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J.K. Lasser's Your Income Tax Professional Edition 2017 by J.K. Lasser Institute

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Key Tax Numbers for 2016

Tax-Saving Oppurtunities

Objective— Explanation—
Realizing long-term capital gains Long-term capital gains are taxed at lower rates than short-term gains and regular income. See Chapter 5 for basic capital gain rules. See Chapter 30 and Chapter 31 for discussions of special investment situations.
Earning qualifying dividends Qualified dividends (4.2) are subject to the reduced tax rates for long-term capital gains.
Earning tax-free income

You can earn tax-free income by—

  1. Investing in tax-exempt securities. However, before you invest, determine whether the tax-free return will exceed the after-tax return of taxed income (30.10).
  2. Taking a position in a company that pays tax-free fringe benefits, such as health and life insurance protection. For a complete discussion of tax-free fringe benefits, See Chapter 3.
  3. Seeking tax-free education benefits with scholarship arrangements, qualified tuition programs and Coverdell ESAs; See Chapter 33.
  4. Taking a position overseas to earn excludable foreign earned income; See Chapter 36.
  5. Investing in Roth IRAs; See Chapter 8.
Deferring income

You can defer income to years when you will pay less tax through—

  1. Deferred pay plans, which are discussed in Chapter 2.
  2. Qualified retirement plans such as 401(k) ...

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