What Can I Do Instead of a Stretch IRA?
Leaving behind a huge tax bill for your heirs with the stretch IRA scuttled? Here are some ways around it as lawmakers consider an updated SECURE Act.
Call us Anytime
Laurel, MD 20707
Downs Law Firm, P.C.
Home • Required Minimum Distributions;
Leaving behind a huge tax bill for your heirs with the stretch IRA scuttled? Here are some ways around it as lawmakers consider an updated SECURE Act.
Trusts give parents of special-needs children additional options for extending care and financial assistance. However, you might need some expert help.
So, you inherited a retirement account. Before you make any decisions on when and how to access the money, it’s worth familiarizing yourself with the rules that apply to different beneficiaries.
Building enough wealth to sustain yourself in retirement is a monumental achievement. However, financial planning doesn’t end when you no longer rely on a paycheck.
Beneficiary mistakes can result in retirement plan assets being transferred to unintended beneficiaries.
One wrong decision can lead to expensive consequences, and good luck trying to persuade the IRS to give you a do-over.
The Secure Act would upend 20 years of retirement planning and stick it to the middle class.
End of the year is the busiest time for charities. As the holidays near and the New Year approaches, people often think of charitable giving. Charities certainly do. There are ways to have your donations get the best results, according to the Lebanon Democrat in “A few thoughts on charitable giving, taxes.” Here are a few ways that your generosity can maximize the benefit you and your charity of choice: Bundle your itemized deductions, if possible. If you can time the payment of qualifying deductible expenses, including charitable donations, do so in alternate years. This increases the chances that you’ll be able to itemize your deductions. You may want to notify the charity that you are giving this year is a larger gift, because it will be covering a two-year period. Select the right assets to contribute to a charity. For outright gifts made in your lifetime, consider using highly appreciated assets, like stocks. This will allow you to bypass owing capital gains taxes on the appreciation and claim the entire value of the assets, as a charitable contribution. If you make a donation using this method to fund an income-returning gift or a charitable gift annuity or charitable remainder trust, you delay the recognition of the capital gain. In most cases, you can pay this in smaller amounts, over a period of years. What if you want to make a gift that also generates income? Use a charitable gift annuity or a charitable remainder trust. These gifts typically require significantly higher values, so you may be able to itemize in the year they are funded. However, only a portion of the contribution is deductible. That is because the donor receives income for life or for a certain amount of time. These gifts are usually funded with stock, cash or real estate. Taxpayers who are 70½ years old or older and required to take minimum distributions from retirement accounts, may have distributions made directly from their account to a qualified charity. If this transaction is done properly, the amount of the distribution is not added to taxable income. You will not receive a charitable deduction using this method, but you can lower your taxable income for the year and give your charity of choice a much-needed donation. Lastly, consider adding bequests and beneficiary designations in your end-of-life planning. Part of your legacy can include charitable gifts. There are a few ways to do this: designate a percentage of your estate to be donated to charity, specify a charitable organization as the full or partial beneficiary of a life insurance policy, an investment or bank account or any account that transfers by designation or leave a dollar amount or property to a charity. An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and can include charitable giving. Reference: Lebanon Democrat (Nov. 21, 2018) “A few thoughts on charitable giving, taxes”