Eager to assist those suffering from economic hardships this holiday season, Washington Trust has taken a number of steps to put food on the tables of their neighbors in need. Washington Trust's Charitable Foundation has donated $10,000 to local food pantries, and - with the help of its employees and customers - has collected more than 900 pounds of non-perishable food items for the Rhode Island Community Food Bank. We wish you all a happy and healthy holiday season!
After such an overwhelming response to our "Summertime in Rhode Island" photo contest, we are excited to introduce our Holiday Photo Contest!
Share your favorite holiday photo, and you could win a gift basket full of Rhode Island treasures ($100 value). Share a recent photo, or a favorite from the past! Any holiday shot will do, whether it's from the blizzard of 1978 or the 2010 holiday season...the choice is yours!
Each week from December 6th-31st we will select a "judges' favorite" and award the winner. Click here to enter!
With Washington Trust text message banking, you can monitor your finances anytime from anywhere with your cell phone. You can easily and securely check your balances, see recent banking transactions, and more with a simple text. It's available for any cell phone that has text messaging capability. And, it's FREE*
With Text Message Banking you can receive the following information within seconds!
Keep your finances at your fingertips and get the fast answers you need to make financial decisions. Get started today – it's easy! Just login to Personal Online Banking and look for the 'Mobile Banking & Alerts' button to activate.
*Message and data rates may apply from your wireless carrier.
By Norman L. Langlois, Vice President and Fiduciary Tax Officer, The Washington Trust Company, Trust and Estate Services
We aren't sure what next year's tax rates will look like or whether some tax breaks that expired at the end of 2009 will be reinstated. But, whether you prepare your own tax returns or rely on a tax professional, there are some tax moves you can make before year end that may help you reduce your tax liability and increase your refund (or lower the amount you owe Uncle Sam).
Non-Business Energy Credit
This tax benefit expires at the end of 2010. You can get a tax credit for making your home more energy efficient. The credit equals 30% of the cost of adding insulation, installing energy efficient windows, doors, skylights and metal or asphalt roofs that meet certain IRS requirements. This non-business energy credit is also available for costs paid or incurred for "residential energy property expenditures" such as qualified natural gas, propane and oil furnaces. Visit www.IRS.gov for a complete listing of these residential energy property expenditures. The non-business energy credit is limited to $1,500, including any non-business energy credit claimed on your 2009 income tax return.
Roth IRA Conversion
All individuals, including those with income over $100,000, can convert their traditional IRA to a Roth IRA after December 31, 2009. In addition, if you covert before 2011, you can report the taxable income in 2010 or defer it until 2011 and 2012 (50%) each year. In order to soften the impact of the additional income from the Roth conversion, consider accelerating the payment of outstanding charitable pledges to which you have committed.
Itemized Deduction and Personal Exemption Phaseouts
For 2010, your itemized deductions and personal exemptions will not be reduced if your income exceeds certain amounts ($250,200 for Married Filing Jointly individuals). However, this phase-out will return in 2011 under current law.
Timing of Deductible Expenses
If the amount of your itemized deductions is almost the same as your standard deduction ($11,400 for a married couple in 2010), consider accelerating or deferring expenses in one year and claiming the standard deduction in another. For example, paying January's real estate tax payment in December of this year may allow you to itemize deductions in 2010 and still benefit from the standard deduction in 2011.
REQUIRED MINIMUM DISTRIBUTION (RMD) The suspension of the RMD requirement applied to 2009 only. If you are 70½ or older and are required to withdraw monies from your retirement plan (IRA, 401k, etc.), you must take your 2010 required minimum distribution no later than December 31st. There is an exception to this December 31st deadline. If you attained age 70½ during 2010, you have until April 15th of 2011 to withdraw your 2010 RMD. However, if you wait until next year to take the 2010 RMD, you will need to withdraw two distributions in 2011.
Consider Recognizing Losses
Losing money on investments is not enjoyable, but can provide a benefit at tax time. Review your taxable accounts. If you have losses that you don't expect to recover, consider selling the asset(s). The loss will offset recognized capital gains and then reduce other income by up to $3,000. Any losses that are still unused can be carried forward to future years and offset income then. If you decide to re-acquire the asset that produced the loss, beware of the wash sale rules. Basically, they prohibit you from repurchasing the loss-producing asset within 30 days of its sale.
These are some examples of possible tax strategies the can reduce your 2010 taxes. There are other tax rules that expired after 2009 which could be extended by Congress. Contact your tax advisor for further explanation of these moves and for other tax options.
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.
