Death of the Stretch

Posted by on Mar 12, 2020

Death of the Stretch New changes to the law have come, some are good and some are not good from a tax perspective. Today’s post discusses how the new changes affect various aspects of retirement and estate planning. Background of Legislation Congress passed the SECURE Act at the end of 2019. This Act is designed for Setting Every Community Up for Retirement Enhancement. The new law is getting mixed reviews, however. It does enhance the 401(K) plans. Small business employers are incentivized to offer retirement plans in their company. Additional tax credits are available if an employer uses...

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Did Tax Reform Change Your Giving?

Posted by on Dec 19, 2019

Did Tax Reform Change Your Giving?   Tax Reform in 2017 raised the standard deduction to $12,000 and $24,000 for singles and married filing joint. This decreased the number of households itemizing by over 20 million or a 50% reduction. However, the charitable giving from individuals only decreased by 1.1% according to Giving USA 2019 Annual Report on Philanthropy for the year 2018. While tax deduction may be one benefit donors seek in giving, it isn’t the driving force behind most charitable giving. Studies have shown generosity strongly associated with a person’s sense of well-being. Being...

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Can Capital Gains Push You into a Higher Tax Bracket?

Posted by on Nov 19, 2019

Can Capital Gains Push You into a Higher Tax Bracket?   Making Money on your money sounds great until you have to pay taxes. The federal capital gains tax rate is 0%, 15% and 20%. This is lower than the tax rate on ordinary income. To determine your capital gains tax rate, you begin with your ordinary income. Then add your capital gains to it. Where does this total fall in the range for capital gains tax bracket? (See Table below) IRS Tax Rate: Single Taxpayers Married Filing Jointly Heads of Household 0% $0 – $39,375 $0 – $78,750 $0 – $52,570 15% $39,376 – $434,550...

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Slow Down a Hacker: Use Two-factor Authentication Guide

Posted by on Oct 9, 2019

Slow Down a Hacker:   Use Two-factor Authentication Guide   Two-factor authentication (sometimes called two-step verification) is an extra security measure you can place on certain of your accounts. When enabling this feature, you will have to enter a short-lived one-time code (sent to your phone or device) after submitting your username and password. This process adds an extra layer of security to your account—even if a hacker knows your username and password, they cannot log into your account without the one-time code that is sent to your phone. You need two-factor authentication enabled...

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Medicare and HSAs Don’t Mix

Posted by on Oct 1, 2019

Medicare and HSAs Don’t Mix   Health Savings Accounts (HSAs) are designed to have a triple tax benefit. Contributions are tax deductible. Assets in an HSA may grow tax free. Distributions for medical expenses are tax free.   However, once you enroll in Medicare your eligibility to contribute to an HSA is cancelled. If you made HSA contributions while covered by Medicare, you face tax fines and penalties. What if you are covered by your employer? Reaching age 65 doesn’t require you to enroll in Medicare. If you employer has credible insurance coverage, you may decline Medicare and continue...

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Can you benefit from a Health Savings Account?

Posted by on Sep 24, 2019

Can you benefit from a Health Savings Account? Health Savings Accounts (HSA) are designed for a triple tax benefit.         1. Contributions are tax deductible         2. Accounts can grow tax free. (You can accumulate dollars in this account.)         3. Disbursements for qualified medical expenses are tax free. Health Savings Accounts are growing in popularity. The total number of HSAs grew to 25 million in 2018, up 13% from 2017 according to Devenir Research. Many financial advisors are using them as another savvy strategy for stashing money away for your retirement years. To qualify for...

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