New RMD Tables For 2022 Are Out. Get Them While They’re Hot?

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There may be some good RMD changes coming along in 2022 that most likely include lower taxes and the opportunity to keep more of your money for retirement. Continue reading New RMD Tables For 2022 Are Out. Get Them While They’re Hot?

Take Advantage of That Delayed IRA Contribution Deadline

Have you made an IRA contribution for 2019 yet? Are you worried that you might not get the chance to? Well, there is good news. While you probably heard that the IRS extended the deadline for filing taxes to July 31, you probably did not know that the deadline for making a prior year contribution was pushed back to July 15. That’s three extra months! That might not seem like a big deal, but it could be for many Americans who didn’t get to make a contribution for 2019. If you didn’t get to make a contribution–and of course have Continue reading Take Advantage of That Delayed IRA Contribution Deadline

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?

Tax Planning for Retirement

Don’t let taxes do a number on your nest egg. The years leading up to retirement are a great time to look at your tax projections and determine strategies to keep your tax hit minimized. They can also help you to determine how you will spend your money in retirement and where you will take money out of and when. For example, if you have multiple Roth IRAs, you may decide to tap one before the other. Or maybe you have assets that you plan to sell off to help fund your retirement, so you can use a tax projection Continue reading Tax Planning for Retirement

Are You an Active Participant in Your Employer’s Retirement Plan?

If you aren’t participating in your company’s retirement plan (i.e. a 401(k)), then you are really missing out. Not only is it a great way to save for retirement, there may be numerous perks and benefits that you may be giving up. For one, if your company offers contributing matching, you could be leaving extra money on the table. Even if the match is only a small amount–such as 3%–that’s still better than nothing and can go a long way over a long period. Being an active participant in an employer retirement plan can also potentially allow you to deduct Continue reading Are You an Active Participant in Your Employer’s Retirement Plan?

Miss an RMD? Don’t Panic, But Don’t Brush It Off, Either.

It can be easy to forget about required minimum distributions (RMDs), especially as you move into retirement or if you inherit an IRA. Now, forgetting to take an RMD isn’t the absolute end of the world, but it should not be taken lightly. The penalty to missing an RMD is half the amount that was to be distributed, which is quite harsh and can be a substantial amount of money depending on the size of your retirement savings. So, what should you do if you forgot to take an RMD or you learned that you needed to take one from Continue reading Miss an RMD? Don’t Panic, But Don’t Brush It Off, Either.

The Cautions of Backdoor Roth IRA Conversions

A backdoor Roth IRA conversion can be tempting if you are considering retiring early and are currently over the income limits for a Roth IRA contribution. In case you are unfamiliar, a backdoor Roth IRA conversion is where you contribute money to a traditional IRA and then convert that money into a Roth IRA. This is a useful transaction for those who earn too much income to contribute to a Roth IRA as Traditional IRAs have no income limits. It’s also a perfectly legal transaction. However, when doing a backdoor conversion, keep in mind that the taxman will get his Continue reading The Cautions of Backdoor Roth IRA Conversions

You Don’t Need Income to Make an IRA Contribution

Contrary to what you may think, you don’t need to earn income to be able to make contributions to an IRA. You’re probably familiar with spousal contributions, but did you know that you can make contributions from when you exercise non-qualified stock options? The taxable portion is considered taxable income for IRA purposes. If you receive alimony, that too is taxable as ordinary income and is eligible for IRA contribution. Some scholarships and fellowships may be considered taxable income, depending on reported on the W-2 form. This last one can be valuable to young savers, such as your children or Continue reading You Don’t Need Income to Make an IRA Contribution

Do You Know the Different Types of Income?

Not all income is treated the same by the IRS. There are actually multiple types of income that you could generate and which are taxed differently from one another. For example, the income your generate from working is looked upon differently by the IRS than income generated from the sale of stock. Thus, it’s important that you understand the different types of income and how they are taxed. I’m not going to get into a detained examination in the blog post, but I will describe them in a nutshell. The first type of income is ordinary income, which includes things Continue reading Do You Know the Different Types of Income?

Don’t Miss Out on a 2018 IRA Contribution

You may not realize it, but you still have time to make a contribution to your IRA and still have it count for 2018. Whether it’s a traditional IRA or a Roth IRA, you have until tax day to make a contribution for the previous year. Thus, you can make a contribution anytime before April 15, 2019, and have it count as though it was made in 2018. Many people don’t realize that such an opportunity exists. However, keep in mind that the April 15 deadline is a hard deadline, which means there is no ability to extend it, unlike Continue reading Don’t Miss Out on a 2018 IRA Contribution