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2012 IRA Contribution and Deduction Limits

November 1, 2011

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Jon

If you’re looking to supplement your retirement nest egg, two of the best options is saving through a traditional IRA or Roth IRA. Which IRA is best for you may come down to the new 2012 IRA contribution and deduction limits released by the IRS.

Though you may not meet the requirements for both IRAs the important thing is to save as early and often as possible for your retirement. If you don’t have an existing IRA to contribute to, the best online brokers will make it easy to open an IRA.

All 2012 IRA contribution and deduction limits are based on your Modified Adjusted Gross Income or MAGI.

2012 Maximum Contribution Limits

The 2012 Roth IRA and traditional IRA contribution limits did not change from 2011. For both IRAs the maximum amount you’re allowed to contribute is $5,000. You may also be eligible for the additional “catch up contribution” if you’re 50 years old or older by the end of 2012. The “catch up contribution” allows for an additional $1,000 (for a total of $6,000). Continue Reading…
2012 Federal Income Tax Brackets Released By IRS

October 25, 2011

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Jon

The IRS recently released the official 2012 inflation adjusted income tax brackets. This is something the IRS must do each year so the tax rates keep pace with inflation. These income tax bracket changes will affect your 2012 income and your 2013 income tax returns. Just something to keep in mind when it comes time to filing your taxes.

If you remember back to 2010, Congress eventually voted on extending the Bush tax cuts through 2012. So, not surprisingly, the income breakdown is very similar to the 2011 federal income tax brackets. The only change for 2012 is the inflation adjustment to the income levels and deductions.

Though changes can still be made by Congress before the start of 2012, it’s highly unlikely. Federal tax reform looks to be a big part of the 2012 presidential election campaigns. Any changes now would spoil the future tax debate. Continue Reading…
Home Business Deduction Tax Tips

October 19, 2011

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Jon

The at-home business has become really popular over the years. It offers people an opportunity to generate an extra source of income right from home. By taking advantage of some home business deductions, you could significantly lower your year-end income tax bill when you file your taxes.

Like any business, the home business has its expenses, but many of them you may have paid before the business was started. Things like rent or mortgage, internet or a phone line are an everyday occurrence in any home budget. The IRS draws a fine line between personal and business expenses when it comes to a home business. But some of those personal expenses may still qualify as home business deductions.

What’s Your Business Percentage?

If you qualify for the home business deductions, your first step is finding out your home business percentage. You’ll then use this percentage to figure out the business part of those normal home expenses. The IRS uses two examples to finding out your business percentage: Continue Reading…
Three Costly Roth IRA Conversion Mistakes

October 11, 2011

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Jon

Many people took full advantage of a Roth IRA conversion in 2010, thanks to the new no income limit rule and a one time tax payment change. But were those 2010 Roth conversions the best choice for the money? Is there time to go back? What should you be considering for any future Roth IRA conversion?

Certainly there are benefits to a Roth IRA conversion. The two biggest being tax-free retirement income and no minimum distribution requirements. In order to get the benefits of a Roth IRA, there are immediate tax costs. If these benefits don’t outweigh the costs involved, a Roth IRA conversion is wasted money for the wrong person. So, consider these three reasons a Roth IRA conversion is a mistake. Continue Reading…
Preparing For The Q3 Earnings Season

October 6, 2011

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Jon

The third quarter earnings season begins Oct. 11 with the Alcoa earnings report at the market close. It should definitely be an interesting earning season to say the least. As earnings reports battle with the European debt crisis and the political environment, I don’t expect this season to go smoothly. In fact, I wouldn’t be surprised to see stocks fall on great earnings reports, when news comes out of Europe.

The Third Quarter Review

The story for the past three months has been defense. We’ve seen the Dow drop from its highs of the quarter, about 12%. The worst single quarter decline since Q1 2009, thanks to the debt ceiling crisis, political infighting, and increased global economic fears. The market’s been extremely volatile for much of the quarter. Even those with iron stomachs must have felt squeamish at times.

After the initial August plunge from the US debt downgrade, the markets were on a steadily declining trading range based entirely on European economic woes and mixed US economic data. Fairly nauseating to say the least and I for one am hoping for calmer waters ahead. Continue Reading…
Avoiding The New Norm: Debit Card Fees

October 4, 2011

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Jon

Bank of America took a big leap last week, jumping head first into the monthly debit card fee ring. Starting the next round of additional banking fees introduced to counteract the new limits on debit card swipe fees which took effect Oct 1^st. Which has not made me and a few million other BofA customers happy campers. But don’t fret, there are still options available to avoid them.

There have been a few banks that have tested the debit card banking fee, but on a small scale. Wells Fargo has tested the new fee in five states. J.P. Morgan has done it in a small part of Wisconsin, and Suntrust Banks began charging a debit card fee in June to new customers.

With Bank of America jumping on board, it’s only a matter of time before other big banks adopt debit card fees as the norm. With the announcement last week, BofA will be charging account holders $5 each month they use a debit card for a purchase starting in 2012. The charge will not apply to BofA mortgage customers or to those account holders with a combined amount of $20,000. Continue Reading…