If you change jobs this year, don’t forget about your 401(k) in your old employer’s retirement plan. You may be tempted to cash out the balance in the account, but remember that distributions from such accounts are generally taxable. Instead, ask your plan administrator to make a direct rollover to your IRA or another qualified plan. If you’re under age...
Persuading your working children to make retirement contributions may not be easy, but investments in Roth IRAs may be the wisest possible use of their earnings. The nature of Roth IRAs, coupled with the effects of long-term compounding, can create exceptional returns on such early investments. Although contributions to Roth IRAs are not deductible, earnings within the accounts (such as...
Estate planning is not just a task for the wealthy. Even though federal tax implications kick in only if your estate exceeds $5,430,000, there are other issues that make estate planning important for most individuals. Start your estate planning by meeting with an attorney and your accountant. They can instruct you in the essentials of estate tax law and the...
Tags: Estate Planning
Category: Taxes
The advantage of filing a joint tax return is well known – you generally save money compared to filing separately. However, there is at least one potential disadvantage. Both spouses are jointly and severally liable for the entire income tax bill, including interest and penalties, even if one earned most or all the income. This issue most commonly arises when...
Tags: joint tax returns
Category: Taxes
With summer vacations and warm weather just around the corner, tax planning may not be a priority on your agenda. The problem is that if you wait until December, you cut the time for planning strategies to take effect. But if you take the time to plan now, you still have eight months for your actions to make a difference...
Tags: midyear tax planning
Category: Taxes