FINANCIaL
FIELd NOTES
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…
Maximizing Your Charitable Deductions with a Donor Advised Fund
A few years ago, Congress passed legislation that changed the standard deduction, and with it, the way many people gave to charities.
Charitable contributions are an itemized deduction, as opposed to the standard deduction. So, if you don’t have enough itemized deductions to increase it over the standard deduction, there is essentially no tax benefit for your donation. This is where a Donor Advised Fund (DAF) comes in….
A Special 2021 Tax Deduction
If you give to charity but take the standard deduction, you typically do not get a tax benefit for your charitable giving. Because of this, many individuals stopped recording their charitable gifts on their tax return because it was simply a waste of time. However, your 2020 taxes are a bit different. Congressed authorized a special charitable giving deduction last year to help increase donations, as many charities suffered through the pandemic.