News Briefs

December 2006

The Latest on Changes in Tax Laws for Individuals

How will this tax year differ from last year? The Internal Revenue Service Web site provides a rundown of tax law changes for individuals in 2006 and beyond. Topics covered include changes to rules on charitable contributions; the higher exemption amounts for the alternative minimum tax; and an expanded list of vehicles that qualify for the Alternative Motor Vehicle Credit. More information can be found here.    

Donations and IRAs

A provision of the Pension Protection Act allows clients to make cash donations to many charities straight out of a traditional or Roth IRA and get a 100% deduction on the distribution. Clients who are over 70 ½ can use this strategy to get a tax deduction and make a contribution to a good cause. A SmartMoney article describes how it works here 

November 2006

Tax Changes in Pension Act

The new pension act contains many provisions that will affect various facets of an individuals’ tax season planning. As an introduction to the changes, a article describes 10 important new provisions, including automatic enrollment, easier rollovers to Roth IRAs and changes for charitable donations. To read more, go here


An Investment Perspective offers an investment-minded perspective on the new law, analyzing the impact for investors of several of the act's provisions. The article covers IRAs, defined benefit plans, investment advice and insurance. To read it, go here.


The Impact on 529 Plans

Among many other changes, the Pension Protection Act made permanent the federal tax exclusion for qualified withdrawals from a Section 529 plan. This means that an individual who was uncertain about this option's future for younger children can now confidently add it to their college planning. For more information on the provision and on 529 plans, go here.


New Rules for IRAs

The law affects many aspects of IRAs, including provisions for nonspouse beneficiaries and changes in some contribution limits and some cost-of-living adjustments, according to an article on the Wolters Kluwer Financial Services Web site. To read it, go here.


Changes in Charitable Giving Rules

The act made many changes in the charitable giving area that are noted in other items in this newsletter. An additional one that might be overlooked is that, beginning in 2007, individuals will have new requirements for documenting the value of household goods or other items they give to charities. A Realty Times article describes the penalties for those who don't have proof of value and provides a link for the appropriate IRS forms and publications. It can be found here.