You can't have your cake and eat it, too, but this tax planning strategy lets you have a tax break and repeat it, too.
Pre-retired dentists, doctors and lawyers as well as other independent professionals may be able save tens of thousands of dollars in income taxes annually during their peak income years under the new federal tax regulations. The new rules are complex. Here are 10 things pre-retired business owners need to know about qualifying for a 20% reduction in qualified business income under Section 199(A) of the new Internal Revenue Code:
Second-quarter economic growth surged 4.1%, the best it's been since the third quarter of 2014.
If you think you're no longer allowed to deduct items like charitable donations on your income tax return, think again.
Legendary singer, Aretha Franklin succumbed to pancreatic cancer at the age of 76 on August 16, 2018, and she was accorded funeral rites reserved for music royalty. At once humble and a diva, the Queen of Soul, who famously demanded respect, sadly died without a will.
Among the most prized tax deductions to get trimmed by the Tax Cut And Jobs Act was the monthly mortgage interest. Should you pay off your mortgage, if your mortgage interest deduction is gone? The answer more often now is "Yes," providing you can afford to retire the debt. If you can't afford that now, aim to do it as soon you can.
Medical expenses can run up your expenses a lot. For that reason, the new tax law gives people a break by sweetening the long-time tax deduction for health care, at least for a couple of years.
This is a good time to consider converting a traditional individual retirement account into a Roth IRA. Tax rates are low but unlikely to stay that way. Here's a long-term strategy that takes advantage of the current tax policy and economic fundamentals - a tax-efficient retirement investment and avoids a new twist in the Tax Cut And Jobs Act that penalizes widows.
Although a picture is said to be worth a thousand words, out of respect for your time, here are 290 words about this chart of U.S. stock market performance over an amazing decade.
The new tax law doubles what you can leave loved ones' tax free when you die and that's really bad for your alma mater. Tax breaks for donations to your alma mater may no longer make the grade with you. Here's why:
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The myRa Is Cut Short, But Other Options Abound
The myRA is going the way of the VCR. Citing unsustainable costs, the Treasury Department has announced it is closing down the program for this retirement savings vehicle. Participants will be notified about their options for moving funds into other investments.
The myRA was pitched as a way for moderate-income people to save for retirement and was designed to resemble the Roth IRA.
Just as in a Roth IRA, MyRA contributions were made with after-tax dollars, and withdrawals from the account during retirement were exempt from federal income tax. Unlike with a Roth, however, the MyRA had only one investment option: U.S. government savings bonds. So, you weren't risking principal, but yields were low.
Contributions were limited to $5,500 a year ($6,500 if you were 50 or older), but availability of this saving vehicle was phased out for upper-income taxpayers. And once your account balance reached $15,000, you had to roll over the funds to a Roth IRA, letting you choose from a wider array of investment options.
According to the Treasury Department, the myRA program has cost taxpayers $70 million, with projections that it would take $10 million a year to keep it going. It made the decision in mid-2017 to shut down the program. Yet most retirement savers still have numerous other options at their disposal.
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