FINANCIaL
FIELd NOTES
Tax-Wise Giving Strategies, Part 1 – Bunching Gifts & Donor-Advised Funds
Most people begin to think about charitable giving strategies at the end of the year. However, I think January is the time to plan for the year ahead because there are many strategies that if implemented would change the way you give throughout the year.
Tax savings is not the reason we give to the charities we value. However, if you are planning to give, let’s not leave Uncle Sam a tip! Bunching gifts is a great way to do that…
Is Saving In a 529 Plan a Mistake?
529 plans have long been the go-to for college savings. And for good reason - all the growth is tax-free if used for qualified educational expenses. But in recent years they have come under question as parents and grandparents wonder if all that college savings is for waste.
After all, many expect the education system to have some type of reform as the cost of college has ballooned over the past 40 years…
How to Pay 0% Capital Gains Tax
When you sell an investment for a gain outside of a retirement account, you typically pay “capital gains tax.” For example, if you bought an index fund for $10,000 and sold it for $15,000, you would have to report the $5,000 gain as income on your tax return.
There are only 3 main federal tax brackets for capital gains. You are either taxed at 20%, 15%, or even 0%…
Roth Conversion Ladder Strategy
Roth conversions are the process of transferring money from tax-deferred accounts, such as 401ks or IRAs, to tax-free accounts like Roth 401ks or Roth IRAs.
When you move money from one account to the other, you generally pay taxes on the full amount converted. The money then grows tax-free from there on out.
One strategy to consider is to implement small Roth conversions, a little at a time, over multiple years…
7 Strategies For Lowering Investment Taxes
A friend of mine was recently complaining to me about a tax bill coming their way from the sale of investments. I joked that I would gladly pay his tax bill if he gave me his investment gains…he declined.
Taxes are an inevitable part of investing but generally, it is a good problem to have since it means you made money. However, there are several strategies to consider to make sure you don’t pay more than your fair share to Uncle Sam.
Roth Conversions When The Market Is Down
When I evaluate Roth conversion plans, I typically wait until the end of the year to complete the conversions so I can ensure that income actually ended up being what was projected.
However, if there is volatility in the stock market, it can be a great benefit to convert while the market is down…