roth ira

The new Tax Law for 2018 and later provides a $12,000 Standard Deduction (instead of itemized deductions) for single taxpayers. If your child earns wages of $12,000 or less in 2018, the child files a tax return, but pays no tax.

It is good Congress has linked many retirement plans with inflation. Here are some of the main 2018 dollar limits. 401(K) maximum contribution increases in 2018 to $18,500. That is $500 more than it was for 2017. And if you were born before 1969 (will be age 50 by 12-31-18) the “Catch-up” contribution is an additional $6,000.

You can convert your regular IRA to a ROTH IRA. The value converted is taxable income. If the value goes down after conversion, you can change your mind and cancel the conversion if you do it by Oct. 15th of the year following the conversion.

Saving for your retirement and possible bequest to family and friends is good to do! Many folks have an Individual Retirement Account (IRA) that is a major part of their retirement savings.

When the owner of a ROTH IRA dies and the beneficiary is not the surviving spouse, special rules on required minimum distributions apply. The Non Spouse Beneficiary (ie child, etc) is to receive distributions from the ROTH IRA:

There are many ways to invest in gold. Some have some surprising tax rules. As with all investment decisions, you would not want to put all your money in gold or any one stock.

Diversification is best. If you choose to invest in gold (directly or indirectly), maybe you should limit the amount to about 5 percent of your total investments.

The Gift Tax rules are interesting and offer many possibilities for planning that will improve the quality of life for your family and friends.
Basically you can give total cash gifts (checks) of $14,000 each year, to each person. If you have three grandchildren, you can give each of them $14,000 total gifts in 2016 and there is no gift tax to pay and form 709, U.S. Gift Tax Return is not required to be filed. That is known as the “Annual Exclusion” gift allowance.

Suppose you have a Traditional IRA but want to convert part of it to a ROTH IRA. You could do that to benefit your designated beneficiaries. After your death, if they inherit a ROTH IRA, they can receive withdrawals that are tax free.

The last legislative session provided for changes in the Nevada trust laws and the governor signed the bill June 10. The main goal was to change the basic estate planning trust so the ultimate beneficiaries pay less income tax.

A trust is decanted when the trustee distributes assets from the first or original trust to a new, different trust, with different terms. You can decant wine by pouring the wine from the old, original bottle to a new bottle, leaving behind any sediment in the old bottle.

Doing gifts to a grandchild can be a good idea, if you have intent to help the grandchild and the "extra" money to do so.

The "Annual Exclusion" (amount that is not a taxable gift) is $14,000 for each person you give to for years 2015 and 2016. Also, payments directly to the educational institution, medical provider or medical insurance company for that grandchild also are Annual Exclusion gifts in addition to the $14,000 check. It is also OK to give a lesser amount.

Most IRA owners know they are to begin taking annual Required Minimum Distributions either in the year they are age 70.5 or by April 1 of the following year.

Many grandparents are interested in helping pay for part of the grandkid’s college costs. Direct gifts and direct payment of tuition to the college are common ways to help. Section 529 plans are also popular.

Neither of those actions give the grandparents an income tax deduction and are not taxable income to the grandkid. However, either option can affect your grandkid’s eligibility for financial aid. One option to consider is to hold off doing any action until the child has filed the last financial aid form.

A client recently said, “I want to convert my regular IRA to a ROTH IRA so when my kids inherit, they don’t have to pay income tax on the distributions. I realize I will be taxed on the value that is converted. I prefer to pay that income tax so my kids will not have to pay…”

One of the best investments is the money you save in a retirement account. Whether it is the salary deferral savings at work or the IRA contribution or some other retirement account contribution does not matter. Whatever you save will be a benefit to you or your heirs in the future.

President Obama announced a new kind of retirement plan called “MyRA.” It won’t do very much to reduce your income taxes because the contributions to this new retirement savings plan are not deductible on your tax return. It is your account and you keep it if you change jobs.

The accounts for this plan will be funded or paid with what wages are left after payroll deductions. It is paid from what you have left after taxes.

Many individuals think the time to plan for 2013 year is past, and most of them are correct. The door to almost all tax saving moves or actions for 2013 closed on Dec. 31, 2013. However, there are some exceptions regarding IRA contributions and some retirement plan contributions.

Contributions to traditional (regular) IRAs for the tax year of 2013, can be made as late as April 15, 2014 and still be a 2013 deduction if certain rules are met.

These days it’s common to find women who balance family life with active careers. That’s why it’s important for working women to take an active role in planning for retirement.
Females retiring at age 65 can expect to live another 19 years (three years longer than males retiring at the same age), but only 45 percent of women participate in a retirement plan. Those statistics may make women feel insecure about their future, but with proper planning, women can feel more confident about their retirement years.

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Ben Franklin once said, “In this world, nothing is certain but death and taxes.” That might be true, but Ben wasn’t able to open an IRA back then. If he had this option, he might have felt a little more lighthearted about paying the tax man.
Individual Retirement Accounts (IRAs) are great for people looking to save money on their tax bill and boost their retirement savings at the same time. In this volatile economy, saving money is more important than ever. Plus, when the stock market is down, it could be a good time to invest.

Well Howdy folks! I sincerely hope you all had a GREAT Thanksgiving! We do have so much to be thankful for.

One of the things I am thankful for is that we have finished updating all our office computers operating system to a newer version of “doors” (not the real name to protect the innocent). I haven’t noticed any improvement in productivity yet though. (I thought new computer stuff always meant new tools that make us more productive.

Howdy folks! As a brief introduction, I am a second generation CPA, bo