Review Category : Tax Management

The Three Most Important Letters In Retirement R M D

What is a required minimum distribution? (*) You’ll sometimes hear that you have important financial decisions to make when you turn the age of 70 ½.  The IRS has never seen a nickel of tax revenue on account you may have started in your early 20’s, so now they are wanting to get their due.  An RMD or required minimum distribution is the amount that the tax laws require you to take out of certain types of retirement accounts once you reach the age of 70 ½. If you have a traditional IRA, a 401(k) account, 403(b), or other types of retirement plans, then you’ll generally have to start taking RMDs once the provisions of the law kick in. The rules apply to certain inherited retirement accounts as well, so be very careful when you inherit an IRA. Required minimum distributions must be made in cash, and you’re generally required to complete the withdrawal by the end of the calendar ...

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Four Bizarre Tax Deductions You May Have Never Seen Before

It’s no secret that people come into the office all the time asking the question, “Can I Take This As A Tax Deduction?”  It’s important to get a high-quality CPA on your side as they will be the person who can give you the ultimate yay or nay, but in order to even suggest a tax idea, you have to understand the nature of being creative.  In 2018, many small tax deductions vaporized, but for those that own side hustles or small businesses, there are still opportunities to potentially use bizarre type tax deductions. 1.            Can you deduct plastic surgery? – This year, one important tax deduction is completely gone. It is form 2016, which is for unreimbursed employee expenses normally reported in the itemized deductions Schedule A of your tax return.  That means all of the salespeople and executives who took deductions for mileage, meals, and entertainment not allowed by their employer are now officially out of luck.  However, ...

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Five Most Common Tax Questions People Are Asking This Year

It’s that time of year.  Unless you needed your refund quickly and your documents were in complete order, you are now beginning to organize your stack of documents to get your taxes filed for 2018.  With all of the news about people getting smaller refunds, lots of taxpayers are worried about actually having to stroke a check when they complete their taxes.  The new Trump tax plan that took effect last year had many changes that people were unaware of or didn’t pay attention to during the course of 2018.  This has triggered a handful of questions which I will answer here in the Your Smart Money Moves column. Why are refunds smaller this year? – This is actually a pretty easy one to answer.  When the new tax laws took effect in 2018, most people quickly realized they had received a bump in their paycheck.  However, what most people didn’t do was make a new calculation on the new ...

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What To Do When You Inherit An IRA

The other evening as I was checking client e-mails, a client sent me a short note inquiring about something her sister did with an inherited IRA and quickly after hearing the story I knew it was even too late to give advice.  The sister had told the IRA custodian to make a check out to her Father’s estate and this would cause tax consequences that are irreversible. Inherited IRA’s can be just like a dozen eggs…once you crack the shell it is impossible to put it back together.   When a loved one passes away, there is a wide array of emotions, and this could affect how you make short term financial decisions.  Especially when you don’t know all of rules or have various siblings chirping in your ear.  It is one of the most important times to seek out financial help from a professional. The overall rules for inherited IRAs are extremely complicated.  It really depends if you inherit the ...

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