Blog posts by Rodgers & Associates on tax policy, tax law, tax planning, the IRS, and related topics.
Here, we break down the IRS pro-rata rule—a calculation that helps distinguish pre-tax and after-tax funds.
Withdrawing money early from a retirement account is meant to be a last resort—and can come with consequences. Make sure you know these penalties and exemptions first.
Follow these strategies to design a distribution plan with tax efficiency in mind.
If you’re the beneficiary of retirement accounts or other inherited assets, it pays to learn about the IRD deduction.
Full of tricky timing concerns, the rules for IRA withdrawals are commonly misunderstood. Here, we explain five of them.
Protecting your portfolio from avoidable income tax is key to creating a sound income strategy for retirement.
Is that new pursuit a hobby or a business? Learn the difference and follow the corresponding tax rules to avoid penalties.
The rules surrounding Required Minimum Distributions are complicated and missing them can be costly. If you have made an error, follow these steps to amend it and seek a penalty waiver
Deciding when to begin Social Security benefits is complicated. Weighing these factors, and running careful tax projections, can help.
Learn how diversifying your taxability (not just investments) is key to creating a sound retirement plan.
Taxpayers reaching age 72 should be aware that a portion of the funds in their retirement accounts starts to become taxable each year—and pitfalls are common.
Keep in mind that claiming Social Security benefits before FRA results in a permanent reduction in the benefit amount, whether you are claiming spousal benefits or your own.
Estate tax is levied against someone’s estate upon death and is based on the size of the total estate. Inheritance tax is levied against the heirs of an estate.
It’s wise to use an adviser whose primary focus is on strategies that maximize the retirement experience.
The new rule for adults who inherit an IRA from their parents in 2020 and beyond is that they must liquidate that account within 10 years.
When Inheriting an IRA there are complex rules you will need to follow to avoid costly errors.
Until you reach age 59 ½, attempting to access tax-deferred retirement accounts could trigger taxes and penalties.
If money is taken from an IRA before age 59 1/2, a 10% excise tax penalty is applied to the amounts withdrawn—unless it meets one of the twelve exceptions.
The difference can be summed up in two words: intraday trading. Unlike mutual funds, ETFs can be bought and sold anytime throughout the day.
Affordability, access to healthcare, climate, and culture are just some of the important factors to consider before moving to another state.
Many are unknowingly saying, “No thank you”.
Many people believe all they need to do for retirement is defer as much money as they can. This is rarely the case.
Depending on your income and household size, you may qualify for federal tax credits, a combination of credits and subsidies, or Medicaid.
There is a way to get a partial deduction for money that will eventually go to your children. A charitable lead annuity trust gifts money to a charity first, and then passes assets to your beneficiaries.
Income earned by one spouse can be used to fund retirement accounts for both spouses.
Thinking of buying a vacation home? Here are some factors to consider before you make your decision.
Don’t overlook these benefits.
And what should you do if you have forgotten to file Form 8606?
Retirees who own their employer’s stock in their 401(k) plan have the potential for huge tax savings using an often-overlooked tax strategy known as net unrealized appreciation (NUA). How does…
An investment option you may not have considered.
Building a tax efficient New Three-Legged Stool successfully takes preparation.
59½? 70½ ? How does the IRS come up with these?
Gains from gold and gains from investments are taxed differently.
IRS tax code treats married people very differently than single people. When a spouse dies, the surviving spouse may often face a drop in income and a hike in income taxes at the same time.
Your after-tax savings also offers tax advantages and other important benefits you may not be thinking about.
You may need to make quarterly tax payments on your capital gains.
What can be worse than expecting to finally get a Social Security raise, only to find out that your net check actually went down due to your income two years ago?
The maturity of the annuity at age 85 may actually be a gift to annuity owners to further contemplate their exit strategy of this tax-deferred investment.
Learn whether you can use your IRA’s Required Minimum Distribution (RMD) to pay some or all of your quarterly tax estimates.
Learn about different types of annuities and understand how they can become a valuable component of your retirement plan.
Is funding an HSA right for you? Learn how you can use this account to pay for a number of medical expenses in retirement.
Understand your path for rolling after-tax money in employer-sponsored plans to a Roth IRA and the rules that need to be considered to complete this transaction properly.
It’s best to approach tax-loss harvesting cautiously and keep your broader financial plan in mind when making any tax planning decisions.
If you own large quantities of company stock held within a retirement plan, rolling it into a tax-deferred IRA may not be the best strategy. Learn when a Net Unrealized Appreciation (NUA) transaction is the right choice to maximize your tax efficiency.
If you’re investing in mutual funds at the end of the year, exercise extra care to avoid paying tax on gains that are earned internally by the fund.
Many people think it is a good idea to put their child’s name on the deed to their home, especially if one of the parents is deceased. Usually the motivation is…
Many clients have questions about when they need to withdraw money from their IRAs and what the rules are for Required Minimum Distributions (RMDs). Learn how to evaluate distribution options and avoid penalties that arise when RMDs are not met.
Why naming your Estate as your IRA Beneficiary may not be a good choice.
Since long-term capital gains are taxed at a lower rate than other types of income, selling these types of assets can be a tax-efficient strategy.
Our approach to retirement planning combines the seven-step process outlined by the Certified Financial Planner Board of Standards with our own unique focus on maximizing tax efficiency, managing risk, and minimizing expenses throughout retirement.
Our New Three-Legged Stool™ strategy and R/D Factor™ help us keep taxes lower for our clients in retirement
Look for opportunities created by lower markets, which include evaluating employer stock, performing Roth conversions, and investing before the market rebounds.
Learn how to make the final year before retirement worry-free by addressing key concerns, from budgeting to benefits.
In planning for retirement, how you save is just as important as how much you save. Learn how you can save tax-efficiently by diversifying your assets across accounts that are taxed differently.
The 10-year period before you retire can matter more to your retirement success than any other.
Since the majority of retirees take more than their RMD annually, new life expectancy tables should not have a significant impact.
Get familiar with the Alternative Minimum Tax and learn what triggers this part of the tax code.
It’s never too early to start planning for retirement. By setting a strategy— and sticking to it—you can help achieve your goal of financial independence sooner.
Learn how to weigh the benefits and drawbacks of taking a lump-sum cash payout from your pension plan.
Use these tips and strategies about spending, saving, and asset allocation to reach your retirement goals.
Are Qualified Charitable Distributions (QCD) Permitted from SEP IRA, SIMPLE IRA, 401(k) or 403(b) Accounts?
Qualified Charitable Distributions (QCDs) can be given from some accounts other than IRAs to eliminate tax on donations. Learn how to plan effectively to minimize future tax liability.
There are a few tax strategies for retirees that could increase your refund or at least help to trim the tax you owe.
Understand how the IRS differentiates between these investments when planning how to use the property personally.
Social Security gives workers the option to take benefits anytime between the ages of 62 and 70, and it offers some incentives to those who are willing to wait. Waiting eight…
Concierge medicine1 is a type of doctor/patient relationship in which patients pay an annual retainer fee to their doctor in exchange for more personal care. The doctor can then limit their…
Special purpose entities in PA allow individual donors to participate in tax credits previously only available to businesses.
Gifting through a Qualified Charitable Distribution can be one way to keep the tax benefits of a donation. Learn about the rules and benefits of QCDs.
Did you know retirement income is not taxed by all states? We’ll help you determine which state is best for retirement on this edition of Project Wealth.
Managing an investment portfolio efficiently requires knowledge of income taxes and your tax bracket specifically.
What happens when the paychecks stop, and retirement begins? It is one of the most pressing questions we hear from people approaching retirement.
Filing status is especially important because it determines, in part, the tax rate applied to taxable income, the amount of the standard deduction, and the types of deductions and credits available.
Complexity abounds with respect to a RSU or option decision.
Gifting to adult children can be a rewarding way to enrich their lives.
When investors take a step back and view the stock market over a long period of time, we observe that bear markets are a natural occurrence in the never-ending market cycle.
If you are an executive at a large company, you may receive stock in your company at some point as a form of compensation.
Saving more tax-free dollars for retirement got easier in 2019 after a six-year wait! The inflation-adjusted maximum annual contribution for a Roth IRA finally increased to $6,000.
RMD rules are similar for both types of accounts, but there are some differences.
HELOC stands for home equity line of credit. Like a mortgage, it’s a loan made against the equity in your home.
How to pay it forward in 5 easy steps
You probably just finished filing your tax return for 2018 and you’re thankful that it’s done for another year. The last thing you want to think about now is amending…
Many people mistakenly believe their expenses will be half as much as a widow(er) than as a couple. This is true of some expenses, like food and clothing. However, larger expenses related…
Your favorite non-profit is running a capital campaign. They approach you for support asking for an amount larger than you are willing to write a check for today. No problem. You can…
The primary goal of income tax planning is to pay the least amount of tax possible. Good tax planning should include avoiding paying tax on the same income twice. One…
House Republicans boasted their 2017 tax reform would simplify taxes to the point that taxpayers would be able to file a return on a postcard. The Tax Cuts and Jobs Act (TCJA)…
It’s a great place to retire, but can be an expensive place to have an estate.
Many taxpayers have filed their returns for 2017 and are grateful tax season is behind them. Tax planning for 2018 is probably one of the last things they want to…
Many companies are closing out their pension plans, giving workers the opportunity to roll them over to an IRA or another plan. This situation was created by the high cost…
The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the ability to use recharacterization to reverse the conversion of a Traditional IRA into a Roth IRA. The process of undoing a Roth…
Taxpayers in the highest tax bracket should take a long-term view of tax planning. This method can help lower long-term tax liabilities.
Roth IRAs are not subject to RMD rules.
The Tax Cuts and Jobs Act of 2017 (TCJA) was signed into law by President Trump on December 22, 2017. Many of the provisions in the bill went into effect…
Anyone who has an IRA and will be at least age 70½ in 2018 will need to carefully consider how he or she makes charitable gifts in 2018 and the…
Want to reduce your income taxes? Who doesn’t? We’ll help you plan your finances to minimize taxes on this edition of Project Wealth.
The Rodgers & Associates logo includes “The Retirement Specialists.” The home page of our website says we “specialize in financial planning for those who are retired or expect to retire within…
Budget cuts at the Internal Revenue Service (IRS) have turned out to be a “good news, bad news” situation. The good news is the number of individuals being audited has dropped. The…
Last fall The Washington Post reported that 71% of American’s aren’t saving enough for retirement. The article was based on a national survey commissioned by Experian in collaboration with Get Rich…
I’ve written so much about making Roth conversions the past couple of years that people have begun to ask me if there is ever a reason not to convert. The answer…
Why is Pennsylvania considered a good state for retirees? The answer on this edition of Project Wealth.
The New Three-Legged Stool A Tax-efficient Approach to Retirement Planning was published in June of 2009. People had been told for years that they would be in a lower tax bracket…
The rules for medical deductions are changing for seniors ages 65 and up.