Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Clients who converted their traditional IRA into a Roth account last year have until Oct. 18 this year to undo their decision and recover the money they lost in the process, according to Kiplinger. Certain timing rules apply, naturally. Those who already filed their tax return for 2015 and decided to undo their IRA conversion will need to amend the return to retrieve the tax payments for the converted amount.
Millennials are advised to do their due diligence when preparing their tax returns to avoid costly mistakes and save on taxes, according to Fox Business. They may qualify for tax deductions for moving and other expenses related to their business activity and should consider using IT-enabled services to file their taxes to minimize the risk of making errors. Millennials should be honest in declaring their income and other figures in their returns, and include their earnings from online sales. -- Fox Business
Building a swimming pool can be a tax-deductible expense if it will be used for medical purposes, according to MarketWatch. Clients can also deduct the cost of an abortion if the procedure is approved as a medical expense. Other expenses that surprisingly can be tax deductible are gambling losses, cost of buying service dogs and dog food, and gender confirmation surgery. -- MarketWatch
Although the taxable income brackets for couples filing separate returns are exactly 50% of the brackets for joint filers, couples may face a lower tax bill if they file separately, according to MoneyWatch. For example, a couple with $100,000 in adjusted gross income will not be allowed to make a tax deduction for $10,000 in unreimbursed out-of-pocket medical expenses incurred by a spouse. Separate filing is a better option than filing joint returns if a spouse can claim substantial miscellaneous deductions or the couples want more financial protection. -- MoneyWatch