All articles tagged with #tax planning
Originally Published 7 days ago — by Morningstar
The article provides a comprehensive month-by-month guide for financial tasks in 2026, including reviewing investments, adjusting contributions, organizing documents, estate planning, and year-end portfolio review, aimed at helping individuals optimize their financial health and plan for the future.
Originally Published 12 days ago — by Morningstar
For experienced investors, the New Year's resolutions focus on optimizing existing financial strategies by reviewing tax strategies, capturing charitable deductions, actively managing tax-loss harvesting, eliminating cash drag in tax-advantaged accounts, and adjusting insurance coverage to match current needs, all aimed at protecting and growing their wealth efficiently in 2026.
Originally Published 18 days ago — by CNBC
As the year-end approaches, investors can still implement certain tax strategies such as tax-loss or gain harvesting and Roth IRA conversions, but most actions must be completed by December 31 to impact 2025 taxes, with some exceptions like IRA contributions that can be made by the tax deadline in 2026.
Originally Published 2 months ago — by CNBC
Inherited IRA owners, especially non-spouses, should be aware of complex IRS rules like the 10-year rule and RMD requirements to avoid costly penalties and taxes. Proper planning involves understanding these rules, managing tax implications over the distribution period, and adjusting investments to match personal goals and risk tolerance to maximize the inheritance.
Originally Published 4 months ago — by CNBC
President Trump’s legislation increased the SALT deduction limit to $40,000 for 2025, allowing itemizers to maximize their tax benefits by prepaying property taxes and estimated state income taxes, especially for high earners, while being mindful of phaseouts and the 'SALT torpedo' effect for incomes between $500,000 and $600,000.
Originally Published 5 months ago — by Barron's
Retiring early can lead to higher healthcare premiums, especially as federal subsidies expire, with options like strategic tax and asset management, careful planning, and state-specific healthcare choices helping to mitigate costs. Financial advisors recommend planning ahead, managing income, and exploring healthcare options thoroughly to avoid costly coverage gaps before qualifying for Medicare at age 65.
Originally Published 5 months ago — by CNBC
The article discusses how Trump's new legislation caps the SALT deduction at $40,000, but introduces a 'SALT torpedo' that could result in a 45.5% tax rate for high earners with modified adjusted gross income between $500,000 and $600,000. It offers strategies such as managing income, using ETFs, adjusting retirement contributions, and avoiding large gains to mitigate this impact.
Originally Published 1 year ago — by Forbes
The article discusses reasons to reconsider converting a traditional IRA to a Roth IRA, especially in light of potential extensions to the Trump-era tax cuts. It outlines 11 scenarios where a Roth conversion might not be beneficial, such as using IRA funds to pay taxes, having low-income beneficiaries, or planning charitable donations. The piece emphasizes the importance of evaluating personal financial situations and tax implications before proceeding with a conversion.
Originally Published 1 year ago — by CNBC
Despite the reduced likelihood of tax hikes under President-elect Donald Trump, demand for Roth IRA conversions is expected to rise as investors focus on long-term tax planning. Roth conversions, which involve shifting pretax IRA funds to a Roth IRA for tax-free growth, are increasingly popular, especially with the potential expiration of Trump's 2017 tax cuts in 2025. Financial advisors recommend considering Roth conversions in lower-income years to minimize taxes, but emphasize the importance of individual financial situations and comprehensive tax projections.
Originally Published 1 year ago — by CNBC
President Joe Biden and Vice President Kamala Harris released their 2023 tax returns, showing lessons for average Americans, including the impact of interest income, self-employment tax planning, and the importance of working with a tax professional for those with complex financial situations. The Bidens and the Harrises both earned most of their income from salaries, with interest income causing small estimated tax penalties. The Bidens reduced self-employment taxes through their S corporations, while taxpayers with self-employment income should consider the impact on future Social Security benefits. Working with a tax professional is recommended for higher earners with complex financial situations.
Originally Published 2 years ago — by Forbes
As the end of the tax year approaches, there are still strategies you can employ to reduce your 2023 tax bill. One option is to fund your retirement accounts, such as a 401(k) or IRA, to defer taxable income and grow your nest egg. Additionally, making charitable contributions can lower your taxable income while allowing you to support causes you care about. Another tactic is to harvest losses by selling losing stocks to offset gains. Going green can also provide tax benefits, such as clean vehicle tax credits for purchasing electric vehicles or fuel cell vehicles, and energy-efficient home improvement credits. Lastly, consider borrowing from family members to reduce interest rates and preserve tax breaks.
Originally Published 2 years ago — by CNBC
With just a month left in the year, experts suggest several tax strategies to reduce your tax bill or boost your refund. These include maximizing pretax 401(k) contributions, "bunching" donations to exceed the standard deduction, making the most of your tax bracket by considering income projections, and weighing strategies that can be implemented in the new year. Additionally, making pretax IRA contributions and contributing to a health savings account can offer further tax benefits.
Originally Published 2 years ago — by Forbes
With tax rates expected to rise, it may be a good time to consider converting your traditional IRA to a Roth IRA. Converting to a Roth IRA involves prepaying income tax on a portion of your retirement account, which can provide future tax immunity. Factors to consider include your current and future tax brackets, the potential impact of required minimum distributions, the expiration of Trump-era tax cuts in 2026, and the possibility of future tax increases. Various strategies, such as bracket filling and timing conversions, can be employed to optimize the benefits of a Roth conversion. Consulting with an accountant or financial advisor is recommended to determine the best approach based on individual circumstances.
Originally Published 2 years ago — by CNBC
Retirees can reduce their 2023 taxes while donating to charity through a strategy called qualified charitable distributions (QCDs). This allows individuals aged 70½ or older to transfer money from their individual retirement account (IRA) directly to a nonprofit organization, up to $100,000, without it being counted as taxable income. QCDs provide a tax break by not counting the withdrawal towards adjusted gross income, which can help retirees claim a tax break for charitable gifts even when taking the standard deduction. QCDs can also cover required minimum distributions and help prevent other tax issues such as higher tax brackets, increased Medicare premiums, or higher taxes on Social Security benefits. However, QCDs can be more cumbersome for tax reporting and administration, requiring careful record-keeping and planning in advance.
Originally Published 2 years ago — by CNBC
As Americans compare health plans on the Affordable Care Act insurance marketplaces, financial experts are warning about the potential impact of a "phantom tax" for marketplace enrollees. It can be challenging to accurately gauge eligibility for subsidies, and certain financial strategies like Roth IRA conversions or selling assets can unexpectedly affect eligibility and result in higher tax bills. Accurate income forecasting is crucial when applying for ACA subsidies, as underestimating income can lead to repayment obligations. It is advised to run projections and reconsider popular tax moves before enrolling in subsidies.