The Ernst & Young Tax Savers Guide 2002

by Ernst & Young LLP

• ISBN13: 9780471209089
• ISBN10: 0471209082
• Format: Paperback
• Copyright: 2002-01-01
• Publisher: John Wiley & Sons Inc

Summary

Tips and strategies on how to use the new tax law to lower your taxes The Economic Growth and Tax Relief Reconciliation Act of 2001 will affect all taxpayers-today and over the next decade. Do you know how you're going to benefit from the new tax legislation? When you need up-to-the-minute answers to your tax-planning questions, turn to the most reliable and authoritative source: Ernst & Young. From the authors who've brought you The Ernst & Young Tax Guide-The Ernst & Young Tax Saver's Guide 2002 offers unparalleled advice and techniques that will help you lower your taxes. Packed with hundreds of unique, money-saving tips, The Ernst & Young Tax Saver's Guide 2002 gives you the lowdown on the new tax law and the best year-round strategies to save more money on your taxes. "Changes in the Law You Should Know About" covers the Economic Growth and Tax Relief Reconciliation Act of 2001 as well as phased-in laws that may affect future tax years "Tax Savers," "Tax Alerts," and "Tax Organizers" 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 Special mutual fund chapter covers when to make new investments, and how to treat distributions, transfers, and redemptions Charts and tables clarify confusing tax issues Plan now so you don't have to pay later. Put the experience of the nation's leading professional services firm to work for you with The Ernst & Young Tax Saver's Guide 2002.

Author Biography

ERNST & YOUNG LLP is one of the nation’s leading professional services firms, providing tax, assurance, and advisory business services to thousands of individuals as well as domestic and global businesses.

Table of Contents

How to Use This Book	ix
Index to Life-Cycle Events	xi
Changes in the Tax Law You Should Know About	xiii
10 Smart Tax Planning Tips	xviii
Tax Relief for Victims of September 11 Attacks	xix
PART I-TAX STRATEGIES FOR INDIVIDUALS	1	(190)
What You Have to Include as Income	3	(30)
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	11	(1)
Income from Business and Other Investments	11	(4)
Social Security and Other Benefits	15	(6)
Other Income	21	(12)
What You Can Deduct: Exemptions, Adjustments, and Deductions	33	(25)
Introduction	33	(1)
Standard Deduction	34	(1)
Personal and Dependent Exemptions	35	(2)
Individual Retirement Arrangements (IRAs)	37	(1)
Simplified Employee Pensions	38	(1)
Keogh (HR 10) Plans	38	(1)
Simple Retirement Plans	38	(1)
Divorce or Separation	38	(2)
Medical and Dental Expenses	40	(3)
Taxes	43	(1)
Interest Expenses	44	(5)
Charitable Contributions	49	(1)
Casualty and Theft Losses	49	(2)
Moving Expenses	51	(1)
Employee Business Expenses and Other Expenses	52	(5)
Overall Limit on Itemized Deductions	57	(1)
Travel and Entertainment Expenses	58	(17)
Introduction	58	(1)
The 50% Deduction Limitation	58	(2)
Travel and Transportation	60	(15)
Tax Planning and Your Home	75	(14)
Introduction	75	(1)
Rules for Selling Your Home	75	(13)
Clarification of Definition of Principal Place of Business	88	(1)
IRAs, 401(k) Plans, and Other Retirement Plans	89	(17)
Introduction	89	(1)
IRAs	89	(4)
Roth IRAs	93	(2)
Education IRAs	95	(2)
401(k) Plans	97	(1)
Simple Plans	98	(1)
Distributions from IRAs and 401(k) Plans	99	(4)
Simplified Employee Pensions	103	(1)
Keogh (HR 10) Plans	104	(1)
Company Retirement Plans	105	(1)
Charitable Contributions	106	(18)
Introduction	107	(1)
Who Is the Recipient?	107	(3)
Private Foundations	110	(1)
Nondeductible Contributions	111	(1)
Gifts of Property	112	(2)
Bargain Sales	114	(1)
Limits on Deductions	114	(3)
Charitable Remainder Trusts	117	(2)
Carryovers	119	(1)
Record-Keeping and How to Report Charitable Contributions	120	(1)
Cash Contributions	120	(1)
Contributions to Charity Dinners, etc.	121	(1)
Noncash Contributions	122	(2)
Capital Gains and Losses	124	(11)
Introduction	124	(1)
How Capital Gains Are Taxed	124	(4)
Strategies for Selling Securities	128	(3)
Other Opportunities for Individuals	131	(4)
Mutual Funds	135	(12)
Introduction	135	(1)
Dividends	136	(6)
Sale of Mutual Fund Shares	142	(5)
Filing Status and How to Calculate Your Tax	147	(27)
Introduction	147	(1)
Who Must File	147	(4)
Filing Status	151	(3)
Citizens Living Abroad	154	(2)
Children under Age 14	156	(1)
Tax Rates for Individuals	157	(1)
Alternative Minimum Tax	158	(4)
Credits That Reduce Your Tax	162	(5)
The Hope Scholarship Credit	167	(1)
The Lifetime Learning Credit	168	(1)
Estimated Tax Payments and Withholding	169	(3)
Employment Taxes on Services by Domestic Employees	172	(1)
Penalties	173	(1)
Year-End Planning for Individuals	174	(17)
Introduction	174	(2)
Filing Status	176	(2)
Income	178	(4)
Adjustments and Deductions	182	(2)
Itemized Deductions	184	(7)
PART II--HOW TO IMPROVE YOUR FINANCIAL FUTURE	191	(46)
Investment Planning	193	(13)
Introduction	193	(1)
Getting Started	193	(13)
Retirement Planning	206	(7)
Introduction	206	(1)
Planning for Retirement Expenditures	206	(1)
Retirement Cash Flow and Inflation	207	(1)
Sources of Retirement Income	207	(6)
Estate and Gift Planning	213	(24)
Introduction	213	(1)
Getting Started	213	(1)
Estate Tax Fundamentals	214	(19)
Installment Payment of Estate Tax	233	(2)
Concerns Regarding Community Property	235	(2)
PART III--TAX STRATEGIES FOR BUSINESS	237	(56)
Choosing the Right Entity for Your Business	239	(8)
Introduction	239	(1)
Choosing the Property Business Entity	239	(2)
Types of Businesses	241	(6)
Determining Income, Deductions, and Taxes for Your Business	247	(32)
Introduction	247	(1)
Accounting Periods and Methods	247	(2)
What to Include and What to Deduct from Income	249	(18)
How to Report Business Income	267	(12)
S Corporations	279	(8)
Introduction	279	(1)
Electing S Corporation Status	279	(1)
Advantages of Being an S Corporation	280	(2)
Operating as an S Corporation	282	(3)
State Tax Considerations	285	(2)
Year-End Tax Planning for Businesses	287	(6)
Introduction	287	(1)
Timing of Income and Deductions	287	(1)
Depreciation	288	(1)
Capital Asset Transactions	289	(1)
Charitable Giving	289	(1)
Executive Compensation	289	(1)
Dividends-Received Deduction	290	(1)
Estimated Tax Filing Requirements	291	(1)
State Tax Considerations	291	(2)
Appendices	293	(6)
Tax Calendar	299	(2)
Index	301