Self-directed IRAs and 401(k)s are increasingly popular. CPAs are well-positioned to help clients ensure their retirement savings in these accounts do not fall into a prohibited transaction trap. To read the full article in AICPA, click: Don’t Let Clients’ Retirement Fall into this Trap.
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We’re quickly approaching the time of year when most contributions are made to IRAs and Roth IRAs. But there are limits to how much can be contributed to an IRA, and exceeding them can result in costly penalties. Ed Slott, CPA, tells us what to look out for. To read the full article in Financial Planning, click: A Tax Nightmare: Excess IRA Contributions.
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How to Make up for Lost Time with Retirement Savings People who are behind schedule on retirement savings can take several steps to make up the difference. These include making use of catch-up contributions, selecting funds with low investment fees, and postponing required minimum distributions, if possible. Damian Davila offers some useful tips. To read the full article in Wise Bread, click: 7 Retirement Planning Steps Late Starters Must Make.
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Looking Beyond the 401(k) to Save for Retirement If proposals to curb the size of individual retirement accounts and 401(k)s take effect, clients with large IRAs and 401(k)s will need to consider alternate methods of saving for retirement. Darla Mercado, Personal Finance Writer, discusses a few options including, deferred compensation plans, health savings accounts, and after-tax contributions to 401(k)s. To read the full article in the CNBC click: Big IRAs and 401(k)s are at Risk: Where Else to Save?
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Hidden Headaches of Jointly Owned Annuities Annuities are considered wonderful vehicles for savers, no more so than for married couples. The opportunity to obtain tax-deferred growth in a non-qualified deferred annuity is a key feature, particularly for individuals in high tax brackets who have already maxed out other available tax shelters. However, annuities present a significant complication. Michael Kitces, FinancialPlanning contributing writer, does an excellent job describing what to look for. To read the full article in the FinancialPlanning, click: Hidden Headaches of Jointly Owned Annuities.
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Three Pointers for Choosing a Company Retirement Plan Simple IRAs and 401(k)s are typically the best retirement-plan options for companies with more than 10 or 15 employees. Kathy Kristoff, finance writer, explores what to consider when setting up such plans, including the safe-harbor provision and the discrimination tests that apply to 401(k) plans. To read the full article in Inc., click: Pick the Right Retirement Plan–for Both You and Your Employees.
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There’s a window of opportunity before clients reach age 70 in order to mitigate some of the bite. Paul Norr shares some great tips to prepare your clients for their future years. To read the full article in Financial Planning, click: Avoid the Social Security Tax Trap.
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The Many Tax Benefits of Making Charitable Contributions With IRA Distributions Now that the provision permitting these contributions is permanent, taxpayers can take maximum advantage of this rule, even using life insurance to increase the gift to charity. David K. Smucker, CPA, Advanced Consulting Group director with Nationwide Insurance, explains that the recent legislation making the $100,000 charitable IRA contribution permanent allows taxpayers to take full advantage of the numerous tax benefits of these contributions. To read the full article in The Tax Adviser Tax Insider, click: Charitable IRA Distributions: A Great Opportunity.
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How Delaying Retirement One Year Provides Financial Advantages Working just one additional year before retirement can increase your Social Security benefits and provide other financial advantages. Emily Brandon, senior editor for Retirement at U.S. News, discusses this and that an additional year also means continuing to receive company benefits instead of paying for them yourself. To read the full article in U.S. News & World Report, click: How Working an Extra Year Improves Your Retirement Finances.
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This article covers recent developments in employee benefits, examining, among other things, the Affordable Care Act’s complicated reporting requirements, the proposed fiduciary responsibility rules, and updated procedures to correct employee plan failures. Terry Richardson, principal, and Bryce Tholen, manager, both with PwC LLP in Dallas, take an in depth look at what’s involved.. To find out more on The Tax Adviser article, click: Current Developments in Employee Benefits and Compensation.
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Because of stock market volatility, taxpayers may want to convert to Roth individual retirement accounts. Taxpayers, after converting to the Roth, have until October 15 to undo it, as long as the conversion is set up correctly, says Robert Keebler, partner, Keebler & Associates LLP, in The Ultimate Estate Planner Blog. Image courtesy of Stuart Miles/FreeDigitalPhotos.net
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Thanks to the U.S. Senate, IRA owners age 701/2 and older have until Wednesday, December 31, 2014, to make a direct transfer from their account to an eligible charity of their choice of up to $100,000 without paying taxes on the distribution. The senate approved the direct rollover in addition to more than 50 other tax provisions as part of the extender’s package on December 16, 2014—just two weeks shy of the year-end deadline. This option, which first became available in 2006, can be a smart alternative for some IRA owners by allowing them to take their mandated annual required…