Using the Prohibited Transaction Rules to Your Advantage
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
1w ago
Is there a way to use the prohibited transaction rules for IRAs in your favor? Hypothetically, there seems to be. The post Using the Prohibited Transaction Rules to Your Advantage appeared first on Getting Your Financial Ducks In A Row. Related posts: Organization, Efficiency & Discipline Make the Most of the Gift of Time How PIA Relates to Your Benefit ..read more
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Earned Income Credit and Due Diligence
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship), Jim Blankenship
2w ago
Do you know what due diligence is for claiming credits on your income tax return? If you use a preparer, you can bet he or she does. The post Earned Income Credit and Due Diligence appeared first on Getting Your Financial Ducks In A Row. Related posts: 10% Penalty Applied to Roth Conversion? Maybe Social Security Earnings Test The Net Investment Income Tax and How to Avoid It ..read more
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What to Expect If You Owe Money to the IRS
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship), Jim Blankenship
1M ago
Photo credit: jb Often we find ourselves in situations that we never dreamed of – like owing the IRS a considerable amount of money. Maybe you earned a lot more than you expected, perhaps you had a filing status change that dramatically changed your tax rate, or maybe there was a change to your deductions. It doesn’t matter, you’ve found yourself in the situation – what should you expect? While the majority of Americans get a tax refund from the Internal Revenue Service each year, there are many taxpayers who owe and some who can’t pay the tax all at once. The IRS has a number of ways for pe ..read more
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The Importance of a Taxable Investment Account
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
2M ago
Photo credit: jb I’ve written about this topic a few times in the past, such as in this article on tax diversification of your investment accounts. It’s an important topic, but probably the most important subtopic is having a significant portion of your investments not only in tax-deferred accounts, like 401(k) or IRA, but also in regularly-taxed accounts. Roth-type accounts are also critically important, but given the limited availability and costly nature of getting assets into a Roth-type account, I’ll focus for now on the importance of the taxable investment account. With a taxable inves ..read more
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Age Adjustments for Social Security
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
2M ago
Photo credit: jb With all the talk about how Social Security is running out of money (or will be, currently projected at 2035), one of the topics that often comes up is the age limits for benefits. As you’re probably aware, the Full Retirement Age (FRA) has been adjusted upward from the original age 65, gradually to age 67 for folks who were born in 1960 or later. This upward adjustment was put into place with the 1983 amendments, ostensibly to reduce the outflows for the system. With that adjustment in place, and the resulting benefit that the system has received from making that change, yo ..read more
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Leaving Your IRA to Your Family First, Then to Charity
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
2M ago
Photo credit: jb Suppose you have a situation where you’d like to leave your IRA (or at least some of it) to a family member or a group of beneficiaries, and then leave the remainder of the IRA to a charity of your choice. One way to do this is to split the beneficiary designation between your family members and the charity. This is a simple way to make this designation, but it might not really achieve the purpose you’re hoping to. Suppose you’d like to make certain that a non-spouse family member has adequate income from your IRA for the remainder of his or her life, but you don’t want to o ..read more
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Roth IRA for Youngsters
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
3M ago
Photo credit: jb Many times it is among the best of ideas to establish a Roth IRA for your child. This way, your child can benefit from the long-term growth in the account and have a very good head start on retirement savings for later in life. There are other benefits, including the fact that retirement funds are not included when financial aid is being calculated for college expenses, as well as providing funds for the child to use when the time comes to buy a house, for example. One thing can cause a real problem though: if you undertake to make contributions to a Roth IRA for your child ..read more
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Is It Really Allowed – Making a Non-Deductible IRA Contribution Followed By a Roth Conversion?
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
3M ago
Photo credit: diedoe I occasionally receive this question: Can I make a non-deductible IRA contribution, and then shortly after convert the IRA into a Roth IRA? My income is too high for me to make a contribution directly to a Roth IRA. (This is also known as a back-door Roth IRA contribution.) According to the rules in place today, you can do this. Here are the applicable rules: There is no income limit for an individual to make a non-deductible IRA contribution. There is no income limit for an individual to make a Roth Conversion. There is no time limit on how long a contribution must be ..read more
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How PIA Relates to Your Benefit
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
3M ago
Photo credit: jb If you’ve been looking into your Social Security projected benefits for long, you’ve probably run across the term Primary Insurance Amount, or PIA. Click on the link to see how the PIA is calculated if you need more background information on the PIA. What’s important to know is that the PIA is essentially the amount of your retirement benefit if you file for it exactly on your Full Retirement Age (FRA) month. But it’s quite common for an individual to file for retirement benefits either before or after FRA. If you file for your retirement benefit before or after FRA, even by ..read more
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Spouse May Be Your Best Option for IRA Beneficiary
Getting Your Financial Ducks In A Row
by jim@blankenshipfinancial.com (Jim Blankenship)
4M ago
Since a surviving spouse gets the most flexibility and tax breaks of all possible beneficiaries (other than perhaps a charity), it seems that choosing your spouse as the beneficiary of your IRA may be the best way to go. This is partly due to the availability of delaying taking distributions. Any other eligible designated beneficiary must begin taking Required Minimum Distributions (RMDs) by the end of the year following the year of the original IRA owner’s death. The spouse beneficiary may defer distributions to the year in which the deceased would have reached RMD age, which would be 73 or 7 ..read more
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