July 12, 2013 |
Dear Liz: Everyone talks about Roth IRAs and how beneficial they are. But I am self-employed, my husband contributes 16% toward his 401(k), our house is paid off, and we no longer have dependents to deduct on our 1040 tax return. My contribution to my traditional IRA is the only tax deduction we have left. Should I consider a Roth anyway? If so, why? Answer: A Roth would give you a tax-free bucket of money to spend in retirement. That would give you more flexibility to manage your tax bill than if all your money were in 401(k)
CALIFORNIA | LOCAL
February 14, 2013 |
California lawmakers have long complained about being shortchanged by Washington, D.C.: California taxpayers put a lot more into the U.S. Treasury than the state gets back in federal spending. One politician is proposing an unorthodox approach to grabbing some of those dollars back. Sen. Kevin DeLeon (D-Los Angeles) is promoting a scheme through which he says taxpayers could seize on a loophole that recently emerged in federal tax law to raise hundreds of millions of dollars for higher education.
February 8, 2013 |
In my Wednesday column , I argued that the federal tax deduction for home mortgage interest should be trimmed -- because instead of helping first-time homeowners, a worthy public policy goal, it mostly subsidizes big mortgages. I wasn't surprised to learn that a lot of readers disagreed. Angry emails flooded in. Many of the objections were well reasoned, although one reader just called me a Marxist. He must not have noticed that Mitt Romney, who's not a Marxist, also proposed capping the mortgage deduction -- actually, all itemized deductions -- during his presidential campaign.
January 13, 2013 |
Dear Liz: Recently, someone from an insurance company proposed that I stop investing through my 401(k) at work and instead invest in his insurance company contract with after-tax dollars. He claims the funds would be guaranteed so that I would never lose principal, although there would be a cap on how much I could make in any given year. His claim is that it is better to forgo the tax deduction I would get from my 401(k) contributions so that I can take the money out of this contract tax-free in 20 or 30 years.
December 19, 2012 |
You may be unaware of the local ramifications of one of the proposals currently at play in the danse macabre that passes for fiscal negotiations in Washington. This is the plan to cap federal tax deductions at either a set figure or a percentage of income. Either way, it would strike deepest and hardest mostly at residents of California, as well as other populous states with high levels of government services, high state and local taxes, and relatively expensive housing. The mortgage interest and state and local tax deductions are among the most important tax breaks that would be capped under this sort of proposal.
October 24, 2012 |
The do-gooding spirit is thriving in the U.S., with 81% of Americans planning to maintain or boost their donations this year, according to a new report. That's nine percentage points higher than 2011 and 18 points above 2010, according to Fidelity Charitable, which offers programs to boost altruism. The average American plans to give $2,400, up from $2,100 last year. Three-quarters of the 571 respondents said they don't donate in order to benefit from tax deductions. Seven in 10 are influenced by their experiences with illness or death, while two-thirds say it's a holiday tradition to give.