More On Tax Planningfrom The Advisor's Professional Library
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- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
Congress's original intention when it created the Alternative Minimum Tax, was to make sure that the wealthiest Americans weren't able to combine so many exemptions or deductions that they ended up paying little or no income taxes. In a study released today, the Tax Foundation lays out a revenue-neutral plan to restore the AMT to its original role.
The plan cuts tax rates for low- and middle-income groups, who were never the intended targets of the law, making the overall distribution of the tax burden more "progressive," i.e., shifting the tax burden up the income scale. The majority of individuals in every income group less than $500,000 would get a tax cut.
The report, Tax Foundation Special Report, No. 157, by economist
Gerald Prante calls for four tax-cutting provisions and four expansions of taxable income that offset each other, keeping revenue the same. This proposed solution would be in line with new rules in the House of Representatives requiring that any tax changes produce no change in revenue.
The full study is available here.