- Life event Changes, such as Marriage, Divorce
or the Birth of a
- Inflation, Market Growth or Loss
- Business Costs
- Personal Expenses
- Investment Payments
Keep in mind that life insurance is just one tool that — with the
proper planning — you can use to reduce your taxable estate.
Otherwise a policy can increase an estate and the taxes of the
policyholder who passed away.
More tax treats for vacation retreats:
As with your personal residence, you may generally fully deduct one
vacation home’s (or second home’s) mortgage interest and property
taxes. The interest deduction applies to the first $1 million in
mortgage debt used for buying, building or improving one principal
residence and one vacation abode, plus $100,000 home equity
To make the most of the deduction, designate the residence with the
largest total mortgage interest and real estate tax deductions as
your second home.
There are additional tax advantages if you rent out your vacation
home, depending on the number of days you lease it. For instance,
you may benefit from additional tax-free rental income or deductions
for rental-related expenses, such as utilities and maintenance.
Paying for health insurance with retirement funds
Will you be taxed on qualified retirement plan distributions used
for health insurance premiums? Yes, said the IRS in a recent ruling.
In one instance, an employee used qualified retirement plan
distributions to pay health insurance premiums. In another case, a
worker used them to pay medical care expenses. So, though you can
pay such expenses pre-tax from current wages, you cannot enjoy the
same tax break when you pay them from retirement plan distributions.