FINANCIaL
FIELd NOTES
End-of-Year Tax Prep Checklist
With the year coming to a close, below are 23 year-end planning tax items that I review for my clients.
Reviewed maxing out 401(k) or employer-sponsored plan.
Reviewed next year's 401(k) contribution limits and adjust withholdings in January.
Contributed to IRA or…
The Tax-Efficient Way to Consolidate Accounts
As pre-retirees prepare for retirement and the eventual withdrawal from retirement accounts, there may be some confusion about how to optimize their withdrawal strategy. Two of the most common questions I hear are “Which account should I take from?” and “What investment should I sell first?” One of the likely reasons for this confusion is that they have accounts in various places, making it difficult to organize.
One of the first steps in getting organized is to take inventory of all your accounts and then choose a primary custodian to consolidate accounts to. However, there can be significant challenges to doing so…
5 Ways to Reduce Your Required Minimum Distributions
Managing the tax impact of your Required Minimum Distributions (RMDs) is a critical aspect of your retirement plan. RMDs are mandatory withdrawals from retirement accounts that kick in once you reach a certain age, typically 73 (for those born in 1951 or later).
These distributions can lead to significant tax liabilities. However, there are strategies to minimize their impact and make the most of your retirement savings…
Navigating the Tax Torpedo: The Rising Taxation of Social Security
Many of my clients who retire in the early to mid-60s, will find that they are solidly in the 12% bracket even if they have a considerable nest egg of $1-$5M saved in retirement accounts.
For individuals in the 12% marginal income bracket, a less-discussed aspect of taxes is the Social Security "Tax Torpedo" – a phenomenon where the portion of your Social Security benefits that becomes subject to taxation increases as other income is realized…
Getting A 91% Charitable Tax Benefit In Virginia – Neighborhood Assistance Program
If you live in Virginia and are searching for charitable organizations to give to, you may want to consider the Neighborhood Assistance Program (NAP).
According to their website, “In return for [your] contributions...individuals may receive tax credits equal to 65 percent of the donation that may be applied against their state income tax liability.” That’s right - a 65% dollar-for-dollar credit on your Virginia taxes!
Tax Reporting for Venmo and Other Transaction Services
Last year the IRS began announcing changes to the tax reporting requirements for transactions on services like Venmo, Paypal, CASH, and others. Their concern was that businesses were not reporting the income that they received on these services.
They were planning to reduce the tax reporting threshold for 2022 goods and services received from $20,000/year to $600/year, which would dramatically increase the number of people subject to the reporting requirements…