Get Cracking on Flex-Plan Spending
It’s time to review your employee benefits and decide how much money to earmark for your flexible spending account in 2011. Flex plans let you set aside a portion of your salary before taxes to pay for dependent-care costs and medical expenses not covered by insurance, lowering next year’s tax bill in the process.
Salary that goes into a flex account dodges federal income and Social Security taxes; in most states, it skips state income taxes, too. And flex-account distributions are tax-free. Despite the valuable tax breaks, only about one-third of eligible workers take advantage of these set-aside accounts. Learn more: Trim Health-Care Costs with Tax-Free Savings.
Last Chance for a Tax-Free Computer
Is your college student nagging you for a new computer? If you’d like to oblige but think you can’t afford to, you might be surprised to learn that you may have a ready stash of savings you can use to buy that gift -- if you have a 529 college-savings plan.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Normally, you must spend your 529 funds on college tuition and other qualified expenses. The earnings portion of distributions not used for qualified college expenses is taxed and slapped with a 10% penalty.
But an expiring tax break allows you to use money in your 529 college-savings plan tax-free and penalty-free to purchase a computer for students enrolled in college or another post-high school institution. The tax break, which is available through the end of 2010, also applies to computer software and Internet service. To qualify for the tax break, the software must be primarily educational. Sports or gaming software doesn’t qualify.
This is also your last chance to use funds in a Coverdell Education Savings account to pay for private elementary and high school tuition. Starting next year, only college-related costs will qualify for tax-free distributions. So if you want to pay next spring’s tuition bill from your Coverdell funds, write the check by December 31. Learn more: Cash In on Expiring Tax Breaks for Education Savings.
-
Will President Trump's Medicare Executive Order Raise Drug Prices?President Trump rescinded a Biden-era Executive Order that would have lowered the copays for some drugs to $2 for Medicare enrollees.
-
Stock Market Today: Dow Adds 538 Points on First Trading Day of Second Trump AdministrationStocks rise while the White House issues a historic series of executive orders.
-
Gov. Hochul Vows to Deliver $1 Billion in Tax Relief to New YorkersState Tax The proposed tax cuts would benefit New York middle-class families.
-
Maryland Property Tax Assessment: What It Means for YouState Tax Amid a growing deficit, Maryland property values are rising. Here’s more of what to know.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
New Law Delivers Tax Breaks to Natural Disaster Victims, But Is It Enough?Tax Relief The legislation provides critical tax relief to thousands of natural disaster victims across the country.
-
Five Tax-Savvy Ways To Donate This Holiday SeasonCharitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
-
Can Tariffs Make Childcare More Affordable?Tariffs President-elect Trump suggested tariffs can address the childcare crisis, but economists are doubtful.
