Latest news with #JeffreyLewis
Yahoo
10-04-2025
- Business
- Yahoo
Hit hard by the AMT? Here are 7 ways to avoid it, or least reduce how much you owe
The alternative minimum tax, or AMT, is pesky. You think you're done with your tax return, only to do the calculations for the AMT and find that you owe more taxes. While it was designed to catch wealthy tax avoiders, the AMT may unwittingly snare some in the middle class these days. Here's what the AMT is and seven ways to avoid an AMT bill, or at least reduce it. The alternative minimum tax was created in 1969 to make sure that wealthy taxpayers weren't abusing loopholes and workarounds to avoid paying taxes. The AMT requires you to figure your taxes in an entirely different way to the regular tax system. It limits certain deductions and uses other means to reduce your income. Even AMT tax rates are different from the standard federal income tax rates, and are either 26 or 28 percent. 'The AMT is effectively a secondary tax that needs to be calculated every year you file taxes,' says Vieje Piauwasdy, head of liquidity at Secfi, a fintech company in San Francisco. 'But due to the AMT rules, the vast majority of Americans do not pay AMT.' Those most likely to be hit? 'High-income families whose taxable income exceeds $1 million,' says Jeffrey Lewis, a financial advisor with Savant Wealth Management in the Rockford, Illinois area. But he says you might still get hit with the AMT even with as little as $200,000 in income, depending on the type of income and deductions you take. Learn more: AMT: What it is and who has to pay it If you're claiming a lot of itemized deductions on Schedule A, you might trigger the AMT, depending on the type of deductions. Also a frequent target: executives who exercise and hold incentive stock options. After they calculate their taxes twice, taxpayers are forced to pay whichever amount is higher. But there are ways to avoid or reduce your tax liability under the AMT rules, and these strategies can be valuable if you're on the hook for the tax or think you might be in any given year. Here are seven strategies to help you eliminate or reduce the AMT. If your income is lumpy or you have some ability to control when you're paid — perhaps if you're a freelancer — you may be able to optimize your tax situation by pushing income into next year. Also try deferring any bonus payments, which may have more flexibility than regular income. Also, investors should consider deferring capital gains. By reducing your adjusted gross income, you may be able to avoid the AMT entirely. Learn more: How to avoid paying capital gains taxes on investments If you contribute to a traditional 401(k) or 403(b) plan, you're saving for retirement with pre-tax dollars, so it's as if that money comes right off the top of your income, reducing your total taxable income. That's great news for reducing or eliminating your AMT liability. You can do the same with a SIMPLE IRA, too, if your employer offers one. The maximum annual 401(k) or 403(b) contribution is $23,500 for 2025, but you can also contribute another $7,500 if you're age 50 or older, meaning you can really slash your taxable income. The contribution limit for a SIMPLE is $16,500, with a $3,500 catch up for those 50 and older. Other ways to reduce income include contributing to a flexible savings account, if offered by your employer, or a health savings account, if you have a qualifying high-deductible health insurance plan. Self-employed people have multiple options to save for retirement while reducing their taxable income. One of the easiest options is to set up a SEP IRA, which allows you to contribute up to 25 percent of your income or $70,000 in 2025, whichever is less. If you own your own one-person business (or two-person, if it's a spouse), a solo 401(k) allows you to make a contribution as an employee — with the same maximums as a traditional 401(k) plan — as well as an employer contribution. Your business can contribute up to 25 percent of its profits, up to an additional $36,500 in 2025. And you can still add on catch-up contributions if you are 50 or older. If you have a high income, want to save a lot and don't have employees, a defined benefit plan could be an option, although these traditional pensions can be expensive to set up and maintain. If you do have employees, consider setting up a SIMPLE IRA to cover yourself and them. By reducing your taxable income with retirement contributions, you're making two smart moves. People with large amounts of capital gains, qualified dividend income or income from certain types of municipal bonds can trigger the AMT, says Kelly Crane, senior vice president and financial advisor for Wealth Enhancement Group in St. Helena, California. Being able to tap tax-free sources of money can help people better manage their tax bills, particularly in retirement. Crane recommends creating future tax-free income by contributing to a Roth IRA or health savings account. The Roth IRA doesn't give you an upfront tax deduction but withdrawals can be completely tax-free in retirement. You're still able to generate income, but it will be safely protected from taxes. You may be able to move some of your income-generating assets inside the Roth or roll over a retirement plan into a Roth IRA. Higher earners may have to use a backdoor Roth IRA. A health savings account (HSA) allows you to save on a pre-tax basis for health costs, meaning you won't pay taxes on any contributions. But withdrawals can be tax free, now or in retirement, and some clever savers also use HSAs as an additional way to save for retirement. Need an advisor? Need expert guidance when it comes to managing your money? Bankrate's AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals. Giving to charity can make you feel good, and Lewis suggests it's a great option for beating the tax man, too, if you're able to itemize your deductions. He mentions donor-advised funds, cash donations and charitable trusts as avenues for giving, though he advises that 'all should be vetted before simply writing a check.' Some moves such as a donor-advised fund actually help you bunch your contributions into one year, offsetting more income that year, even if you don't distribute the money until a later year. Learn more: Charitable contributions: How to get a tax deduction for your donations Crane suggests moving any possible deductions to Schedule C (for businesses or sole proprietors) or Schedule E (for rentals, royalties, partnerships and others). Of course, this move only works if you have a business, rentals or other income that fit those categories. But many higher-earning individuals do have their own business or a sideline for income where it makes sense. A key tactic to avoid the AMT is to be strategic about how and when you exercise any incentive stock options (ISOs), because an ISO exercise can be a big AMT trigger. Be sure to consult with a tax professional before taking the step of exercising stock options. Learn more: 5 tips to find the best tax preparer for you The AMT can be complicated, only adding further complexity to a tax code that already can feel maze-like. In these situations it may be helpful to call in a tax preparer to figure out your tax situation. A skilled tax preparer may well save you much more than it costs to hire them. Sign in to access your portfolio
Asharq Al-Awsat
02-04-2025
- Politics
- Asharq Al-Awsat
Latest North Korean Ship Can Carry Dozens of Missiles, Analysts Say
North Korea's new class of warship can accommodate dozens of vertical launch cells to carry missiles its military has already developed, analysis of a satellite image showed, a step that would give its navy more punch and create an export opportunity. Little is known about the unnamed class of ships being built in the Chongjin and Nampo shipyards. In December, South Korea's military said they would displace about 4,000 tons, somewhat less than half the size of a US Arleigh Burke-class destroyer. Images captured of the ship in Nampo in the last week of March, however, show cavities on its deck large enough to hold more than 50 missiles, depending on their type, said researcher Jeffrey Lewis. "They're pretty big cavities," said Lewis, director of the East Asia Nonproliferation Program at the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies in California. "I would think 32 (missiles) in front and a few fewer in the back would be a very reasonable number. Or it could be a much smaller number of ballistic missiles." Vertical launch systems (VLS) allow ships to carry more missiles, and make launching and reloading easier. Lewis said North Korea had developed several different types of missile that would be compatible with VLS cells, which Pyongyang had not fielded on any previous surface ship. Such types include anti-ship cruise missiles, land attack cruise missiles, air defense missiles and submarine-launched ballistic missiles, he added. The new ships' armament seemed to hew close to South Korean navy standards, said Euan Graham, a senior analyst at the Australian Strategic Policy Institute. "I think we have to take conventional enhancements seriously, because North Korea has limited resources and has invested in nuclear weapons to close the deterrence gap with the Republic of Korea and United States," he added. "So it must fit within their concept of operations, even if the concept appears odd to us." North Korean state media released first photos of the ship in December, when leader Kim Jong Un conducted an inspection. He later made several more visits to the shipyards, where the country said as recently as early March it was also building its first nuclear-powered submarine. "Overwhelmingly powerful warships must serve as a strong nuclear deterrent against hostile forces' habitual 'gunboat diplomacy,'" state media reported Kim as saying. South Korea's national defense ministry did not immediately respond to requests for comment. Lewis said compatibility with a VLS would make the weapons even more attractive as exports for countries that are cut off from, or cannot afford, other arms suppliers. "If you were interested in buying North Korean anti-ship missiles because they were cheap, it would be awfully nice if they came in a tested VLS system," he said. "Quantity has a quality all its own. Those North Korean missiles might not be as good as their Russian counterparts, but they are much, much cheaper." The new ships, although more advanced than others in the North Korean fleet, may not make much of a difference in conflict, said Collin Koh of the S. Rajaratnam School of International Studies in Singapore. Their locations are well-known, they cannot operate far from North Korean shores and are decades behind the technology in South Korean and US warships. But they show Pyongyang is serious about investments to improve its navy, he said. "The North Korean navy is largely traditionally a coastal defense navy," he said. "So they are likely trying to reinvigorate the fleet." Last year Kim stressed the importance of strengthening North Korea's navy. It recently finished fitting out its latest Sinpo-C ballistic missile submarine, according to 38 North, a Washington-based North Korea monitoring program.
Al Arabiya
02-04-2025
- Politics
- Al Arabiya
Latest North Korean ship can carry dozens of missiles: Analysts
North Korea's new class of warship can accommodate dozens of vertical launch cells to carry missiles its military has already developed, analysis of a satellite image showed, a step that would give its navy more punch and create an export opportunity. Little is known about the unnamed class of ships being built in the Chongjin and Nampo shipyards. In December, South Korea's military said they would displace about 4,000 tons, somewhat less than half the size of a US Arleigh Burke-class destroyer. Images captured of the ship in Nampo in the last week of March, however, show cavities on its deck large enough to hold more than 50 missiles, depending on their type, said researcher Jeffrey Lewis. 'They're pretty big cavities,' said Lewis, director of the East Asia Nonproliferation Program at the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies in California. 'I would think 32 (missiles) in front and a few fewer in the back would be a very reasonable number. Or it could be a much smaller number of ballistic missiles.' Vertical launch systems (VLS) allow ships to carry more missiles, and make launching and reloading easier. Lewis said North Korea had developed several different types of missile that would be compatible with VLS cells, which Pyongyang had not fielded on any previous surface ship. Such types include anti-ship cruise missiles, land attack cruise missiles, air defense missiles and submarine-launched ballistic missiles, he added. The new ships' armament seemed to hew close to South Korean navy standards, said Euan Graham, a senior analyst at the Australian Strategic Policy Institute. 'I think we have to take conventional enhancements seriously, because North Korea has limited resources and has invested in nuclear weapons to close the deterrence gap with the Republic of Korea and United States,' he added. 'So it must fit within their concept of operations, even if the concept appears odd to us.' North Korean state media released first photos of the ship in December, when leader Kim Jong Un conducted an inspection. He later made several more visits to the shipyards, where the country said as recently as early March it was also building its first nuclear-powered submarine. 'Overwhelmingly powerful warships must serve as a strong nuclear deterrent against hostile forces' habitual 'gunboat diplomacy,'" state media reported Kim as saying. South Korea's national defense ministry did not immediately respond to requests for comment. Lewis said compatibility with a VLS would make the weapons even more attractive as exports for countries that are cut off from, or cannot afford, other arms suppliers. 'If you were interested in buying North Korean anti-ship missiles because they were cheap, it would be awfully nice if they came in a tested VLS system,' he said. 'Quantity has a quality all its own. Those North Korean missiles might not be as good as their Russian counterparts, but they are much, much cheaper.' The new ships, although more advanced than others in the North Korean fleet, may not make much of a difference in conflict, said Collin Koh of the S. Rajaratnam School of International Studies in Singapore. Their locations are well-known, they cannot operate far from North Korean shores and are decades behind the technology in South Korean and US warships. But they show Pyongyang is serious about investments to improve its navy, he said. 'The North Korean navy is largely traditionally a coastal defense navy,' he said. 'So they are likely trying to reinvigorate the fleet.' Last year Kim stressed the importance of strengthening North Korea's navy. It recently finished fitting out its latest Sinpo-C ballistic missile submarine, according to 38 North, a Washington-based North Korea monitoring program.
Reuters
02-04-2025
- Politics
- Reuters
Latest North Korean ship can carry dozens of missiles, analysts say
SINGAPORE, April 2 (Reuters) - North Korea's new class of warship can accommodate dozens of vertical launch cells to carry missiles its military has already developed, analysis of a satellite image showed, a step that would give its navy more punch and create an export opportunity. Little is known about the unnamed class of ships being built in the Chongjin and Nampo shipyards. In December, South Korea's military said they would displace about 4,000 tons, somewhat less than half the size of a U.S. Arleigh Burke-class destroyer. Images captured of the ship in Nampo in the last week of March, however, show cavities on its deck large enough to hold more than 50 missiles, depending on their type, said researcher Jeffrey Lewis. "They're pretty big cavities," said Lewis, director of the East Asia Nonproliferation Program at the James Martin Center for Nonproliferation Studies at the Middlebury Institute of International Studies in California. "I would think 32 (missiles) in front and a few fewer in the back would be a very reasonable number. Or it could be a much smaller number of ballistic missiles." Vertical launch systems (VLS) allow ships to carry more missiles, and make launching and reloading easier. Lewis said North Korea had developed several different types of missile that would be compatible with VLS cells, which Pyongyang had not fielded on any previous surface ship. Such types include anti-ship cruise missiles, land attack cruise missiles, air defence missiles and submarine-launched ballistic missiles, he added. The new ships' armament seemed to hew close to South Korean navy standards, said Euan Graham, a senior analyst at the Australian Strategic Policy Institute. "I think we have to take conventional enhancements seriously, because North Korea has limited resources and has invested in nuclear weapons to close the deterrence gap with the Republic of Korea and United States," he added. "So it must fit within their concept of operations, even if the concept appears odd to us." North Korean state media released first photos of the ship in December, when leader Kim Jong Un conducted an inspection. He later made several more visits to the shipyards, where the country said as recently as early March it was also building its first nuclear-powered submarine. "Overwhelmingly powerful warships must serve as a strong nuclear deterrent against hostile forces' habitual 'gunboat diplomacy,'" state media reported Kim as saying. South Korea's national defence ministry did not immediately respond to requests for comment. Lewis said compatibility with a VLS would make the weapons even more attractive as exports for countries that are cut off from, or cannot afford, other arms suppliers. "If you were interested in buying North Korean anti-ship missiles because they were cheap, it would be awfully nice if they came in a tested VLS system," he said. "Quantity has a quality all its own. Those North Korean missiles might not be as good as their Russian counterparts, but they are much, much cheaper." The new ships, although more advanced than others in the North Korean fleet, may not make much of a difference in conflict, said Collin Koh of the S. Rajaratnam School of International Studies in Singapore. Their locations are well-known, they cannot operate far from North Korean shores and are decades behind the technology in South Korean and U.S. warships. But they show Pyongyang is serious about investments to improve its navy, he said. "The North Korean navy is largely traditionally a coastal defence navy," he said. "So they are likely trying to reinvigorate the fleet." Last year Kim stressed the importance of strengthening North Korea's navy. It recently finished fitting out its latest Sinpo-C ballistic missile submarine, according to 38 North, a Washington-based North Korea monitoring programme.
