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Category Archives: Tax Planning

Tax-Loss Harvesting

As we approach the end of the year, please be aware of something called “tax-loss harvesting.” An investment loss (in a non IRA account) can be used for 2 different things: 1. The loss can be used to offset investment gains. 2. The losses can offset up to $3,000 of income on a joint tax […]

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Tax-Free Insurance Upgrades

Tax-Free Insurance Upgrades

Responding to the changing needs of consumers, the life insurance industry has developed some alternatives that go much further in satisfying a variety of financial needs and objectives than some of the more traditional types of insurance and annuities. Advancements Modern contracts offer much more financial flexibility than traditional alternatives do. For example, universal life […]

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What Tax-Advantaged Alternatives Do I Have?

What Tax-Advantaged Alternatives Do I Have?

A strong savings program is essential for any sound financial strategy. We take Benjamin Franklin’s saying to heart, “A penny saved is a penny earned,” and we save our spare cash in savings accounts and certificates of deposit. Investors who’ve accumulated an adequate cash reserve are to be commended. But as strange as it sounds, […]

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What Is Tax Deferral?

What Is Tax Deferral?

“Tax deferral” is a method of postponing the payment of income tax on currently earned investment income until the investor withdraws funds from the account. Tax deferral is encouraged by the government to stimulate long-term saving and investment, especially for retirement. Only investment vehicles designated as “tax deferred,” such as IRAs, plans covering self-employed persons, […]

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What Happens If I Withdraw Money from My Tax-Deferred Investments Before Age 59½?

What Happens If I Withdraw Money from My Tax-Deferred Investments Before Age 59½?

Withdrawing funds from a tax-deferred retirement account before age 59½ generally triggers a 10% federal income tax penalty; all distributions are subject to ordinary income tax. However, there are certain situations in which you are allowed to make early withdrawals from a retirement account and avoid the tax penalty. IRAs and employer-sponsored retirement plans have different […]

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Taxes on IRA and Employer-Sponsored Retirement Funds

Taxes on IRA and Employer-Sponsored Retirement Funds

Traditional IRAs and most employer-sponsored retirement plans are tax-deferred accounts, which means they are typically funded with pre-tax or tax-deductible dollars. As a result, taxes are not payable until funds are withdrawn, generally in retirement. Withdrawals from tax-deferred accounts are subject to income tax at your current tax rate. In addition, withdrawals taken prior to […]

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What Are the Tax Benefits of Charitable Trusts?

What Are the Tax Benefits of Charitable Trusts?

Americans give freely to support the causes they value, from churches, education, and the arts to medical research. Fortunately, current tax laws encourage and even reward philanthropy. Beyond the basic tax deductions for charitable giving, setting up one or both of the following types of trusts could provide financial advantages in addition to the personal […]

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What Is a Required Minimum Distribution?

What Is a Required Minimum Distribution?

A required minimum distribution (RMD) is the annual amount that must be withdrawn from a traditional IRA or a qualified retirement plan (such as a 401(k), 403(b), and self-employed plans) after the account owner reaches the age of 70½. The last date allowed for the first withdrawal is April 1 following the year in which […]

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