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Path: utzoo!utcs!lsuc!pesnta!hplabs!hp-pcd!john
From: john@hp-pcd.UUCP (john)
Newsgroups: net.taxes
Subject: Re: Income Averaging
Message-ID: <53400012@hp-pcd.UUCP>
Date: Sat, 9-Feb-85 12:38:00 EST
Article-I.D.: hp-pcd.53400012
Posted: Sat Feb  9 12:38:00 1985
Date-Received: Thu, 21-Feb-85 02:55:54 EST
References: <1988@sun.UUCP>
Organization: Hewlett-Packard - Corvallis, OR
Lines: 14
Nf-ID: #R:sun:-198800:hp-pcd:53400012:000:705
Nf-From: hp-pcd!john    Feb 16 09:38:00 1985

<<<
  Income averaging only works on rising incomes and does not help if your
income suddenly drops. There are other ways that could be used in those
situations but they all require preplanning. Many Tax shelters work by
pushing todays income into tomorrows tax year so if you do it enough you
may eventually find a year where your tax rate is low enough to pull money
out of a shelter. I have heard of people who are saving up to go to school
use IRA's in the same way. The 10% penalty on top of a 0% tax rate is a lot
less than paying in the year that the money is earned. I would not be surprised
if the penalty rate were incresed in order to stop this type of thing.


John Eaton
!hplabs!hp-pcd!john