Rental Income: Here Is The Bad News

Attention owners of rental homes and properties . . . You aren’t going to like one of the tax changes that appears to be on the horizon for 2011 as part of the revenue offset of the recent Small Business Jobs and Credit Act of 2010. The legislation would require an IRS Form 1099 for rental property expense payments.  The provision would subject all recipients of rental income from real estate to the 1099 reporting requirement, with the exception for taxpayers that rent their principal residence on a temporary basis, receive minimal amount of rental income, or would experience a hardship under this provision.  This provision would give the Department of Treasury the authority to determine what constitutes a “minimal amount” of rental income and what constitutes a “hardship.”  According to JCT, this provision would increase revenue by $2.546 billion over 10 years.  (source:  www.gop.gov/bill/111/2/hr5297senateamendment) In simple terms, the bill makes recipients of rental income fall underneath the same information ...

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Tax advice or Investment advice- Which will be more important?

It doesn’t take a financial expert to recognize The United States Government cannot keep spending money at the current rate.  I don’t care whether you are a Republican or Democrat, we have spent ourselves into a problem and it’s time to pay the piper.  The question becomes with tax increases a foregone conclusion, which will be more important to you over the next 25 years, how well manage your assets or how well you manage your taxes. For those of you reading this that think taxes surely can’t impact me that much, consider the following – if you double a dollar per day for 20 years you will have a little over 1 million dollars.  Take the same dollar and apply a 28% tax before you double it each time and you will be left with just over $50,000.  Ouch!  Consider the following tax increase next year alone! Capital Gains tax rates will be increasing 33% Tax on Dividend income ...

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