Seems like a no-brainer – why would anyone want to “invent” income? That just means you’ll have to pay tax, right? Not always, especially if the income is for a minor and is only a relatively small amount – say, enough to qualify for the maximum Roth IRA contribution, for example. This is a follow-up [...]
Posts under ‘IRA’
Roth IRA Conversion Tax Payment Wrinkle
Some very clever folks have looked at the 2010 Roth IRA conversion facts, including the ability to spread the tax over tax years 2011 and 2012, and have discovered a unique situation… What would happen if I did the Roth conversion in 2010, elected to be taxed half in 2011 and half in 2012, but [...]
Pension Payout: Annuitize or Rollover (Cash)?
If you happen to be in one of those jobs (there can only be a handful left at this point, right?) that has a traditional pension plan, you may be faced with an important decision. When you’re ready to retire (did I just hear angels singing?) – you have to decide if you’ll take annuitized [...]
IRAs and Blended Families
In today’s society, the historically “traditional” family is becoming less and less commonplace – apparently as many as 50% of all children under age 13 are currently living with one biological parent and that parent’s current partner who is not a biological parent of the child. Often as well, there is a significant age differential [...]
How the New 3.8% Surtax May Affect Your Roth IRA Conversion Strategy
One of the provisions of the Healthcare bill that was signed into law in March, 2010 is a brand spanking new tax – a surtax on investment income over certain amounts. This surtax will come into play beginning in 2013. The amounts are, admittedly, rather high, but nonetheless will impact a lot of folks. What [...]
Charitable Contributions From Your IRA – 2010 and Beyond
We discussed the IRA Charitable Contribution option some time ago in the post “Last Chance for Charitable Contributions from Your IRA”, and it’s possible from that article that you got the impression that you are no longer able to make charitable contributions with money from your IRA. Nothing could be further from the truth! You [...]
Withholding and Social Security Benefits
Many folks find, upon filing their income tax return, that a portion (often a significant portion¹, up to 85%) of their Social Security benefits are taxable. Upon discovering this, it’s also often a surprise that, since the benefit is taxable, there hasn’t been enough tax withheld throughout the year – which not only requires you [...]
Problems With Naming a Minor Your IRA Beneficiary
We’ve discussed the fantastic benefits that can be realized over time by naming a very young person as the beneficiary of your IRA (see “How To Turn $5,000 A Year Into a $33 Million Legacy” for details). This makes for a very elegant, clean tax-planning exercise; but in reality, a minor cannot legally hold assets [...]
Naming Your Estate the Beneficiary of Your IRA
As we have discussed in other articles on this site, most specifically in the article “Choosing a Beneficiary for Your IRA”, one of your options to name as your beneficiary is your estate. Actually, if you neglect to name a beneficiary at all for your IRA altogether, your estate is the default beneficiary. So, if [...]
Mistakes With NUA
In another article on this site we discussed the concept of Net Unrealized Appreciation, or NUA for short. It’s a complicated affair, fraught with potential mistakes – several of the most important ones are listed below. Mistakes With NUA Moving too quickly – if you roll over your funds from the Qualified Retirement Plan (QRP) [...]
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