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Tax Law Changes

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Tax Law Changes

 

Tax Increase Prevention and Reconciliation Act of 2005

(TIPRA) 

 

 

 

 

TIPRA 

Overview

On May 17, 2006, President Bush signed TIPRA, the Tax Increase Prevention and Reconciliation Act of 2005.  TIPRA pleased many taxpayers and received wide media attention for extending the current low rates for capital gains and dividends through 2010.  It also put a temporary patch on the Alternative Minimum Tax (AMT) through the end of the year.

Bad News for Children with Interest Income

Somehow this part of TIPRA missed wide coverage and attention.  The "Kiddie Tax", under the current law, makes all investment income over $1,700 per year earned by a child under the age 14, taxable at the parents highest tax bracket.  TIPRA has extended the age to 17!

Roth-IRA Conversions

Normally, with income in excess of $100,000, taxpayers cannot convert their IRA account to Roth-IRA accounts.  TIPRA will eliminate that restriction, but not until 2010. This assumes, of course, that no future congress between now and then decides to change that.  In any event, if this comes to pass, taxpayers who normally wouldn't have this option, will be able to convert their IRA's to Roth-IRA's.  There will be a two year period to spread out the tax liability.

 

                            

 

Wealth eValuator

Your most exciting opportunity to organize your financial planning

As part of our full service financial planning offerings, we provide a unique and exciting software solution called Wealth eValuator.  Wealth eValuator provides a safe, secure and individualized website which will track all of your assets and liabilities and so much more. 

  

How would you like to be able to see all of your financial accounts in one place?  How about a secure vault for storing all your important documents, pictures and files?  How about a program that automatically contacts you when your accounts need attention?  Click on Wealth eValuator to experience the power and excitement of this program.  Then call or write to arrange a live demonstration in our office.        

 

 

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    Teachers

      

    Why 403(b) Plans Are So Important For You

     

    The Smart Way To Buy Back Past Service

     

     

     

     

     403(b) Plans

    Teachers have a unique savings opportunity

    A 403(b) Savings Plan!

     

     

    • Payroll Deducted Savings
    • Your Account Grows Tax Sheltered
    • Contributions Reduce Your Taxable Income

     

    A 403(b) plan allows teachers to arrange to conveniently save money from each paycheck, before both Federal and State income taxes are withheld! This powerful plan allows teachers to reduce income taxes while building significant additional savings for retirement. Accounts can be started with as little as $25 per paycheck. However, substantial and siginificant savings can be achieved, up to $25,000 per year in some cases, fully pre-tax.

     

    How Can We Help?

    At Daniel J. Galli & Associates, we have a quarter century of experience in helping teachers set up 403(b) accounts. We also provide on-going attention and service to the accounts. We help you set up your plan, arrange the investments and monitor and manage the account to provide your account with the potential to achieve your goals.

     

    Let Us Help You Start A Plan Today

    If you have an exisitng 403(b) account, we can provide an analysis of your current investments and make suggestions for improvements to the account. We can help coordinate your 403(b) account with other retirement accounts such as your IRA and Roth-IRA accounts. We can even help to arrange to transfer the existing balances from your current accounts to your custom designed and managed investment accounts.

     

    Let Us Review and Analyze Your 403(b)

    If you would like more information about your 403(b) plans or would like to begin one, please contact us.

     

     

     

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    Teacher's Buying Back Service The Easy Way

     

     

     

     

    Massachusetts teachers who need to buy back past years of service before retiring, can pay for those years using untaxed money! Your 403(b) accounts can be used for these buy backs.

    If you don't have a 403(b) or it's value is too modest, no problem... you can fund or start one until it is large enough to use. Money in an IRA, 457 or other plan? It's possible to use those dollars for buying back years, however, some special steps need to be taken.

    This is a huge advantage for public school teachers in Massachusetts.

    If you have any questions or would like us to help with this important planning, contact us here.

     

     

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