I was talking advice regarding forward planning. Quite likely some tax preparers, and even more so, accountants, could show most of us ways that we could arrange our personal financial affairs to reduce our tax load in future years ... at least, with regard to the rules governing the income tax system, at present. In addition, I've suggested that every senior should have a home-based business, to allow some nice deductions. I think that that works in the U.S. as well as Canada - get the tax book explaining how to do tax on a small business. Preferably as a consultant rather than peddling goods, with all of the purchase of stuff, ship, store, loss, ship, losing payment hassles so involved. If you can do it on the internet ... ... all that you have to do is keyboard ... then press "Send". And if your ideas are useful to a number of people ... perhaps you could press "Send" once ... ... and have the message go to 50 addresses, all at once: no stationery cost. And 50 fee-payers. Plus if some don't get around to paying ... they don't have goods in hand that cost you money to purchase, ship, store, ship. No postage cost - and your internet connection would be (partially) deductible. Same for computer. Canadians need to be careful, for if they claim certain aspects of their home-based business, e.g mortgage interest and possibly some other less apparently house-related items, they may jeopardize that precious exemption from income tax liability on capital gain on sale of their home that was owner-occupied throughout (i.e., it was partly used for business, so part of the capital gain exemption might be disallowed). For example, just today on Yahoo Canada, regarding personal finance and retirement, one planner with 35 years' experience suggested that he'd suggested to quite a few seniors that, in order to make their RRIF (personal tax-deferred retirement plan) payout deductible, they could make a major loan for investment, using their house as collateral, agreeing with the lender to pay (deductible) interest at the amount of their annual RRIF payout. That is, if their RRIF's annual payout were $6,250.00 and they made a loan of $100,000.00 at 6.25%, the RRIF payout would become tax-free, offset by the deductible interest on the investment loan. He said that he has not had any couple take up that suggestion, everyone being afraid to stick their neck(s) out. Investing in solid, quality stocks, they would likely earn a substantial amount of dividend income ... which, if it were paid by Canadian corporations, would be taxed at a low rate. And could be used to pay a good deal of the interest cost on the loan, thus making a portion of the RRIF payment available for other uses. Maybe have certificates issued, at probably $35.00 - 50.00 each, as extra collateral in case the value of the house goes below the collateral limit and the bank makes a margin call - I have never received one, but always have extra asset available - I don't like a hassle. My bank told me yesterday that my interest rate on Line of Credit loan used for investment would now be at prime, i.e. 5.25% - it was 6.25%, a couple of months ago. I said that, at the earlier rate, I could borrow for almost no net cost. So at the 5.25% rate, I would be ahead on the game, even if I made no capital gain. And I think that the rate of inflation is somewhat higher, lately, which would help all the more! That makes more sense to me than borrowing some of the value of the house ... and spending the money on consumption. I think that some tough days are coming when we'll be glad for every dollar of asset and income that we possess. Good wishes for skillful money management, everyone. Including tax-avoidance plans (but not evasions: jail bait). ole joyful

After I'd bought some equity-based mutual funds, for that fabled "diversification", I decided that I didn't like the fees that I was paying to the managers - darn near as high as the income tax that I paid on on the average rate of gain (but some of the growth was deferred until I sold, of course). By the way ... when you own mutual funds that produce capital gain, in a regular account (not one of the tax-deferred retirement account ones) you must keep track of not only what you paid in the first place, but add all of those payiouts that they reported to you from time to time, usually annually, as the years went along, as they were reinvested. When you sell, your "cost" (for calculating capital gain) wasn't just the amount of your original investment, but included all of those distributions, that were reinvested. If you don't add those (usually annual) reinvested amounts ... you'll be paying tax on them twice - if they're outside of a tax-deferred retirement account! I decided some time ago that I prefer to buy individual stocks myself. On some of the stocks that I own, I used to be taxed at a low rate on dividends, and that rate was reduced even farther, recently. If I earn those dividends in a tax-deferred retirement account, I have no tax liability on the dividends currently, an advantage. But ... when I cash out, I pay tax at regular rate on every dollar ... so I lose the tax advantage that I would currently enjoy if they were taxable now. When I borrow to invest, for solid stocks, aiming at the long term - to fund that retirement - I use the current dividends that the stocks bought with the borrowed funds produce, plus some of the ones earned by the shares that I'd bought with my cash, to pay the interest on the loan ... and that interest is deductible. So I end up paying next to no tax on those dividends, or even gain a bit. When I take money our of my retirement account - taxed on every dollar, at full rate. When I sell some of my regular stocks (the non-tax-deferred-retirement-account ones), I deduct the amount that I invested originally (plus the reinvested dividends, if I have been using a dividend-reinvestment plan) anddeduct that from the amount of the proceeds of sale to find tha capital gain. I pay at regular rate on half of that capital gain ... but I get half of it free of tax. It makes sense, in this country, to keep bonds, GICs, etc. where the number of dollars originally invested won't grow, and the regular earnings are interest, that's taxed at top rate, in those tax-deferred retirement avccounts. Not equities, and certainly not Canadian equities. I'm nearing 80 years of age, and I have about 80% of my assets in equity-based investments ... and that suits me well. Good wishes to you for increasingly wise use of your income ... plus assets. ole joyful

We pay about $1,800, but that is for federal and two states. We pay extra for DH's office return and more for my family farm return (but they also do some year end bookkeeping type stuff for the farm -- bringing the GL up to date, etc. and preparing the W-2 for our one employee, my brother). And we often have other matters to discuss with our CPA thought the year. As far as revocable living trusts are concerned, Snidley is right on. It is pretty simple. My mom put all her assets in such a trust, and the only problem was that since we did it mid year, she got two 1099s from the same sources - on for the interest or dividends paid un the first part of the year in her name and another for the income after the stick or account was transferred. However both were reported on he SSN and it was easy to handle. The next year the 1099s were issued in the name of the trust. All RLT income is reported on her individual return. The RLT's primary (really only) benefit is that it avoids probate (but will not escape estate tax liability-that will depend on the total of her assets at the time of her death, less deductions to her unified credit (for gifts over tie annual exclusion) She also has a separate irrevocable trust from my Dad's estate that must file a tax return as a separate entity. It is more complicated, but even then the tax goes into her personal return. This one avoids probate and the estate taxes were paid when dad died so it will pass to us outright.

We have Vannie and Kelly beat.We will be giving the IRS $18,000.! See what I mean about almost enough to buy a new car? LOL Talk about Ouch! All because we were fortunate enough to inherit oil property from in-laws in 81 and were even more fortunate to be able to sell last year at a very good price.We have paid an average of $3000. every year since in taxes on the oil royalties on 2 producing wells,plus about $1200. a year in property taxes.I think it is a little unfair to have to pay 18% taxes on that one time windfall but that's the way it is.So much for being one of those "rich" Texas oil people! LOL