Not All Recharacterizations Have Gone Away

You may recall that the ability to recharacterize a Roth IRA conversion went away as part of the tax cut that passed in 2017. It wasn’t a major sticking point of the legislation, but it did create some concern about how it could affect those saving for retirement. However, I want to remind you that only recharacterization of Roth IRA conversions went away and that the ability to recharacterize other types of transactions still remains a possibility. For example, if you made a Roth IRA contribution but did not realize that you were above the income threshold to do so, Continue reading Not All Recharacterizations Have Gone Away

Have You Thought About a Roth Conversion?

With the stock market appearing to head towards a–dare I say it–recession, now might seem like an odd time to talk about converting your traditional IRA to a Roth IRA. However, converting when the markets are low actually might be the best time to do so. When it comes to Roth IRA conversions, the tax bill for doing so is based on the value of your traditional IRA assets. Thus, when the markets are down, there’s a really good chance your IRA assets are down too, which means a lower tax number. As for the actual tax hit, as you Continue reading Have You Thought About a Roth Conversion?

Money In, Money Out: The SECURE Act and Age Restriction Changes

If you’ve been reading up on the SECURE Act, then you are probably well aware of the fact that it eliminated the age restriction on contributions to traditional IRAs. This is a big deal for those Americans planning to work into their 70s by allowing them to put money into their traditional IRAs while they continue working. It should be noted, though, that removal of the age restriction does not remove required minimum distribution (RMD) age requirements. That means that people will still need to begin taking RMDs from a traditional IRA at 72, even as they are still making Continue reading Money In, Money Out: The SECURE Act and Age Restriction Changes

Be Sure to Keep Inherited IRAs and Your Own IRAs Separated

If you have more than one IRA, you can aggregate the required minimum distributions (RMDs) and take them from one IRA. Most IRA owners are familiar with this allowance. However, not everyone is aware of that fact that you cannot include inherited IRAs as part of that aggregation. It can be easy to overlook. It should be noted though, that if you inherited multiple IRAs of the same type (Roth vs. traditional) from the same person, you can aggregate the RMDs from those. In short, if you have multiple IRAs, one of which is an inherited IRA, you will need Continue reading Be Sure to Keep Inherited IRAs and Your Own IRAs Separated

Small Business Owner? Don’t Forgo Retirement Saving

If you are a freelancer or small business owner, you probably have a lot to worry about when it comes to your work or business. You have expenses to track, work to do, clients to satisfy, and maybe an employee or two to oversee. With all that, it can be easy to forget about saving for retirement. Not only that, but you don’t have the reminders regarding opening a retirement account or automatic retirement account enrollment that are standards in larger business and corporations. Thus, it’s imperative that you take it upon yourself to think about and take the required Continue reading Small Business Owner? Don’t Forgo Retirement Saving

Time is Running Out to Make an IRA Conversion This Year

Have you been considering converting a traditional IRA to a Roth IRA? Well, if you want to do so and have the associated taxes count in 2018, you only have three (3) weeks left to do so. IRA conversions must be done by the end of the calendar year if you want them to count for 2018, which is particularly important if you want to take advantage of 2018 tax rates. If you do decide you want to make a conversion, make sure that it’s definitely something you want to do as recharacterizations are no longer allowed. The tax reform Continue reading Time is Running Out to Make an IRA Conversion This Year

Roth Vs. Traditional IRA: Thinking Long-Term

When considering whether a traditional IRA or a Roth IRA is right for you, you will most likely focus on whether you want to pay taxes on your retirement money now or in the future. That’s very important, but when you think about taxes you need to make sure that you focus on more than just paying now versus in the future; you need to think about what that decision could look like in regards to your goals. You will want to consider various scenarios regarding your retirement. For example, you may want to consider a scenario where you work Continue reading Roth Vs. Traditional IRA: Thinking Long-Term

Don’t Let Taxes Surprise You in Retirement

Just because you are retired and no longer working, doesn’t mean the taxman won’t come looking for you. If you’ve been saving your retirement money in a traditional IRA, then your withdrawals from that account will be taxed when you take them. After all, a traditional IRA allows you to avoid taxes on contributions, but in return distributions get taxed. If you have receive a pension from an employer (aside from the military or disability), then that too will be taxed as it is viewed as income by the IRS. If you have investments made outside of an IRA or 401(k) Continue reading Don’t Let Taxes Surprise You in Retirement