Weinlander Fitzhugh - Certified Public Accountants & Consultants

You are probably as tired of hearing about ID theft, phishing, phone scams and other schemes as you are of the political infighting in Washington. However, for most people, protecting themselves against these fraudsters is a far more serious issue than the congressional rhetoric we have to endure.

When you convert a traditional IRA to a Roth IRA, you have to pay the tax on the conversion.  However, individuals frequently do that this so they can take advantage of future tax-free accumulations. Distributions from Roth IRAs are generally tax free, including any earnings (accumulations) while the account is a Roth account.

Taxpayers whose top marginal tax bracket is lower than 25% enjoy a long-term capital gain tax rate of zero. Yes, you read correctly: the tax on any long-term capital gains for taxpayers within the 10% or 15% tax bracket is zero! This can provide you with the opportunity to sell some of your winner stocks and pay no tax on the resulting gain. Long-term capital gains apply to stocks and other capital assets you have owned for a year and a day or longer.

Remember those 1099s, W-2s, K-1s and other informational forms you receive each year reporting your interest, dividends, sales, wages, retirement income, IRA withdrawals, health insurance forms and other items having to do with your tax return? Well, the IRS also gets this information and feeds it into its computers. Thanks to modern computer technology, the IRS is able to match that information to what you reported on your tax return, and if something significant is omitted or there’s a discrepancy with the numbers, the IRS is going to send you a letter asking for an explanation or a tax payment. You will also receive correspondence if you don’t file a return and the data the IRS has indicates that you should have filed. It has form letters for just about every possible situation.

There are actually two higher-education tax credits. The American Opportunity Tax Credit (AOTC) provides up to $2,500 worth of credit for each student, 40% of which is refundable. The credit is equal to 100% of the first $2,000 of college tuition and qualified expenses and 25% of the next $2,000. The AOTC only applies to the first 4 years of post-secondary education.


Are You Ready To learn more about how wf can help you?   Let's Start The Discussion