Is High Inflation a Good Time for Roth IRA Conversions?
...Tax and IRA expert Ed Slott says there’s a small positive with higher inflation: greater Roth conversion opportunities...
...Tax and IRA expert Ed Slott says there’s a small positive with higher inflation: greater Roth conversion opportunities...
...these mini breaks might be a good way to see how your spending habits might change...
...The mandatory withdrawals that must commence from tax-deferred accounts at age 72 are called required minimum distributions, not required minimum spending...
...On the other hand, employer stock can introduce risk and complexity into an individual's financial plan. After all, employees have a lot riding on their companies' wherewithal even before employer stock enters the picture, because that's where they earn their paychecks. By owning company stock, employees effectively double down on their bet on the financial health of their firms. Moreover, company stock can introduce tax headaches, especially for people who aren't well versed in the tax treatment of these assets...
...When we asked participants about the ease associated with using their top rule, we found negative correlations between how difficult they perceived practicing the rule to be and their financial well-being. In other words, the easier it was for a person to make these decisions, the more financially well-off they were...
...These seven strategies will help keep you on the ball for this tax season and in preparing for the future... (Ed. note - speak to us if any/all apply to you as these recommendations are general, not specific to you)
...Even if you used non-HSA assets to cover your healthcare expenses and leave your HSA money undisturbed until age 65, you could pull the money out tax-free for any reason, provided you've saved your receipts for the healthcare expenses you covered out of pocket in the years before that...
...Health Savings Accounts (HSAs) offer a further incentive for HDHP enrollment, as they provide a very attractive ‘triple-tax’ set of potential benefits...
...Specifically, the GPO rule applies to individuals who meet three criteria: 1) worked at a federal, state or local government job where they did not pay Social Security taxes; 2) qualified for a pension from that job (that did not pay into Social Security); and 3) are eligible to receive spousal or survivor’s benefits from a spouse who did work in a job covered by Social Security...
...These three maneuvers will tend to deliver a higher tax benefit than writing a check and deducting it, and may even improve your portfolio...
...the key point is that retiree should be aware of the circumstances under which the Windfall Elimination Provision applies to a retiree’s benefits, and the various rules around how their retiree’s total retirement benefit (as well as any family/auxiliary Social Security benefits based on the retiree’s own record) may be impacted by the WEP...
...A QCD is a direct transfer of funds from an IRA custodian, payable to a qualified charity, as described in the QCD provision in the Internal Revenue Code. Amounts distributed as a QCD can be counted toward satisfying your RMD for the year, up to $100,000, and can also be excluded from your taxable income (note-discuss with your financial professional regarding changes to RMD rules in December 2019 and how they might impact any QCD's)...
...the key point is that, although not nearly as sweeping as the Tax Cuts and Jobs Act of 2017, the SECURE Act of 2019 makes numerous updates to the rules around retirement plans in an effort to increase access to employer-sponsored retirement plans...
...Ultimately, the key point is that a QDRO offers some flexibility in planning strategies for both the Participant and the Alternate Payee. While the Shared Payment method must be used if the Participant has already begun payments when the QDRO is implemented, either the Shared Payment or Separate Interest strategy can be chosen if the QDRO is implemented before pension benefits begin...
...Addressing portfolio problem spots often involves a tax bill; here's how to avoid paying extra and possibly even save...
...Here are some of trouble spots that have the potential to catch retirees off guard...
...Regardless, despite the upheaval, itemizing deductions is still a viable strategy to reduce overall tax obligations, and there are still six core deductions available to taxpayers, including: medical expenses (to the extent that they exceed 10% of Adjusted Gross Income); taxes paid to other governmental entities (both state or local municipality taxes as well as foreign governments, but with a $10,000 maximum deduction limit… regardless of filing status!); at least some types of interest paid (for not only mortgage interest – up to a $750,000 principal limit – but for investment purposes as well); charitable giving (but with limits); casualty and theft losses (but, for individuals, only if they were attributable to a Federally declared disaster); and other (miscellaneous-but-not-subject-to-the-2%-of-AGI-floor) deductions (such as gambling losses, among others)...
...Tax-deferred accounts have long been a boon to savers, allowing them to earn additional growth on top of the growth without Uncle Sam taking a share. But tax-deferred doesn’t mean tax-free, and sooner or later, Uncle Sam will eventually take his share, since each and every retirement account is subject to Required Minimum Distribution (RMD) rules at some point...
...While the new deduction will be a powerful way for many business owners to reduce their tax liability, it comes at a price… complexity...
...Ultimately, the key point is that salary deferral limits for individuals apply once across all plans, while employer contributions are limited on a per-plan basis…unless the plans themselves are related employers under the controlled group or affiliated service companies that aggregate that limit back into one as well...