- What Tax Rules Apply to an IRA Rollover?
Rolling over a 401(k) or other workplace retirement plan into an Individual Retirement Account (IRA) is very common when people change jobs or retire. Among other potential benefits, a rollover lets savers combine multiple accounts to keep better track of everything. But if the rollover isn’t done right, you could end up facing a big… read more…
- How the 10-Year RMD Rules Work for Inherited IRAs
Inheriting an IRA as a beneficiary can increase your financial security. But since inherited IRAs typically must be distributed within 10 years, the account can generate more taxable income than many beneficiaries expect. However, exceptions to this timeline are available. Here’s how distributions work and how to prepare yourself for anticipated taxes. A financial advisor… read more…
- Can Capital Losses Offset Ordinary Income?
Long-term capital losses can be used to offset ordinary income, but only up to a set amount. After they are applied against any capital gains, up to $3,000 of remaining losses each year may be deducted from ordinary income, or $1,500 for those married filing separately. Any unused losses carry forward to future years with… read more…
- Strategies for Protecting Income From Taxes
While you can’t avoid taxes, the IRS allows you to lower your tax burden by combining tax deductions and credits. Here are nine common tax-saving strategies to protect your wealth. A financial advisor can help optimize your investment portfolio to lower your taxes. Aim For Long-Term Capital Gains Long-term capital gains are profits from the… read more…
- Can You Have Two Primary Residences If Married Filing Jointly?
Getting married and having multiple homes are blessings to enjoy – unfortunately, a tax exemption for two primary residences isn’t among the benefits of such a situation. While it would be wonderful if two people filing taxes meant twice the benefits and exemptions, U.S. tax laws require married couples filing jointly to claim just one… read more…
- I Want to Give My Daughter and Her Husband $50,000 For a Down Payment. Do I Have to Worry About the Gift Tax?
Imagine you have $50,000 to give to your daughter and her husband for a down payment on their new home. The question is, will you owe gift taxes because of your generous gesture? Despite popular framing, the federal gift and estate taxes only apply to very wealthy households. Unless you have approximately $13 million to… read more…
- How to Reduce Your Tax Liability on a Roth IRA Conversion
Converting your current retirement accounts to a Roth IRA is typically a very tax-efficient strategy. It can help lower your lifetime taxes significantly. However, it does come with a large up-front bill. While there’s no way to avoid conversion taxes completely, you can restructure them to make this much more manageable. By staggering out your… read more…
- End-of-Year Tips: 2026 Tax Rule Changes
As the year winds down, it’s important to set aside time to ensure your 2025 taxes don’t result in unwelcome surprises in 2026. Effective year-end tax planning generally falls into two categories: proactive strategies that may help reduce your tax burden, and required tasks that can lead to penalties if neglected. Reviewing both can help… read more…
- How a Roth IRA Is Taxed
A Roth IRA is funded with after-tax dollars, which means contributions aren’t deductible when they’re made. The benefit comes later: qualified withdrawals in retirement, including both contributions and investment growth, are generally free from income tax. This setup allows the account to grow without ongoing tax liability, provided that age and holding period rules are… read more…
- How to Hire Your Child as an Employee and Save on Taxes
Hiring your child as an employee can be a strategic move that benefits both your family and your business. Not only does it provide your child with valuable work experience, but it can also offer significant tax advantages. By employing your child, you may be able to reduce your taxable income, as wages paid to… read more…
- I’m Not Sure How Giving to Charity Can Reduce My Taxes. Is It Really Worth It?
Donating money to charities you care about feels good. It can also lower your tax bill by reducing your taxable income in an amount equal to the amount you give. A number of rules and restrictions govern how much you can give and how you can do it, though. Understanding how this works so you… read more…
- I’m Selling My Home and Netting $750k to Downsize for Retirement. Do I Have to Pay Capital Gains Taxes?
Suppose you sell your primary home and make a $750,000 profit. Will you owe capital gains tax on that profit? The short answer is yes. Depending on a handful of factors, you may owe tens of thousands of dollars to over a hundred thousand dollars. Your exact tax liability could vary drastically, so knowing what… read more…
- How Foreign Real Estate Property Is Taxed in the U.S.
One of the most common mistakes made by Americans overseas is the belief that they don’t have to pay taxes. Selling real estate abroad can create tax obligations in the United States. U.S. citizens and residents are required to report worldwide income, which includes profits from foreign property sales. Depending on the situation, capital gains… read more…
- How Creating an S Corporation Can Reduce Your Self-Employment Taxes
Creating an S Corporation can potentially reduce self-employment taxes by allowing business owners to split their income into salary and distributions. While salary is subject to employment taxes, distributions (such as payments that are made to shareholders from a portion of company profits) can potentially be exempt from those taxes. Here’s what you need to… read more…
- Common Tax Breaks for Retirees
Imagine evenings spent on a sandy beach, weekends filled with family gatherings and afternoons engaged in hobbies. This could be your retirement life. However, if you’re not properly prepared for taxes, they may end up taking more than you planned for your fixed income. Luckily, the federal tax code comes to your aid with an… read more…
- Do You Have to Pay Taxes on Grant Money?
Receiving grant money can be an exciting opportunity, whether it’s to fund your education, support a research project, or help launch a new business. However, many recipients find themselves wondering about the financial implications—specifically, do you have to pay taxes on grant money? The answer isn’t always straightforward, as tax obligations can vary depending on… read more…
- How Can Estimated Taxes Be Paid?
If you earn income that isn’t subject to regular paycheck withholding, estimated taxes can quickly become a source of stress and confusion. Missing a payment or choosing the wrong method can lead to penalties, interest and an unpleasant surprise at tax time. Understanding how estimated taxes can be paid (and which options make the most… read more…
- How to Avoid the Social Security Tax Torpedo
While retirees may be chagrined to discover that taxes don’t end when they leave the workforce, an unseen threat looms behind the U.S. tax code. The Social Security tax torpedo is as destructive as it sounds, blowing up the budgets of unsuspecting retired folks eagerly awaiting their first Social Security check. However, having a clear… read more…
- How a Solo 401(k) Is Taxed and What Is Deductible?
Investing in a solo 401(k) is a common retirement savings plan for self-employed individuals or small business owners. Let’s break down how it works, gets taxed and what potential deductions you can take. As with all retirement plans, how much you can save will depend on your specific circumstances. Therefore, getting personalized advice from a… read more…
- How Roth IRA Contributions Are Taxed
Roth IRAs offer a tax-advantaged way to save for retirement, and they’re a popular choice among investors. However, understanding how Roth IRA contributions are taxed is crucial for making informed financial decisions. Let’s break down the marginal tax rate, compare Roth IRAs to traditional IRAs, delve into the taxation of Roth IRA contributions and examine… read more…
- Do I Need to Worry About the Gift Tax If I Pay $30,000 Toward My Child’s Wedding?
Imagine your child is getting married and you want to help pay for their wedding. You’ve been saving for years and now have $30,000 set aside for their big day, which you plan to hand over in the form of a check. However, before you pass along that much cash, it’s important to understand the… read more…
- What Are the Income Limits for the Premium Tax Credit?
Managing your financial health promptly can seem challenging without the right guidance. The premium tax credit is a refundable tax credit in the United States that’s designed to help eligible individuals and families with low or moderate income afford marketplace health insurance. Its primary purpose is to offset the cost of health insurance premiums for… read more…
- What Is Unearned Income and How Does It Work?
Unearned income, also known as passive income, is derived from sources other than employment or business operations and can act as a financial safety net during times of job loss or financial crisis. It can also be a significant source of income during retirement. Unearned income is sometimes taxed differently than earned income. You might… read more…
- Can My Capital Gains Push Me Into a Higher Tax Bracket?
It’s nice to see the total value of your investments growing over time, but are you aware that significant growth can put you in a higher tax bracket? This is one way that many people end up owing a lot more tax than they anticipate. Long-term capital gains can’t push you into a higher tax… read more…
- Stock Market Losses: This Tax Break Could Save You Money Throughout Your Lifetime
Losing money in the stock market stings, but capital losses don’t have to be all bad news for your finances. A tax rule known as the capital loss carryover offers a major long-term tax break investors can use strategically to reduce what they owe the IRS for years, or even decades, into the future. The… read more…