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Category Archives: Retirement Planning

IRA Withdrawal Planning Can Save on Taxes

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on December 21, 2020 by Lake Wylie Tax Services StaffDecember 21, 2020

IRA Withdrawal Planning Can Save on TaxesAdvance planning can, in many cases, minimize or even avoid taxes on IRA distributions and other qualified plan distributions. When contemplating future retirement and when to begin tapping taxable IRA and other qualified retirement accounts, taxpayers need to consider a number of important issues.

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Posted in Retirement Planning | Tagged IRA, Tax Planning

Keeping Your Designated IRA Beneficiary Current is Important

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on September 29, 2020 by Lake Wylie Tax Services StaffSeptember 29, 2020

Update your IRA BeneficiariesKeeping your designated IRA beneficiary current is very important. You may not want your account going to your ex-spouse, and you certainly do not want a deceased individual to be your beneficiary.
What’s more, a periodic review of your named IRA beneficiaries is vital to ensure that your overall estate planning objectives will be achieved in light of changes in the performance of your IRAs and your personal, financial, and family situations. For example, if your spouse was named your beneficiary when you first opened the account several years ago and you’ve subsequently divorced, your ex-spouse will remain the beneficiary of your IRA unless you notify your IRA custodian to change the beneficiary designation.

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Posted in Retirement Planning | Tagged IRA

What’s Best for You – Traditional or Roth IRA?

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on April 28, 2020 by Lake Wylie Tax Services StaffApril 28, 2020

Traditional or Roth IRAThe tax code offers two types of IRAs; one is referred to as the traditional individual retirement account (IRA), so named because it was the first type of IRA available, having been created by Congress back in the 1970s. The second type is the Roth IRA, established in 1997 and named after William Roth, who was a senator from Delaware. Which one is best for you?

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Posted in Retirement Planning | Tagged IRA, Retirement, Roth IRA, Traditional IRA

New Tax Rules for Retirees

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on March 10, 2020 by Lake Wylie Tax Services StaffMarch 10, 2020
Roth IRA Planning for comfort in retirement

– Creative Commons

If you are at or approaching the age of 70, you need to be aware of some changes that Congress made to the tax laws, effective starting in 2020. These changes will have direct impacts on you and the decisions you make related to your retirement accounts. Not only will they affect your federal taxes, but depending upon your state’s income tax laws, they may impact your state tax status as well.

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Posted in Retirement Planning | Tagged Retirement, Tax Planning

New Twist Added to the IRA-to-Charity Provision

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on February 18, 2020 by Lake Wylie Tax Services StaffFebruary 18, 2020

IRA to Charity Rules ChangeEver since 2006, individuals age 70½ or older have been able to transfer up to $100,000 annually from their IRAs to qualified charities. These transfers are referred to as qualified charitable distributions (QCDs), and here is how this provision, if utilized, plays out on a tax return:

(1) The IRA distribution is excluded from income;
(2) The distribution counts toward the taxpayer’s required minimum distribution (RMD) for the year; and
(3) The distribution does NOT count as a charitable contribution.

At first glance, this may not appear to provide a tax benefit. However, by excluding the distribution, a taxpayer with itemized deductions lowers his or her adjusted gross income (AGI), which helps with other tax breaks (or punishments) that are pegged at AGI levels, such as for medical expenses, passive losses, and taxable Social Security income. In addition, non-itemizers essentially receive the benefit of a charitable contribution to offset the IRA distribution.

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Posted in Retirement, Retirement Planning | Tagged Charitable Giving

Thinking of Tapping Your Retirement Funds Early? What You Need To Know

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on November 21, 2018 by Lake Wylie Tax Services StaffNovember 21, 2018

RetirementIf you are suddenly in need of a substantial amount of cash, probably the last thing you should do is tap your retirement funds. They are the key to a financially comfortable retirement. The younger you are, the less likely you are to think about saving for retirement, but you certainly don’t want to end up living off of only Social Security. However, there are times when there might not be any other alternative than dipping into your 401(k), IRA or other retirement plan. In that case, you have to be concerned not only with any tax liability, but also early withdrawal penalties if the funds are withdrawn before reaching age 59 1/2 Plus, some distributions may only be partially taxable and some not taxable at all, while others are fully taxable.

Like everything in the U.S. tax code, the rules relating to pension or other retirement plan distributions are complicated and governed by a variety of provisions. This article describes these various rules so you can see how they would apply to a withdrawal you might be contemplating.

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Posted in Retirement, Retirement Planning | Tagged Early Withdrawal from Retirement Account, IRA

Prioritizing and Maximizing Retirement Savings – Social Security Alone Won’t Be Enough

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on November 9, 2018 by Lake Wylie Tax Services StaffNovember 21, 2018

What you need to know about Retirement IRAThe Social Security Administration (SSA) recently announced the inflation-adjusted increase in benefits for 2019. SSA’s announcement states that Social Security beneficiaries should expect a cost-of-living increase of 2.8%. However, the same announcement says that for those who are retired at full retirement age, the maximum monthly benefit will go from $2,788 to $2,861, a 2.62% increase of $73 a month. Either 2.62% or 2.8% isn’t much in the overall scope of things, considering part of that increase goes to pay for Medicare premiums and copays for medication. Those retired with only Social Security income struggle just to survive month to month.

This should be a wakeup call for still-working individuals who are living (and spending) for the moment and have no, or minimal, retirement plans or retirement savings. It’s almost imperative that individuals include contributions into retirement savings in their budgets, in one form or another, or the inevitable golden years won’t be so golden.

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Posted in Retirement, Retirement Planning | Tagged Retirement, Tax Planning

IRA Missteps to Avoid

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on August 23, 2018 by Lake Wylie Tax Services StaffJanuary 23, 2020

IRA Missteps to AvoidIf you have an IRA account or are considering one, there are a number of potential missteps you will want to avoid. Some of them can lead to unwanted taxes and penalties, and of course, we are talking about your retirement funding, so it is an important issue. Here are a number of issues to keep in mind:

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Posted in Retirement Planning | Tagged IRA
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