The IRS recently announced its annual cost-of-living adjustments for certain retirement plan limits for 2018. Any adjustments, as shown below, are relatively small. Limit for 2017 Limit for 2018 Maximum annual dollar benefit for a defined benefit plan $215,000 $220,000 Maximum dollar limit on additions to [...]
If you want to move funds from one IRA to another—say, for investment purposes—you can use a rollover, but only once a year. Under the Tax Court’s interpretation of a recent case, this applies to all your IRAs, not just one specific, separate IRA. However, the once-a-year limit does not apply to trustee-to-trustee transfers [...]
At one time, pension plans and other qualified retirement plans were usually offered only by larger companies, but now, many small companies have caught up. In fact, if you are self-employed with just one or two employees—or maybe just yourself—you still have plenty of retirement plan options at your disposal. Here are four popular [...]
A 401(k) plan can be a win-win situation for employees and employers. Just take a quick look at the payoff. *For employees: You can defer up to $18,000 of salary to your account in 2017 ($24,000 if you are age 50 or older), before any employer-matched contributions. Contributions may grow without any tax erosion until [...]
Consider estate-planning implications If you are getting remarried, you may face some special estate-planning challenges, especially if you have children from a prior marriage. The following 10 tips may help. 1. Talk with one another. Do not start off a marriage by hiding financial interests or concerns from one another. For instance, if you intend to [...]
Benefit from a rollover to an IRA If you receive a distribution from an employer’s retirement plan, such as a 401(k), you are generally required to pay ordinary income tax on the payout. However, with a timely maneuver, you can continue to postpone paying the tax until you are ready to make withdrawals. Basic rules: [...]
People are living longer these days than they did five, 10 or 20 years ago. Of course, that is good news, but it also means that you may have to provide a bigger cushion in retirement than you had initially intended. What’s more, uncertainty over future Social Security benefits as baby boomers continue to swell [...]
The penalty for failing to complete an IRA or a plan rollover in time can be severe. Unless you obtain a waiver from the IRS, the transfer is treated as a taxable distribution even if the failure is inadvertent. However, a new ruling provides some taxpayers with relief. Background: If you take a withdrawal from [...]
If your teenager earned money from a summer job, you might encourage a practical purpose for some of the money: a Roth IRA. There is no age restriction on Roth contributions as long as the child has “earned income,” such as wages. Contributions for 2016 are limited to the lesser of the earned income [...]
With a new administration taking shape in our nation’s capital after the elections, you can expect that significant tax reforms will be debated, and perhaps enacted, in the near future. But the greatest impact on year-end tax planning in 2016 will likely derive from what happened late last year, not what will happen next year. [...]