Janell A. Israel & Associates
What's new in taxes:
Act Soon To Benefit From This New IRA Charitable
Donation Option
A recent change in the charitable contribution rules provides
a potential tax planning opportunity involving your individual retirement
account. If you’re 70½ or older, you can make contributions of up to $100,000
directly from your IRA to a qualified charity.
Charitable IRA distributions are penalty-free withdrawals
that are neither included in, nor deducted from, your taxable income. Better
yet, such payments qualify as required minimum distributions (RMD) from your
retirement account. Thus, if you do not need the IRA distribution to live on,
and you wish to make a donation, a charitable IRA rollover might be a win-win
strategy.
Charitable rollovers also make sense when the inclusion of
the IRA distribution in your income would result in the phasing out of other
deductions, such as personal exemptions or itemized deductions. Non-itemizes
also benefit since the donated amount is excluded from their taxable income.
Keep in mind that there are unique restrictions on this type
of gift. The IRA rollover cannot be contributed to a donor advised fund or
supporting foundation. Also, if any benefit is received in exchange for the
gift, such as dinner tickets, the entire distribution becomes taxable. As with
any donation, the charity needs to provide you with a tax receipt containing
all the proper substantiation for your contribution. Without it, the gift is disqualified.
Also be aware that the donation must be made directly from the IRA to the
charity and not paid to you first.
This provision is scheduled to expire this year, so now’s the
time to act. If you’re interested in analyzing whether this option is a tax-smart
move for you, give us a call.
New Business:
Age 50-plus Is Fastest Growing Group Of New Business
Owners
According to the Small Business Administration, the
fastest-growing category of new entrepreneurs are people aged 50 to 62. About
half of all small business owners are age 50 or older.
For individuals of any age interested in going into business,
the Small Business Administration’s Web site is an excellent resource that
provides a wealth of useful information. Check it out at www.sba.gov.
If you would like assistance with your business concerns,
please contact us.
What's New in Finance:
New Survey Shows Most Have No Will
A recent survey conducted for the legal profession by Harris
Interactive showed that the majority of Americans do not have a will.
55% of all adults have no will, and the percentage of those
without wills is even greater among minority groups. 67% of African American
adults and 74% of Hispanic American adults have no will.
The survey also revealed that living wills, also known as
medical directives, have become more popular. 41% of adults now have a living
will, compared with about 30% in 2004.
Protect Yourself From Identity Theft And Scams
Scams are everywhere. However, identity theft and its evil
twin, phasing, have become major problems. Strictly, identity theft occurs
when someone literally steals your identity. They set up bank accounts, take
out credit cards, and borrow money in your name. But related scams include
someone using your credit card number illegally, or stealing your PIN and
looting your bank account.
Phasing occurs when someone pretends to be a legitimate
business or government organization and convinces you to give up personal or
financial information. They often use phone calls or e-mail messages and even
set up fake Web sites.
The number of these scams is exploding. If you fall victim,
you’All spend countless hours sorting out the mess. Follow these tips to help
protect your identity.
* Your physical property. Thieves love to go through newly
delivered mail looking for credit cards and bank statements. They’All also sort
through garbage for discarded bills and statements that show account numbers.
Protect yourself with a locking mailbox and a shredder. Shred all financial
data before you throw it out. Don’t carry PIN numbers or your social security
card in your purse or wallet.
* Your computer. Many phasing attempts come via the
Internet. Never give out your social security number or account numbers unless
you’ve initiated the transaction. Never reply to e-mail requests to
"update your information." If in doubt, telephone the company or
organization. Install software to screen out junk mail and protect against
viruses and spyware. These can be used to steal your personal data or direct
you to bogus Web sites. Update your protection regularly.
* Your telephone. Never give out personal information in
response to an unsolicited call. Don’t fall for calls claiming to be from your
bank’s security department. Reduce unwanted calls by listing your number on the
national "do not call" list. If a telephone solicitor calls, ask to
be put on their "do not call" list and then hang up.
* Your accounts and credit report. Reconcile your bank
accounts and credit card statements regularly. Report unusual activity immediately.
Consider online access so you can review activity frequently. Every four
months, go to www.annualcreditreport.com and order a free copy of your credit
report from one of the three major agencies. Look for mistakes, accounts you
don’t recognize, or strange credit inquiries. Report suspicious items
immediately.
These steps won’t guarantee protection, but they’re a good
start.
Your Car's Real MPG
Car buyers
will see more accurate fuel economy estimates when they shop for 2008 models.
That’s because the Environmental Protection Agency is updating its procedures
for arriving at its miles-per-gallon estimates. Current tests are outdated,
which has led to overstated guesstimates. The new standards will more closely
approximate drivers’ real-world experience by factoring in higher speeds,
stop-and-go driving, more aggressive acceleration, use of air-conditioning and
code-weather driving. The tests will reduce vehicles’ projected city mpg by
12%, on average, and highway mpg by 8%. For revised fuel economy estimates for
more than a thousand 2007 models, go to www.kiplinger.com/tools/gas_mileage.
Take a Break
Service
At one time in my life, I thought I had a handle on the
meaning of the world “service.”
“The act of doing things for other people.”
Then I heard the terms:
Internal Revenue Service
Postal Service
Telephone Service
Civil Service
Customer Service
Service Stations
And I became confused about the word "service." This is not
what I thought "service" meant.
Then today; I overheard two farmers talking and one of them
mentioned that he was having a bull over to "service" a few of his cows.
SHAZAM! It call came into perspective. Now I understand what
all those "service" agencies are doing to us.
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The
information contained in this newsletter is of a general nature and should not
be acted upon in your specific situation without further details and/or
professional assistance. For more information on anything in this newsletter,
or for assistance with any of your tax, business, or
financial strategy concerns, contact our office.