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Author: tfsc Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Money Award Date: 6/8/2001 3:57 PM
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In a couple of weeks I will be receiving an education teaching award in the amount of $25,000. Any ideas on what I can do to minimize the taxes I will need to pay?
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Author: gailkay One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51643 of 121114
Subject: Re: Money Award Date: 6/8/2001 4:41 PM
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In a couple of weeks I will be receiving an education teaching award in the amount of $25,000. Any ideas on what I can do to minimize the taxes I will need to pay?

Unfortunately, the first idea I have means that you have to give away the award...probably not what you had in mind.

Otherwise, you can make charitable contributions but remember (in general) you have to give away $3 to reduce your tax by $1.

You could use the proceeds to fund a deductible IRA that you couldn't otherwise fund - assuming you meet the rules for deductible IRAs.

If you or your spouse are (also) self-employed you might be able to fund a SEP-IRA, Simple IRA or other qualified plan.

Maybe someone else has some other ideas.

Gail

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51669 of 121114
Subject: Re: Money Award Date: 6/9/2001 6:44 PM
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Don't know if this would fly, but gift $10,000 to your wife. That would reduce things a little. (Remember that from a sceen in "Shawshank Redemption").

JLC

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Author: acm4tax Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51681 of 121114
Subject: Re: Money Award Date: 6/10/2001 4:19 AM
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Don't know if this would fly, but gift $10,000 to your wife.

Sorry Gifts to your spouse or anyone else for that matter do not reduce your taxable income.

Gifts reduce your assets that may reduce your estate tax. In other words, gifts may only help if you are dead. I don't think this was an alternative the recipient of the award was considering.



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