The Ernst & Young Tax Saver's Guide 2001

by Ernst & Young; Richardson, Margaret Milner; Bernstein, Peter W.

• ISBN13: 9780471391203
• ISBN10: 0471391204
• Format: Paperback
• Copyright: 2000-10-01
• Publisher: John Wiley & Sons Inc

Summary

Tips and strategies to lower your taxes now-from the nation's #1 tax authority! When you need up-to-the-minute answers to your tax-planning questions, turn to a reliable and trusted source: Ernst & Young. Packed with hundreds of unique, money-saving tips, The Ernst & Young Tax Saver's Guide 2001 gives you the lowdown on the latest tax law changes and the best strategies to save more money on your taxes. "Changes in the Law You Should Know About" covers new legislation as well as proposed laws that may affect future tax years "TaxSavers," "TaxAlerts," and "TaxOrganizers" offer helpful tips and reminders Special life-events index helps you minimize taxes associated with marriage, home-buying, retirement, and more Year-round tax-planning strategies and last-minute year-end tax-saving ideas help reduce your overall tax bill Charts and tables clarify confusing tax issues Plan now so you don't have to pay later. Put the experience of the leading tax consulting firm to work for you with The Ernst & Young Tax Saver's Guide 2001. Please visit our Web site at www.wileyfinance.com

Table of Contents

How to Use This Book	viii
Index to Life-Cycle Events	x
Changes in the Tax Law You Should Know About	xi
10 Smart Tax Planning Tips	xiii
PART I---TAX STRATEGIES FOR INDIVIDUALS	1	(186)
What You Have to Include as Income	3	(29)
Introduction	3	(1)
Wages, Salaries, and Other Earned Income	3	(4)
Interest and Dividends	7	(3)
Rental Income and Expenses	10	(1)
Capital Gains and Losses	10	(1)
Selling Your Home	10	(1)
Income from Business and Other Investments	10	(5)
Social Security and Other Benefits	15	(5)
Other Income	20	(12)
What You Can Deduct: Exemptions, Adjustments, and Deductions	32	(25)
Introduction	32	(1)
Standard Deduction	33	(1)
Personal and Dependent Exemptions	34	(2)
Individual Retirement Arrangements (IRAs)	36	(1)
Simplified Employee Pensions	37	(1)
Keogh (HR 10) Plans	37	(1)
SIMPLE Retirement Plans	37	(1)
Divorce or Separation	37	(2)
Medical and Dental Expenses	39	(3)
Taxes	42	(1)
Interest Expenses	43	(5)
Charitable Contributions	48	(1)
Casualty and Theft Losses	48	(1)
Moving Expenses	49	(2)
Employee Business Expenses and Other Expenses	51	(5)
Overall Limit on Itemized Deductions	56	(1)
Travel and Entertainment Expenses	57	(17)
Introduction	57	(1)
The 50% Deduction Limitation	57	(2)
Travel and Transportation	59	(15)
Tax Planning and Your Home	74	(14)
Introduction	74	(1)
Rules for Selling Your Home	74	(12)
Clarification of Definition of Principal Place of Business	86	(2)
IRAs, 401(k) Plans, and Other Retirement Plans	88	(16)
Introduction	88	(1)
IRAs	88	(4)
Roth IRAs	92	(2)
Education IRAs	94	(1)
401(k) Plans	95	(1)
SIMPLE Plans	96	(1)
Distributions from IRAs and 401(k) Plans	97	(4)
Simplified Employee Pensions	101	(1)
Keogh (HR 10) Plans	102	(1)
Company Retirement Plans	103	(1)
Charitable Contributions	104	(17)
Introduction	104	(1)
Who Is the Recipient?	104	(3)
Private Foundations	107	(1)
Nondeductible Contributions	108	(1)
Gifts of Property	109	(2)
Bargain Sales	111	(1)
Limits on Deductions	111	(3)
Charitable Remainder Trusts	114	(2)
Carryovers	116	(1)
Record-Keeping and How to Report Charitable Contributions	117	(1)
Cash Contributions	117	(1)
Contributions to Charity Dinners, etc.	118	(1)
Noncash Contributions	119	(2)
Capital Gains and Losses	121	(11)
Introduction	121	(1)
How Capital Gains Are Taxed	121	(4)
Strategies for Selling Securities	125	(3)
Other Opportunities for Individuals	128	(4)
Mutual Funds	132	(12)
Introduction	132	(1)
Dividends	133	(6)
Sale of Mutual Fund Shares	139	(5)
Filing Status and How to Calculate Your Tax	144	(26)
Introduction	144	(1)
Who Must File	144	(4)
Filing Status	148	(3)
Citizens Living Abroad	151	(2)
Children under Age 14	153	(1)
Tax Rates for Individuals	154	(1)
Alternative Minimum Tax	154	(4)
Credits That Reduce Your Tax	158	(5)
The Hope Scholarship Credit	163	(1)
The Lifetime Learning Credit	164	(1)
Estimated Tax Payments and Withholding	165	(3)
Employment Taxes on Services by Domestic Employees	168	(1)
Penalties	169	(1)
Year-End Planning for Individuals	170	(17)
Introduction	170	(2)
Filing Status	172	(2)
Income	174	(4)
Adjustments and Deductions	178	(2)
Itemized Deductions	180	(7)
PART II---HOW TO IMPROVE YOUR FINANCIAL FUTURE	187	(44)
Investment Planning	189	(13)
Introduction	189	(1)
Getting Started	189	(13)
Retirement Planning	202	(7)
Introduction	202	(1)
Planning for Retirement Expenditures	202	(1)
Retirement Cash Flow and Inflation	203	(1)
Sources of Retirement Income	203	(6)
Estate and Gift Planning	209	(22)
Introduction	209	(1)
Getting Started	209	(1)
Estate Tax Fundamentals	210	(18)
Installment Payment of Estate Tax	228	(2)
Concerns Regarding Community Property	230	(1)
PART III---TAX STRATEGIES FOR BUSINESSES	231	(55)
Choosing the Right Entity for Your Business	233	(8)
Introduction	233	(1)
Choosing the Proper Business Entity	233	(2)
Types of Businesses	235	(6)
Determining Income, Deductions, and Taxes for Your Business	241	(32)
Introduction	241	(1)
Accounting Periods and Methods	241	(2)
What to Include and What to Deduct from Income	243	(17)
How to Report Business Income	260	(13)
S Corporations	273	(8)
Introduction	273	(1)
Electing S Corporation Status	273	(1)
Advantages of Being an S Corporation	274	(2)
Operating as an S Corporation	276	(3)
State Tax Considerations	279	(2)
Year-End Tax Planning for Businesses	281	(5)
Introduction	281	(1)
Timing of Income and Deductions	281	(1)
Depreciation	282	(1)
Capital Asset Transactions	283	(1)
Charitable Giving	283	(1)
Executive Compensation	283	(1)
Dividends-Received Deduction	284	(1)
Estimated Tax Filing Requirements	285	(1)
State Tax Considerations	285	(1)
Appendices	286	(5)
Tax Calendar	291	(2)
Index	293