Not all Trusts are Trustworthy

July 21, 2012

There’s something about the word trust that makes people feel secure. In the financial world, however, the use of that word can be deceiving. Each year the IRS investigates fraudulent trust schemes that promise participants they will reduce or eliminate income taxes. In recent years, convictions for such schemes have increased. The convictions illustrate that many trust […]

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The Final Frontier

July 20, 2012

Who – if anyone – gets to tax transactions that take place in cyberspace? The question becomes more pressing as,, and similar Web sites become a more popular way to buy everything. The Internet Tax Freedom Act (ITFA) enacted in 1998, puts a three-year moratorium on the imposition of new taxes on […]

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Gimme Shelter

July 19, 2012

At a time when few things are certain a death and taxes, techniques that freeze the value of appreciating assets for estate tax purposes can be an important way for CPAs to help clients save money. One such technique is the qualified personal residence trust (QPRT). Because the regulations governing these trusts have changed since […]

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The Safe-Harbor Solution

July 18, 2012

Effective as of 1999, the Small Business Job Protection Act of 1996 introduced safe-harbor formulas for 401(k) plans that eliminate the need for companies to perform annual nondiscrimination testing. These changes should allow small employers to contribute higher amounts on behalf of highly compensated employees (HCEs). Nondiscrimination tests effectively eliminate the ability of many small […]

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Watch Out for IRA Rules

July 17, 2012

If you’ve been faithfully putting money into your Individual Retirement Account and other retirement plans, congratulate yourself. However, if you’re currently contemplating retirement, you’ll learn that saving diligently is only half of the equation. One of the first decisions you need to make is whether to tinker with your present IRA. In addition to the traditional IRA, […]

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Inscrutable Index Funds

July 14, 2012

With the stock market’s rise, index funds have grown to gigantic proportions. But they aren’t right for all investors. By understanding the investment-management process of index funds CPAs will be better able to advise their clients or employers. An index fund is a mutual fund that buys the same securities as those in an index. […]

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Active Investment Strategies

July 12, 2012

To actively approach the market, CPAs should follow these strategies:  Develop a specific investment goal for your client or employer and establish an investment policy that governs the management of the portfolio. Review the prospectus of any potential or existing investment to help determine whether the fund’s investment policy matches your understanding and expectations. If the prospectus does […]

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The Question to Outperform

July 11, 2012

The debate over the efficiency of financial markets leaves investors – and those who advise them – to answer the question: Can active portfolio managers exploit market inefficiencies enough to overcome the costs of their efforts? For those who answer no, the best option is to own passively managed funds. Mutual funds incur five types of expenses: […]

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Tax-Exempts and Fiduciaries

July 10, 2012

For CPAs who work for or advise tax-exempt entities such as charities, retirement Plans or other nonprofit organizations, it’s important to be aware that the client has fiduciary responsibility to manage the organization’s assets with care and prudence. Additional factors to keep in mind: If the entity does not have a well-defined investment policy, then the organization’s investment […]

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Tax Planning Tips for 2000 and Beyond

July 10, 2012

It’s important to keep in mind simple tax strategies when preparing for tax season. Many of these strategies, however, can be implemented at any time during the year. 1. Contribute to an IRA – and do it early in the year. If a taxpayer contributes $2,000 annually to an IRA at the beginning of the […]

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