Q: I am finishing my personal tax returns. Can I split my tax refund and send it to different institutions?
A: Absolutely. In what is known as a “split refund” a taxpayer can direct the IRS to pay up to three United States financial institutions.
Q: We hear a lot in the news regarding the health care legislation concerning taxation of benefits and requirements to purchase health insurance for employees or ourselves. Has anything been finalized yet?
A: No. So far, President Obama and Congress have not come to any final decisions or even a draft of the health care bill (law) they intend to enact. Although the speculation on the subject is rampant, taxpayers and business people should keep in mind that the political process that writes the bills is often not indicative of the final law. President Obama and Congress realize that the voters must be content with whatever The President and Congress produce, or else they risk the possibility of being elected out. Business owners should not act on any speculation currently going through Congress, but should instead wait to see what the situation is once the bill arrives for signature on President Obama’s desk.
Q: Can you give some general advice regarding what individual taxpayers can do in order to lessen their federal tax burden?
A: My first advice would be to fund qualified pensions. Most of the proceeds given to pensions are not only tax deferred, but protected form lawsuits and, depending on your plan, may be matched by employer matching contributions. Second, purchasing a home usually qualifies individuals for itemized deductions, lessening their tax burden even further.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors