Estate Planning

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Watch out for “income in respect of a decedent” issues when receiving an inheritance

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April 23, 2024 ,

IRD inheritance

Most people are genuinely appreciative of inheritances, and who wouldn’t enjoy some unexpected money? But in some cases, it may turn out to be too good to be true. While most inherited property is tax-free to the recipient, this isn’t always the case with property that’s considered income in respect of a decedent (IRD). If you have large balances in an IRA or other retirement account — or inherit such assets — IRD may be a significant estate planning issue.

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Update on retirement account required minimum distributions

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March 26, 2024 , , ,

RMD

If you have a tax-favored retirement account, including a traditional IRA, you’ll become exposed to the federal income tax required minimum distribution (RMD) rules after reaching a certain age. If you inherit a tax-favored retirement account, including a traditional or Roth IRA, you’ll also have to deal with these rules.
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IRAs: Build a tax-favored retirement nest egg

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January 23, 2024 , , ,

traditional IRA

Although traditional IRAs and Roth IRAs have been around for decades, the rules involved have changed many times. The Secure 2.0 law, which was enacted at the end of 2022, brought even more changes that made IRAs more advantageous for many taxpayers. What hasn’t changed is that they can help you save for retirement on a tax-favored basis. Here’s an overview of the basic rules and some of the recent changes.

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Key 2024 inflation-adjusted tax amounts for individuals

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November 21, 2023 , , ,

2024 tax adjustments

The IRS recently announced various 2024 inflation-adjusted federal tax amounts that affect individual taxpayers.

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11 Exceptions to the 10% penalty tax on early IRA withdrawals

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November 14, 2023

early IRA withdrawal

If you’re facing a serious cash shortfall, one possible solution is to take an early withdrawal from your traditional IRA. That means one before you’ve reached age 59½. For this purpose, traditional IRAs include simplified employee pension (SEP-IRA) and SIMPLE-IRA accounts.

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Contributing to your employer’s 401(k) plan: How it works

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October 31, 2023 , ,

401k

If you’re fortunate to have an employer that offers a 401(k) plan, and you don’t contribute to it, you may wonder if you should participate. In general, it’s a great tax and retirement saving deal! These plans help an employee accumulate a retirement nest egg on a tax-advantaged basis. If you’re thinking about contributing to a plan at work, here are some of the advantages.

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Facing a future emergency? Two new tax provisions may soon provide relief

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October 24, 2023 , ,

emergency cash

Perhaps you’ve been in this situation before: You have a financial emergency and need to get your hands on some cash. You consider taking money out of a traditional IRA or 401(k) account but if you’re under age 59½, such distributions are not only taxable but also are generally subject to a 10% penalty tax.

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Inheriting stock or other assets? You’ll receive a favorable “stepped-up basis”

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July 11, 2023 , ,

estate tax basis planning

If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes.

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Benefits of a living trust for your estate

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May 30, 2023 , ,

living trust

You may think you don’t need to make any estate planning moves because of the generous federal estate tax exemption of $12.92 million for 2023 (effectively $25.84 million if you’re married).

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There’s a favorable “stepped-up basis” if you inherit property

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April 18, 2023 , , ,

property inheritance

A common question for people planning their estates or inheriting property is: For tax purposes, what’s the “cost” (or “basis”) an individual gets in property that he or she inherits from another? This is an important area and is too often overlooked when families start to put their affairs in order.

Continue Reading: There’s a favorable “stepped-up basis” if you inherit property