Getting a jump on 2012 taxes

Parent Cafe
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<p>I am so against this. IMO, it is a sure way to create classes. Warren Buffet, Bill Gates, Jimmy Carter and others are proposing 45% and up for estates over $2M. That’s higher than Obama’s proposal, 45% for estates over $3.5M.</p>

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<p>[Fiscal</a> Cliff: Is the Estate Tax the Solution? | TIME.com](<a href=“http://business.time.com/2012/12/11/can-the-estate-tax-solve-the-fiscal-cliff/]Fiscal”>Fiscal Cliff: Is the Estate Tax the Solution? | TIME.com)</p>

<p>Is this going to be a proposal with so many loopholes that those making the proposal are not going to have their estates taxed? </p>

<p>It is not enough to raise rates on estates. Loopholes have to be closed. Otherwise estate’s like Buffett’s escape the tax…</p>

<p>"Sure, some of this is standard-issue conservative opposition to taxes. But I think many people of all political persuasions recoil when they see headline rates of 55%. We seem to widely feel that nobody, no matter how rich, should have to fork over more than half of their wealth when they die.</p>

<p>On the other hand, it also seems true that many Americans dislike the tax because they don’t understand it. The large deductions of the estate tax mean that few estates end up paying anywhere near those headline rates. And as one of the wealthy signatories on the phone call this morning, Vanguard Group founder Jack Bogle, said, the tax’s best selling point is its*progressiveness. The U.S. is obviously in a fiscal crunch that can’t be solved simply by cutting services, argued Bogle. Taxes will be part of the equation, and “if [the wealthy] don’t pay it, somebody else will,” he said. “We have to explain to people that those who have the most resources to bear the burden have to step up to the plate.”</p>

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<p>Thank you for all of the information contained in this post and I could only scan through most of the posts, and I have a simple question which may already have been discussed, so please excuse me if I missed it. We do a long form for our income taxes every year. When I called to make sure we would have an early January appointment with our CPA, he informed me that the IRS is sending new software for the long form and that will not be available until Feb 1, 2013 at the earliest. Since my H is self employed and business income fluxuates greatly from year to year, it is very hard to estimate our income. We don’t have an appointment until mid Feb. This will be the first time filing a FAFSA form and we are trying to make decisions on bottom line of college costs to pick a college for my D. If we use the 2011 as an estimate for FAFSA, I think it will be much higher than this year’s income. Any suggestions? Someone mentioned Turbotax. Is that going to have the IRS updates any sooner than my CPA? Thanks for this post and thanks for your help.</p>

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<p>TurboTax is saying that they hope that some forms will be ready on January 3, 2013. There’s a lot of stuff in play and it looks like things are going to go down to the wire on tax rules. The main one that affects us is the AMT for 2012.</p>

<p>It is frustrating not being able to plan at a finer level of detail.</p>

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<p>[Tax</a> Topics - Topic 306 Penalty for Underpayment of Estimated Tax](<a href=“http://www.irs.gov/taxtopics/tc306.html]Tax”>Topic No. 306, Penalty for Underpayment of Estimated Tax | Internal Revenue Service)</p>

<p>" Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller."</p>

<p>So taxpayers can plan the estimated taxes a little bit…</p>

<p>If a taxpayer overpays, the taxpayer can ask for a refund or use the overpayment for the next year’s taxes.</p>

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<p>The downside on overwithholding is when your state or the federal government delays paying refunds because of budget issues. Withholdings is only one issue in planning.</p>

<p>I just found that I’ll probably have to send the State of NH a check this year for interest and dividends tax. I normally leave a balance with the state from year to year. This year the balance looks like it won’t be enough. I focused a bit more on optimizing dividend income for the second half of 2012.</p>

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<p>What loopholes? There are no deductions other than the exemption that applies to everyone the way I understand it.</p>

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<p>Perhaps we should just move to Belgium:</p>

<p>[Gerard</a> Depardieu Moves To Belgium Allegedly To Dodge Tax Hikes](<a href=“HuffPost - Breaking News, U.S. and World News | HuffPost”>Gerard Depardieu Moves To Belgium Allegedly To Dodge Tax Hikes | HuffPost The World Post)</p>

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<p>He’s moving from a 75% environment to a 50% environment.</p>

<p>Perhaps Depardieu should move to New Hampshire.</p>

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<p>Sewhappy, see ya.</p>

<p>[Belgium</a> Income Tax - International Taxes 2012](<a href=“http://world.tax-rates.org/belgium/income-tax]Belgium”>Belgium Income Tax - International Taxes 2023)
[Belgium</a> 1% VAT rate increase to 22% in 2013](<a href=“http://www.tmf-vat.com/tmf-in-the-media/belgium-1-vat-rate-increase-to-22-in-2013.html]Belgium”>http://www.tmf-vat.com/tmf-in-the-media/belgium-1-vat-rate-increase-to-22-in-2013.html)
[Belgium</a> capital gains tax rates, and property income tax](<a href=“http://www.globalpropertyguide.com/Europe/Belgium/Taxes-and-Costs]Belgium”>http://www.globalpropertyguide.com/Europe/Belgium/Taxes-and-Costs)
<a href=“http://www.cfe-eutax.org/taxation/inheritance-tax/belgium[/url]”>http://www.cfe-eutax.org/taxation/inheritance-tax/belgium&lt;/a&gt;&lt;/p&gt;

<p>[How</a> To Avoid Estate Taxes With Trusts | Bankrate.com](<a href=“http://www.bankrate.com/finance/taxes/estate-taxes-trusts-1.aspx]How”>How To Avoid Estate Taxes With Trusts)</p>

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<p>Dstark, Yeah! Amazing how good Belgium looks compared to France these days:</p>

<p>*Depardieu’s sudden change of address is widely seen as an effort to dodge the Hollande government’s recent tax hikes, which would tax revenues above one million euros at a whopping rate of 75 percent, reports France24.</p>

<p>According to the Guardian, Nechin has emerged as the ultimate tax haven for a growing number of rich French nationals, including the Mulliez family, which controls a distribution network empire throughout Europe.*</p>

<p>And I’m not really familiar with your sites but this one seems to make it pretty clear the tax climate in Belgium is gentler than in the US, though not hugely. But in comparison with the new French system, pretty hugely, I guess:
<a href=“http://www.nationmaster.com/compare/Belgium/United-States/Taxation[/url]”>http://www.nationmaster.com/compare/Belgium/United-States/Taxation&lt;/a&gt;&lt;/p&gt;

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<p>dstark - Interesting point about making use of irrevocable trusts. Clearly they think it is worth giving up the control. Do they do that for most of their weath or just a small fraction?</p>

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                                         Belgium        USA
Total taxation as % of GDP               45.6 % of GDP  29.6 % of GDP
Total tax wedge > Single-income family   40.2%          19.4%
Total tax wedge > Single worker          55.6%          30%

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<p>That doesn’t seem kinder and gentler to me.</p>

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<p>The estate tax levels that are being discussed are too low.</p>

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<p>Sewhappy, I like your link…</p>

<p>I look at taxes as a percentage of gdp…And the numbers aren’t that close…</p>

<p>If you are sitting on a lot of capital gains from assets held more than 5 years… Belgium is better…</p>

<p>Edit…Ok…notrichenough beat me to it…</p>

<p>Igloo, I don’t know the answer to your question…
The Kennedy’s have used trusts…
The Rockefeller’s…</p>

<p>Doct, what do you think the estate tax should be, really?</p>

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<p>Maybe > 10 million.</p>

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<p>Oh ok…I misunderstood you, doct.</p>

<p>If the Buffett’s of the world can’t get around the estate tax, then the rest of us can pay less.</p>

<p>I think the proposal on its face is disingenuous. People who are skirting the estate tax should keep their mouths shut.</p>

<p>I will change my mind if we get rid of the charity loophole, the dynasty trust, and all the other stuff that is being used to evade the estate tax.</p>

<p>I don’t think the proposals from the “progressives” are going to fly.</p>

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<p>More than 10 million? That’s a lot. For a couple, that’d be $20 million per child. How many people are that wealthy, top 0.5%?</p>

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<p>Well, I don’t know to what extend they used irrevocable trusts. At any rate, changes in the terms for irrevocable trusts can be part of estate tax reform to limit tax benefits.</p>

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<p>[Top</a> 10 Ways to Transfer Wealth](<a href=“http://www.worth.com/index.php/component/content/article/2378]Top”>http://www.worth.com/index.php/component/content/article/2378)</p>

<p>Only 2 estates out of 1,000 pay an estate tax…</p>

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<p>I think this is about right. How we are going to allocate gains affects SS and medicare. The answer is an unknown…</p>

<p>[The</a> Bowles-Simpson Traveling Circus Is Just a Distraction | The Exchange - Yahoo! Finance](<a href=“The Bowles-Simpson Traveling Circus Is Just a Distraction”>The Bowles-Simpson Traveling Circus Is Just a Distraction)</p>

<p><a href=“http://www.washingtonmonthly.com/ten-miles-square/2012/12/raising_the_medicare_eligibili041714.php[/url]”>http://www.washingtonmonthly.com/ten-miles-square/2012/12/raising_the_medicare_eligibili041714.php&lt;/a&gt;&lt;/p&gt;