Tip 1: Take Strategic Tax Hits in 2010

It may be best (in the long run) to pay certain taxes this year, instead of avoiding them. The upfront tax hit on rolling your retirement savings into a Roth IRA fits this category perfectly. This is the first year that anyone can get a Roth IRA, regardless of income. Here are the benefits that make a Roth IRA rollover worthwhile this year:

• Future growth on the investment is tax free.
• Only in 2010 can you spread your tax responsibility over a two-year period.
• You can actually undo the conversion if you change your mind. (How great is that?)

It may also be a great year to sell real estate and face possible capital gains taxes. That’s because capital gains taxes will certainly increase in the years to come. What’s more, if you are still suffering from capital losses due to the recovering economy, the dip could potentially offset any capital gains you would face when selling property.

Tip 2: Divide and Conquer Your Assets in 2010

Revocable Living Trusts are not just for the elite. With the federal estate tax revoked, trusts are more essential than ever to protect your family from huge capital gains taxes on hard-earned assets by providing legal “tax shelters” for your benefactors. If you already have a trust, re-evaluate its effectiveness against the current tax laws, which have changed dramatically over the past couple years.

And if you plan on giving a certain amount of your savings to family and charitable organizations eventually, why not starting now? There’s a tax-free allotment every year.

Tip 3: Don’t discredit business deductions and other tax credits.

Business deductions are tricky business. Most self-employed individuals and small business owners could save an alarming amount on taxes by better accounting for their out-of-pocket business expenses like dry cleaning and cell phone charges. Just be honest in not over-estimating some of the more popular deductions, like the size and use of your home office (one of the top reasons business owners are audited). Another big mistake that contractors and freelancers often make is in not subtracting reimbursable expenses from the taxable income they report.

Here’s just some of the latest information about the situation:

• From the Illinois Farm Bureau
• About.com’s Guide to Wills and Estates

• Roth IRA conversions are key for 2010 but they need to be engineered. Dean explained that, “there are about 15 different conversion traps that can occur.”
• If you buy a new home, you can get a direct tax credit. But you have to buy the house by April 30 this year.
• Tax rates for 2009 are relatively low. In 2010, taxes are still low, but Congress is getting its act together. Now’s the time to pay some key taxes so you can keep more of your nest egg.

In part two of the interview, Dean discusses estate plans and how they apply to those of us who don’t consider ourselves wealthy. More on those tips soon.

If you’d like to request an interview with authors Dean Hedeker and Anthony Perrelli, we would be more than happy to arrange it. Let LuAnn know with your RSVP.

LINCOLNSHIRE, IL, FEBRUARY 11, 2010 —CUT YOUR TAX IN 2010 (AND PRESERVE YOUR LEGACY) is released to major booksellers this week. With refreshing candor, CUT YOUR TAX IN 2010 takes on big taxes by exposing how too many of us mistakenly pay thousands of dollars more than the law requires.

CUT YOUR TAX IN 2010 (New Year Publishing; ISBN 978-1-9355470-5-1; US$24.95) by Chicago-area tax and estate planning attorneys Anthony R. Perrelli and Dean R. Hedeker provides the straight talk on why poor estate and retirement planning can cost you dearly.

“This book isn’t about cheating the system,” explains Perrelli.  “The IRS and state governments benefit greatly from the mistakes that people make preserving their assets. Hard-working families are handing over millions of dollars in unnecessary estate and capital gains taxes because of ignorance and poor planning.  Legacies built with blood, sweat and tears are being lost by the second or third generation for no good reason. That’s appalling and it needs to change.”

CUT YOUR TAX IN 2010 shines a spotlight on:

• Why Uncle Sam desperately wants your money
• How to protect your personal and business assets in four smart steps
• What happened with the estate tax this year and why you should care
• How an estate plan can save your family more than taxes

“We didn’t write this book for the aristocratic elite,” adds Hedeker.  “There are teachers, policemen, and small business owners who have worked tirelessly for years to build up every bit of wealth they own. Who did they do it for? Their families. Who will suffer the most from their poor tax planning? Those same families.”

Plus, CUT YOUR TAX IN 2010 provides insights on the capital gains trap, the tax benefits of living trusts, and other tax-saving tips. Many of the techniques discussed in the book are the building blocks of a good estate plan. What do estate planning and tax planning have in common?

“Everything,” says Hedeker. “Without an estate plan, you’re paying too much in taxes on your assets right now. And your family will pay dearly—maybe even more than they can afford—after you’re gone.”

Case in point: the current estate tax debacle in Congress. The current absence of a federal estate tax does not mean that taxpayers are off the hook.  If the tax is reinstated retroactively, families may be slapped with a huge tax bill that they didn’t expect. Those with assets of $1 million or more (that includes a home, stocks, and retirement investments) need to also understand that:

• As of today, the estate tax is still scheduled to be back with a vengeance in 2011, at only a $1 million exemption.
• Any large estates that potentially escape a federal estate tax in 2010 may cause inheritors other tax headaches, particularly in capital gains taxes.
• Most states have their own estate or inheritance taxes. While Illinois’ $2 million estate tax disappeared with the federal tax, there’s no guarantee it won’t be reinstated retroactively.

“People thought that no estate tax in 2010 would make this the ‘year to die,’” says Perrelli. “But that’s not true for many families. It can be a nightmare because estates less than $3.5 million are now subjected to capital gains taxes instead. This changes the way we plan.”

CUT YOUR TAX IN 2010 is available at Amazon.com, Barnes & Noble, Borders, and through other major booksellers. For more information about CUT YOUR TAX IN 2010, visit www.cutyourtaxbook.com or connect with the CUT YOUR TAX community on Facebook and LinkedIn.

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About the Authors

Nationally-renowned estate and tax planning attorneys Dean R. Hedeker and Anthony R. Perrelli are partners at the law firm of Hedeker & Perrelli, Ltd., in suburban northeast Chicago. Hedeker is also a CPA, Registered Financial Consultant, and Fellow of the American Academy of Estate Planning Attorneys (AAEPA). He has co-authored three additional books on estate planning. Perrelli has an MBA and is also a member of the AAEPA. He has been a featured source for Money Magazine, WGN News, and WLS/Chicago. Learn more about Dean Hedeker and Anthony Perrelli at www.cutyourtaxbook.com

 Chicago Tax Attorneys Anthony R. Perrelli and Dean R. Hedeker Reveal How to Avoid the Tax Pitfalls of Poor Estate Planning

LINCOLNSHIRE, IL, FEBRUARY 8, 2010 — A revolutionary new book about cutting taxes is released to major booksellers today. With refreshing candor, CUT YOUR TAX IN 2010 (AND PRESERVE YOUR LEGACY) demystifies how to preserve wealth through tax planning.

CUT YOUR TAX IN 2010 (New Year Publishing; ISBN 978-1-9355470-5-1; US$24.95) by Chicago-area tax and estate planning attorneys Anthony R. Perrelli and Dean R. Hedeker provides the straight talk on why most of us are destined to pay too much in taxes and what you can do to escape this fate.

“A simple misunderstanding of tax laws can permanently handicap a family’s financial future,” explains Perrelli. “Common mistakes in real estate ownership, retirement planning, trust and estate planning, and investing are forcing families to pay thousands of dollars of unexpected and unnecessary taxes.”

 CUT YOUR TAX IN 2010 focuses on teaching those of us who have worked hard to build up a legacy:

• Why Uncle Sam desperately wants your money
• How to protect your personal and business assets in four smart steps
• What happened with the estate tax this year and why you should care
• How an estate plan can save your family more than taxes

 Plus, CUT YOUR TAX IN 2010 provides insights on the capital gains trap, the tax benefits of living trusts, and other tax-saving tips.

“We wrote this book based on the issues we address with clients every day,” adds Hedeker. “Retirees and those working towards retirement have the most to gain with these insights. The book offers a way to start a dialog between your own parents, spouse, and children—across the generations of your family—so that you can begin to work together to preserve your family’s wealth.”

CUT YOUR TAX IN 2010 is available at Amazon.com, Barnes & Noble, Borders, and through other major booksellers. For more information about CUT YOUR TAX IN 2010, join the conversation at Facebook and LinkedIn (the book’s website at www.cutyourtaxbook.com is coming soon).

###

About the Authors

Nationally-renowned estate and tax planning attorneys Dean R. Hedeker and Anthony R. Perrelli are partners at the law firm of Hedeker & Perrelli, Ltd., in suburban northeast Chicago. Hedeker is also a CPA, Registered Financial Consultant, and Fellow of the American Academy of Estate Planning Attorneys (AAEPA). He has co-authored three additional books on estate planning. Perrelli has an MBA and is also a member of the AAEPA. He has been a featured source for Money Magazine, WGN News, and WLS/Chicago. Learn more about Dean Hedeker and Anthony Perrelli at www.cutyourtax.com

• Get a Roth IRA: In 2010, everyone qualifies and everyone can spread the tax burden over a two-year period. And, get this: you can undo it if you change your mind.
• Unload real estate: Capital gains taxes will most likely increase over the next few years, so pay it now if you can by selling burdensome real estate. If you’ve have losses elsewhere from the lagging economy, they can offset your gains.
• Trust in Revocable Living Trusts: With the federal estate tax revoked, trusts are more essential than ever to protect your family from huge capital gains taxes. If you already have a trust, re-evaluate its effectiveness against the current tax laws.
• Start “gifting” your money strategically: Do your family a favor and start gifting small portions of their inheritance now. There’s a tax-free allotment every year.
• Re-evaluate your “valuation”: Your assets are not worth the same now as when you purchased them. Some assets are worth less and others have appreciated in value.

• Any large estates that potentially escape a federal estate tax in 2010 may cause inheritors other tax headaches, particularly in capital gains taxes.
• If the federal estate tax gets reinstated retroactively, the potential for law suits is imminent. Not to mention, many families may end up owing taxes that they simply can’t afford.
• Most states have their own estate or inheritance taxes. While Illinois’ $2 million exemption was repealed with the federal tax, there are not guarantees it won’t come back retroactively as well.
• As of today, the estate tax is still scheduled to be back with a vengeance in 2011, at only a $1 million exemption.