organizations
AICPA, FICPA, IMA, NATP
Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly.
Education/Credentials
DBA University of Memphis
MBA University of Georgia
BS in Accounting Mars Hill College
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