Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Clients are entitled to certain tax privileges when they reach old age, according to U.S. News & World Report. Aside from a higher standard deduction, seniors may be entitled to property or school tax deferrals and exemptions. Tax filing requirements will also be less stringent for older people. -- U.S. News & World Report
Tax-loss harvesting is a strategy to recoup losses from a market decline, but it is not a good option if the investments are in an IRA, according to Morningstar. IRA investors will be better off if they consider a Roth conversion when the markets tumble since the cost of converting those assets will be less than if the assets were converted when the market was higher. Another option is to recharacterize Roth assets back to traditional, because they would incur a lower tax bill than on the earlier conversion, completed when the account was worth more. -- Morningstar
Alaska, New Jersey and South Carolina are among the states that charge the lowest gas tax rates, while gas is taxed the highest in Pennsylvania based on estimates provided by the American Petroleum Institute, according to USA Today. States do not receive enough money from the federal government for transportation, and have enacted state fuel taxes as a means to supplement their funding needs. Often the highest taxes are in the Northeast and West Coast, whereas the lowest taxes are in the Southeast and the Central United States. -- USA Today
Clients may be unaware of how they should approach proprietorships and partnerships when doing their taxes, according to The Motley Fool. Taxpayers engaged in a sole proprietorship are required to include business income and other related taxes in their personal tax returns. Those who are in a partnership also have to report their business profits on their personal tax returns, but they need to register with the state and get a federal tax ID number. Clients who entered into a business partnership are required to file a business return to make sure all partners have claimed the business' profit. -- The Motley Fool
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