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Tax Planning

What Now? A Widow's Story About Making the Right Financial Decisions

In 2006, Alan, a strapping young man who had just turned 50, collapsed and died of a massive heart attack while attending Sunday morning Mass with his wife Karen. Alan and Karen co-owned a business. Alan was a contractor and Karen handled the accounting and billing. Karen was fairly savvy financially. However, because she felt she had to get everything settled “right away” after Alan’s passing, she made several costly mistakes. It's a story you and your clients can learn from.

Widows Can Now Take Control of RMDs When Spouse Passes Away

According to the US Census Bureau, approximately 800,000 people are widowed each year in the United States, and “nearly 700,000 of them are women who lose their husbands.” One of the greatest economic challenges for a large portion of widows in America is higher income taxes when their spouse passes away. Don Rasmussen, member of Ed Slott's Elite IRA Advisor Group, outlines how widows can take control of required minimum distributions when their spouse passes away ... lowering their tax bill.

What TransAmerica Retirement Survey Says About Retirement Outlook

Last month TransAmerica released its 17th annual Retirement Survey of Workers. This year’s study, entitled Prospectives on Retirement: Baby Boomers, Generation X, Millennials, yielded some incredible information. Here are some of the most fascinating takeaways I found as I read through the study.

Planning With a Special Needs Child Must Span Two Generations

Even though it was 25 years ago, it seems like yesterday that my wife and I had our son evaluated by a pediatric specialist who told us our son would never live independently. When our child was diagnosed with a special need, our initial focus was on learning about the disability (autism), finding therapists and researching educational rights. Preparing for our child’s financial future (and even your own) was not an initial priority. The reality is that when there is a disabled child, the family financial plan has to span two generations rather than one. The following plan needs to take into account the potential for government benefits and, with any comprehensive plan, has to address how to minimize taxes.

How to Pay No Tax on Your Capital Gains Using a Free Step-Up in Basis

In order to encourage investments in companies, the tax code provides for the preferential treatment of capital gains (gain on property, such as a stock) if the investment being sold had been held for greater than one year. To illustrate this point, examine the following chart, which summarizes the ordinary income tax rates vs. the long-term capital gains rates that apply at various income levels.

AICPA’s National Advanced Estate Conference: RUFADAA Is Most Important Law You Don't Know About

Greetings from the 2016 AICPA National Advanced Estate Planning Conference! Having presented the last of my three sessions here on Monday evening, I’ve been enjoying the rest of my time by meeting many CPAs and other professionals here, as well as attending a host of excellent sessions. One session which I particularly enjoyed was presented by Anne Coventry and Karin Prangley, and covered the latest developments in the area of digital estate planning. That may not seem very important to you at first glance, but the reality is that it could be VERY important. And that importance is only likely to grow in the coming years.

What You Must Know About Taxation of EE Series Bonds

Remember those savings bonds Grandma and Grandpa bought for you every year to put away for school? If you’re like most people, you – or your parents – put them in a drawer or safety deposit box until they were needed. After all, how much is there really to do with them? The answer, at least from a tax perspective, can be surprising. Here are five things you should know about the tax treatment of Series EE Bonds.

What is Escheatment and How Does it Affect Your Retirement Accounts?

How is it determined that an IRA has no owner? This will depend on both state law and the procedures in place at the institution holding your IRA or employer plan assets. If you have an IRA or an old employer plan where you are no longer making contributions, then there are no transactions taking place within the account. This could leave the account open to escheatment.

11 NUA Don'ts

As with most IRA/tax strategies, the net unrealized appreciation (NUA) strategy comes with a few “don’ts.” Any one of these could mean a loss of your ability to take advantage of the NUA tax benefit.

Why NUA is the Tax Break You Don't Want to Miss

When you leave an employer, you may assume that the right move is to roll over your retirement funds to an IRA. Not so fast! For many people, a rollover will be a smart decision. However, don’t assume that is always the way to go. In some cases, as strange as it may sound, taking a lump sum distribution and paying taxes is a smart choice. You may be wondering how that could be possible. Read on to see why a tax break called Net Unrealized Appreciation (NUA) may make taking that distribution a good choice.

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