Roth Solo 401(k) Makes More Sense Than Ever
Lower tax rates under the new income tax law, combined with the likelihood of higher tax rates in the future, support a Roth solo 401(k) contribution strategy.
Category Archives: Income Tax Planning
The Interest Deduction is Dying a Slow Death
The Tax Cuts and Jobs Act of 2017 contains numerous changes that affect income tax planning and preparation for 2018 through 2025 after which most of the provisions expire. Two of the more significant changes are a reduction in the amount of principal on which residential mortgage interest can be deducted and the elimination of…
5 Self-Employed Income Tax Deductions You Don’t Want to Miss
There are five deductions available to self-employed individuals, including a brand new one in 2018, that can result in substantial income tax savings.
Leverage Your Assets for Retirement
When you buy a house, typical financing is a mortgage equal to 80% of the purchase price. This enables you to purchase a much more expensive home than you would otherwise be able to do without the mortgage. The goal is to increase your equity in the property over time through a combination of paying down the mortgage and appreciation.
How to Avoid Tax and Receive Tax-Favored Lifetime Income on the Sale of a Rental Property
Anyone who wants to avoid tax and receive tax-favored lifetime income on the sale of an unencumbered rental property is a potential candidate for a charitable remainder trust, or CRT.
New Tax Law – The Mostly Good, the Bad, and the Ugly
The Tax Cuts and Jobs Act, while controversial, especially in high state income tax states, will result in tax savings for most people.
Are Nondeductible IRA Contributions Worth It?
Given the relatively small limit of nondeductible IRA contributions and complexity of calculating allowable contributions, tracking basis, and calculating the taxable portion of IRA distributions, are they worth the effort?
RMDs: Recapture My Deductions – A Questionable Strategy
Making deductible retirement plan contributions and “recapture my deductions” beginning when you turn 70-1/2 may not be the best strategy for optimizing after-tax retirement plan distributions.
AMT Exposure Minimized Under New Tax Law
The alternative minimum tax, or AMT, dreaded by many taxpayers for years, has been given a long-overdue facelift by the Tax Cuts and Jobs Act, with an associated reduction in affected individuals from 5 million to 200,000.
Tax Reform: Now You See It, Now You Don’t
The new Tax Cuts and Jobs Act contains several provisions that partially, or completely, negate what appear at first blush to be potential tax savings.
Charitable Giving Cut for Middle-Income Taxpayers in Tax Cuts and Jobs Act
If the Tax Cuts and Jobs Act as currently proposed is enacted, middle-income taxpayers who make charitable contributions based solely on tax savings may be less inclined to do so if the amount of their standard deduction is greater than their allowable itemized deductions.
The Perfect Storm for a Tax Credit Longevity Annuity Plan
A Tax Credit Longevity Annuity Plan, or TCLAP, would create tax-favored private pension plans while also providing for long-term care benefits.
Avoid Income Tax on Stock Sales with Donor Advised Funds
Now that the 2016 income tax filing season is behind us, we can focus on 2017 tax planning. Although the stock market is down about 3% from record highs, there are a lot of investors with significant unrealized capital gains in nonretirement investment accounts. The dilemma for these individuals is how to sell their appreciated…
Strategic Roth IRA Conversions Still Make Sense
As my clients and those of you who have read my MarketWatch RetireMentors articles and Retirement Visions blog posts know, I’m a huge fan of Roth IRA conversions. One caveat: they must be timely. There are two types of timely Roth IRA conversions: Strategic Market-sensitive Strategic Roth IRA Conversion The goal of a strategic Roth…
It’s Time for IRA – 401(k) Contribution Parity
Elimination of income testing for traditional and Roth IRAs and creation of a universal 401(k)/IRA contribution limit is needed to enable all individuals who aren’t participants in 401(k) plans to (a) contribute to an IRA of their choice and (b) accumulate a nest egg in a retirement plan comparable to what’s possible with a 401(k).
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