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Book Description

Tax Insight: For Tax Year 2012 will teach you to take control of life's biggest expense—taxes. In your lifetime, you will spend more money on taxes than on anything else. Despite that fact, you likely know the current prices of movies and milk but don't know what your marginal tax rate is. You know where to get the cheapest gallon of gas to save a buck or two, but you don't give a thought to the tax strategies you should be using right now that would save you thousands. Why? Is it too complicated and confusing? Too unpleasant? In Tax Insight, tax expert Casey Murdock opens up the world of taxes with amazing clarity and simplicity. As you will discover, you have within reach numerous ways to reduce your taxes. With everyday language and real-life examples, Tax Insight will give you the keys to minimizing your tax burden.

This book contains information you need even if you have a tax advisor or use a program like TurboTax. Tax professionals are busy and sometimes too cautious, and programs often miss opportunities for you to save money. It's also for those of all ages and income levels, including business owners. Tax Insight:

  • Breaks down the key components of taxes with ease and simplicity.

  • Provides a roadmap to paying as little tax as possible.

  • Helps you know if you should do it yourself or hire a professional.

  • While there are many encyclopedic books on taxes—like J.K. Lasser's Your Taxes—there aren't nearly enough that describe the tax code in plain language. Far more than a rehash of impenetrable IRS "help" documents, Tax Insights is organized the way most people think and presents ideas in clear, simple language. If you buy this book and take advantage of its advice, you will save money.

    What you'll learn

    This book will help you:

  • Avoid paying even a penny more in taxes than you should.

  • Avoid common tax strategies that could actually cost you more than they save.

  • Capture all of the deductions and credits that you are due.

  • Know whether to file your own return or hire a tax professional.

  • Utilize the entire year to implement tax-reducing strategies.

  • Understand the key components of the tax return and how they work together.

  • Prepare for or survive an audit

  • Use real estate or a small business to reduce your tax bill

  • Who this book is for

    Tax Insight: For Tax Year 2012 is for the frustrated taxpayer—the taxpayer who is frustrated by paying too much, frustrated by the complexity of the tax code, or frustrated because their CPA isn't proactively helping them pay fewer taxes. Tax Insight is the perfect book for the person who is looking for a straightforward, simple explanation of the tax-saving strategies that are within reach. In an easy-to-read, easy-to-understand narrative, Tax Insight gives readers a thorough understanding of the tax strategies that apply to them and the information they need to put those strategies to work.

    Table of Contents

    1. Titlepage
    2. Dedication
    3. Contents
    4. Foreword
    5. About the Author
    6. Acknowledgments
    7. Introduction
    8. Part I: The Foundation
      1. Chapter 1: The Tax Code Demystified
        1. The Tax Code—Boiled Down
        2. The Key Components of the Tax Formula
      2. Chapter 2: Key Components Defined
        1. Income
        2. Deductions (Adjustments to Income) and AGI
        3. Deductions (Standard or Itemized)
        4. Exemptions
        5. Taxable Income
        6. Income Tax, Tax Brackets, and Marginal Rates vs. Effective Tax Rates
        7. The Alternative Minimum Tax (AMT)
        8. Credits (Non-Refundable)
        9. Other Taxes
        10. Credits (Refundable)
        11. The Calculation Is Complete
      3. Chapter 3: Income
        1. Ordinary Income
        2. Tax-Exempt Income (No Tax)
        3. Preferred Income (Lower Than Normal Tax Rates)
        4. Deferred Income (Eventually Taxed, but Not Currently)
        5. Potentially or Partially Taxed Income (Including Social Security)
        6. Penalized Income (Higher Than Normal Tax Rates)
        7. Earned and Unearned Income
        8. Passive Income
        9. Unleash the Power of Warren Buffet’s “Secret”
      4. Chapter 4: Dependents and Filing Status
      5. Chapter 5: The Tax Code Is Rigged
        1. These Three Things
        2. Phase-Outs: The Devil in Disguise
        3. Turn It on Its Head
    9. Part II: Ordinary Income
      1. Chapter 6: Employment Income
        1. Claim Employee Business Expenses
        2. Expenses That Can Be Claimed and How to Claim Them
        3. Deduct Insurance Premiums Pre-Tax
        4. Defer or Postpone Income
      2. Chapter 7: Retirement Income
        1. Social Security Income
        2. Pensions and Annuities
        3. Retirement Accounts (the Non-Roth Variety) and Required Minimum Distributions
      3. Chapter 8: Other Sources of Ordinary Income
        1. State Tax Refunds
        2. Alimony
        3. Debt Forgiveness
        4. Gambling Winnings and Losses
        5. Royalties
        6. Awards for Legal Damages
        7. Unemployment Income
        8. Bartering (Trading)
      4. Chapter 9: Tax-Free “Unordinary” Income from Non-Investment Sources
        1. Gifts and Inheritance
        2. Scholarships and Grants
        3. Insurance Proceeds
        4. Lawsuit Proceeds
    10. Part III: Investment Income and Deductions
      1. Chapter 10: Tax-Free Investment Income
        1. State and Municipal Bond Interest
        2. Roth Retirement Accounts
        3. Home Ownership
      2. Chapter 11: Taxable Investment Income
        1. Capital Gains Income
        2. Dividend Income
        3. Interest Income
        4. Mutual Funds: Mutually Confusing Taxation
        5. Limited Partnerships and REITs
      3. Chapter 12: Deductions from Investment Income
        1. Investment Interest
        2. Withdrawal Penalties
        3. Foreign Tax Credit
        4. Miscellaneous Deductions
        5. Professional Trader Status
      4. Chapter 13: Education Investment Strategies
        1. 529 Plans and Qualified Tuition Programs
        2. Coverdell Educational Savings Accounts
        3. Education Savings Bonds
        4. IRAs and Roth IRAs
        5. A Word of Caution (and Coordination)
        6. Gifting Appreciated Items
      5. Chapter 14: Retirement Investment Strategies—The Basics
        1. Tax-Deductible Contributions
        2. Tax-Deferred Growth
        3. Types of Deductible Plans Available
        4. Penalties for Early Withdrawals
        5. A More Subtle Penalty
        6. Retirement Savings Contribution Credit
      6. Chapter 15: Retirement Investment Strategies—Alternatives
        1. Self-Directed IRA Accounts
        2. The Secret of Health Savings Accounts
        3. Deferred Compensation and Defined Benefit Plans (Pensions)
        4. Livestock, Agriculture, and Land
    11. Part IV: Business Income and Deductions
      1. Chapter 16: Business Taxation
        1. Income and Expense Recognition
        2. Losses and Hobby Rules
      2. Chapter 17: Business Use of the Home
        1. First Things First
        2. Determining Whether Your “Business Use” Qualifies for the BUH Deduction
        3. Which Expenses You Can Deduct
        4. Claiming the BUH Deduction
        5. Your BUH Deduction May Be Limited
        6. Warning I: The BUH Deduction May Haunt You Later
        7. Warning II: The BUH Deduction Will Increase Your Chances of an Audit
      3. Chapter 18: Travel Expenses
        1. Mileage and Vehicle Expenses
        2. Record Keeping and Audit Risk
        3. Travel Away from Home
      4. Chapter 19: Meals, Entertainment, and Gifts
        1. Meals
        2. Entertainment
        3. Gifts
      5. Chapter 20: Employee Benefits
        1. Fringe Benefits
        2. Educational Assistance Programs
        3. Medical Expenses and Health Insurance
      6. Chapter 21: Employing Family Members
        1. Employing Children
        2. Employing Your Spouse
        3. Employing Your Parents
      7. Chapter 22: Depreciation
        1. What Depreciation Is and How It Works
        2. Bonus Depreciation
        3. The Section 179 Deduction
        4. What Happens When You Sell a Depreciated Item
    12. Part V: Real Estate Income and Deductions
      1. Chapter 23: Real Estate Losses
        1. Treatment of Passive Losses
        2. Active Participation Rules
        3. The Real Estate Professional Designation
      2. Chapter 24: Real Estate Income and Deductions
        1. Rent Recognition Rules
        2. Allowable Expenses
        3. Repairs vs. Improvements
        4. Depreciation
        5. Travel
        6. Self-Renting
      3. Chapter 25: Second Homes and Vacation Rentals
        1. Tax-Free Income and Home Swapping
        2. Personal Use vs. Fair Market Rents
        3. Pro-rated Deductions
    13. Part VI: Personal Expenses, Deductions, and Credits
      1. Chapter 26: Medical and Dental Expenses
        1. Itemized Medical Deductions
        2. Health Savings Accounts (HSAs)
        3. Health Care Coverage Tax and Credit
        4. Qualified Medical Expenses
      2. Chapter 27: Your Residence
        1. The Mortgage Interest Deduction
        2. The Property Tax Deduction
        3. Credits Related to Energy Efficiency
        4. Deductions for Home Improvements for the Disabled
        5. Home Sale Exemption from Capital Gains
        6. Foreclosures and Short Sales
      3. Chapter 28: Your Children
        1. The Child Tax Credit (Non-Refundable)
        2. The Additional Child Tax Credit (Refundable)
        3. The Child Care Credit
        4. The Adoption Credit
      4. Chapter 29: Charitable Contributions
        1. Gifts of Money
        2. Non-Money Gifts
        3. Gifts of Service
        4. Gifts of Appreciated Assets—the Best Way to Give (from a Tax Perspective)
        5. Maximizing the Tax Benefit of Your Gifts
      5. Chapter 30: Education Expenses
        1. The Tuition and Fees Deduction
        2. Education as a Business Deduction
        3. The American Opportunity Credit
        4. The Lifetime Learning Credit
        5. The Student Loan Interest Deduction
        6. Student Loan Debt Forgiveness
    14. Part VII: Other Important Things to Know
      1. Chapter 31: The Alternative Minimum Tax
      2. Chapter 32: Penalties and Interest
        1. Failure to File Penalty
        2. Failure to Pay Penalty
        3. Underpayment of Estimated Tax Penalty
        4. Interest
        5. Early Withdrawal from Retirement Accounts
        6. Unqualified Withdrawal from a Health Savings Account (HSA)
        7. Excess Contribution to Retirement Accounts
        8. Penalty Abatement
      3. Chapter 33: Do It Yourself, or Hire a Professional?
        1. The Limits of the Harvest
        2. Enjoying Your Harvest’s Bounty
      4. Chapter 34: Tax Implications of Health Care Reform
        1. The Effect on Individuals
        2. The Effect on Businesses
        3. The Effect on Health Insurance Plans
    15. Index