News & Articles

How the Current Tax Law Affects Charitable Giving from IRAs

Posted on Mon, Mar 04, 2019

For charitable donors, the Tax Cuts and Jobs Act (TCJA) provided some tax breaks and took away others. Here's what charity-minded individuals need to know.

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Tags: IRA Distributions, Charitable Giving, Charitable Donations, Charitable Contributions, IRA

Inheriting a Spouse's IRA? Plan Carefully

Posted on Mon, Nov 13, 2017

When it comes to inheriting an IRA, spouses have more flexibility than other heirs. Here are the basic rules:

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Tags: IRA, Beneficiary Designations, RMD

Avoid Retirement Account Rollover Pitfalls

Posted on Fri, Sep 16, 2016
After retiring or leaving a job, your first big tax question might be: What should I do with the money in qualified retirement plan accounts with my former employer? These accounts include 401(k)s, profit-sharing plans and stock bonus plans. The standard advice is to roll everything over into an IRA. That advice generally makes sense, because you can take over management of your retirement funds while continuing to defer taxes on the income generated.

Arrange for a "Direct" Rollover

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Tags: IRA Rollover, IRS, IRA

Tax-Savvy Planning Strategies for Inherited IRAs

Posted on Fri, Aug 26, 2016
Say an IRA is inherited by multiple individual beneficiaries or by one or more individuals and one or more charities or other beneficiaries that aren't "natural persons." How do these scenarios affect the rules for required minimum distributions (RMDs) that apply after the IRA owner dies? And how can you optimize the tax results for individual beneficiaries?

Here, we answer these questions and explain the importance of the fast-approaching deadline on September 30, 2016, that must be met to change beneficiaries for IRAs that were owned by individuals who died in 2015.

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Tags: Tax, Tax Penalties, IRA, RMD

IRS Allows Exceptions for Missed Retirement Account Rollover Deadlines

Posted on Mon, Jul 11, 2016

You may know about the 60-day window for making tax-free rollovers of funds withdrawn from your IRA or other tax-favored retirement account. Here are a couple of things you might not know about the deadline:

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Tags: IRA Rollover, Direct Rollover, IRS, Taxes, IRA

Can You Have Too Much Money in Tax-Deferred IRAs?

Posted on Fri, Jun 10, 2016

In some cases, individuals reach a point where deferring taxes to the max is counter-productive.

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Tags: Traditional IRA, Tax-Deferred, IRA Distributions, IRA

Avoiding the 10% Penalty on Early IRA Withdrawals

Posted on Wed, Apr 06, 2016

For one reason or another, you may need to take some money out of an IRA before reaching retirement. You can withdraw money from an IRA at any time and for any reason, but it's important to keep in mind that most IRA withdrawals are at least partially taxable. In other words, you'll owe regular income tax on the amount. In addition, the taxable portion of a withdrawal taken before age 59 1/2, which is called an "early withdrawal," will be hit with a 10% penalty — unless you qualify for an exception.

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Tags: Traditional IRA, Health Insurance, Higher Education, SEP, IRA

Important Tax Figures for 2016

Posted on Tue, Jan 05, 2016

The following table provides some important federal tax information for 2016, as compared with 2015. Many of the dollar amounts are unchanged or have changed only slightly due to low inflation. Other amounts are changing due to legislation.

Social Security/ Medicare 2016 2015
Social Security Tax Wage Base $118,500 $118,500
Medicare Tax Wage Base No limit
No limit
Employee portion of Social Security 6.2% 6.2%
Individual Retirement Accounts 2016 2015
Roth IRA Individual, up to 100% of earned income $  5,500 $  5,500
Traditional IRA Individual, up to 100% of earned Income $  5,500 $  5,500
Roth and traditional IRA additional annual "catch-up" contributions for account owners age 50 and older $ 1,000 $  1,000
Qualified Plan Limits 2016 2015
Defined Contribution Plan limit on additions on Sections 415(c)(1)(A) $ 53,000 $ 53,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) $210,000 $210,000
Maximum compensation used to determine contributions $265,000 $265,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) $ 18,000 $18,000
401(k), 403(b), 457 & SARSEP additional "catch-up" contributions for employees age 50 and older $  6,000 $  6,000
SIMPLE deferrals (Section 408(p)(2)(A)) $ 12,500 $12,500
SIMPLE additional "catch-up" contributions for employees age 50 and older $   3,000 $   3,000
Compensation defining highly compensated employee (Section 414(q)(1)(B)) $120,000 $120,000
Compensation defining key employee (officer) $170,000 $170,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c)) $     600 $       600
Driving Deductions 2016 2015
Business mileage, per mile 54 cents
57.5 cents
Charitable mileage, per mile 14 cents
14 cents
Medical and moving, per mile 19 cents
23 cents
Business Equipment 2016 2015
Maximum Section 179 deduction  $500,000 $500,000
Phase out for Section 179  $2 million $2 million
Transportation Fringe Benefit Exclusion 2016 2015
Monthly commuter highway vehicle and transit pass $   255 $   250
Monthly qualified parking $   255  $  250
Standard Deduction 2016 2015
Married filing jointly $ 12,600  $ 12,600
Single (and married filing separately) $   6,300  $   6,300
Heads of Household $   9,300  $   9,250
Personal Exemption 2016 2015
Amount  $4,050 $   4,000
Personal Exemption Phaseout 2016 2015
Married filing jointly and surviving spouses Begins at $311,300 Begins at $309,900
Heads of Household Begins at $285,350 Begins at $284,050
Unmarried individuals Begins at $259,400 Begins at $258,250
Married filing separately Begins at $155,650

Begins at $154,950

Domestic Employees 2016 2015
Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. $  2,000 $  1,900
Kiddie Tax 2016 2015
Net unearned income not subject to the "Kiddie Tax" $  2,100 $  2,100
Estate Tax 2016 2015
Federal estate tax exemption $5.45 million $5.43 million
Maximum estate tax rate 40% 40%
Annual Gift Exclusion 2016 2015
Amount you can give each recipient $14,000 $14,000
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Tags: Tax, Social Security, IRA

IRS Issues Clarification of Once-a-Year IRA Rollover Limit

Posted on Mon, Nov 17, 2014

There have been several twists and turns this year relating to the "once-a-year rule" for IRA rollovers. In the latest move, the IRS has provided additional guidance in the wake of a controversial U.S. Tax Court decision applying the rule to all IRAs owned by an individual. Significantly, the IRS is providing taxpayers with greater flexibility in their year-end tax planning decisions.

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Tags: EHTC Article, Roth IRA, Traditional IRA, Newsletter, Articles, Taxable, Taxes, IRA, Penalty Tax

Tax Consequences of Borrowing From a Retirement Plan

Posted on Fri, Nov 14, 2014

If you participate in a qualified retirement plan through your job or self employment -- such as a 401(k), profit-sharing, or Keogh plan -- you might be allowed to borrow from the account. (The borrowing option is not available for traditional IRAs, Roth IRAs, SEPs, or SIMPLE-IRAs.)

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Tags: Tax, EHTC Article, Consequence, Newsletter, Articles, IRA, Retirement Plan