Author Archives: c05572520

New IRS Tax Withholding Estimator – January 16, 2020

The IRS has created a new Tax Withholding Estimator, based on the significant changes under the Tax Cuts and Jobs Act.  The new Tax Withholding Estimator offers workers, as well as retirees, self-employed individuals and other taxpayers, a simpler tool to determine the correct amount of income tax they should have withheld from wages and pension payments.

The Estimator allows for wages from multiple jobs, spousal wages, and other sources of income, to determine the most accurate withholding amount.

The Tax Withholding Estimator can be found at

Year-End Retirement Planning Checklist – December 31, 2019


Holidays can be stressful, but take advantage of any travel delays or down time with a cup of cocoa and go over your year-end financial and retirement planning checklist.

Yes, reviewing this now can save you from tremendous stress down the road. Here are just a few basic issues that can cause unintended results and penalties if left unchecked:

  • All of my required minimum distributions (RMDs) for 2019 have been satisfied.
  • All of my RMDs from my inherited IRAs, Roth IRAs, or other retirement accounts have been satisfied.
  • All of my inherited retirement accounts using the separate account rule have
    been split.
  • I have conducted a beneficiary review for all my retirement accounts and all of my beneficiary forms are up to date.
  • I have conducted a custodial review and my IRA custodian offers my heirs a Multi-Generational strategy.
  • I have complied with my 60-day rollover deadline.
  • I do not anticipate owing any penalties for IRA errors.
  • I have checked all of my financial statements for accuracy.
  • All distribution or contribution reporting corrections have been made.

Tax Tip Tuesday – Diversification – July 23, 2019

Are  you  familiar  with  strategies  that  are  available  to  help  you  spread  your  investments   across  taxable,  tax-­‐deferred  and  tax-­‐free  accounts?

The  subject  of  “diversification”  is  often  discussed  when  topics  such  as  mutual  funds,   stocks,  bonds,  real  estate  and  other  investment  classes  are  on  the  table.  However,  what   about  tax  diversification?

The  primary  reason  for  developing  a  tax  diversification  strategy  is  it’s  impossible  to  know   precisely  what  your  tax  rate  will  be  throughout  your  retirement  years,  especially  if   retirement  is  still  many  years  away  for  you.

Putting  all  of  your  investments  in  only  one  type  of  account  is  unlikely  to  be  the  most  tax-­‐ efficient  strategy.    Tax  diversification  can  help  protect  your  investments  and  minimize   risk  from  significant  tax  rate  changes.

Give us a call so that we can set aside a time to discuss your investments and make sure they are set up the way you want!

Tuesday Tax Tip – Protecting Yourself from a Plunging Market – May 14, 2019

Just because the market takes a dive, doesn’t mean your nest egg has to. Despite market volatility, anybody with a safe, guaranteed investment option can sleep well knowing their money is right where it should be…protected from market volatility.

Fixed Indexed Annuity (FIA) owners, for example, have been sleeping well these past few days knowing their hard-earned money and retirement assets, such as their IRAs, are protected from sudden market downturns.

Unlike Variable Annuities, which are securities investments, FIAs are safe insurance products and only insurance licensed professionals may offer these safe tools.

Key FIA benefits include:
• No Loss of Principal
• Locked in Gains
• A Guaranteed Stream of Income for Life
• Liquidity
• Tax-Advantaged Accumulation

Give us a call today to determine whether an FIA is an appropriate option to complement your retirement planning strategy and ask yourself…

Where do you want to be?


Tuesday Tax Tip – What A Will, Will and Will Not Do – April 30, 2019

Sound confusing? Many Americans are confused by what can and what cannot pass by their will. Many also assume that a will takes care of everything.

There are several situations in which a will does not control the transfer of an asset. Disposition of property may be determined by state law, federal law or a private contract, depending on the form of ownership of an asset. For example, IRA assets pass to heirs via beneficiary designation forms, not a will.

Regardless of how perfect and well drafted a last will and testament may be, the terms of your will do not override the terms of your insurance policies, IRA or 401(k) custodial agreement.

It is critical to make sure all beneficiary designation forms are up to date. If you made a beneficiary designation mistake, it could be too late to fix it – some errors cannot be corrected. Do a beneficiary review at least once per year and any time a life changing event occurs such as a birth, death, marriage, divorce or other event that impacts your assets.

Here are just a few common assets that do not pass through a will:

 Joint Tenancy Property
 401(k)
 POD Account
 Pension Plan
 Totten Trust
 Annuity
 Community Property with Right of Survivorship
 Life Insurance Policy


Tuesday Tax Tip – Naming a Trust as Your IRA Beneficiary – 4/23/19

Do you plan to name your trust as the beneficiary of your IRA? While a trust may be ideal for most of your estate, naming a trust as the beneficiary of your IRA is not usually the most tax efficient move.

Even assuming a trust has been properly drafted (commonly called a “see-through trust”), a Multi-Generational IRA (MGIRA) strategy is not available if there are multiple individual beneficiaries.

Beneficiaries will all be stuck using the oldest trust beneficiary’s life expectancy for purposes of calculating RMDs. The opportunity for the youngest trust beneficiaries to enjoy tax-deferred distributions over their (usually longer) individual life expectancies is eliminated.

When it comes to taxes, RMDs will be taxed based on the individual income tax rate of the RMD recipient. This means that if RMDs are “trapped” in the trust, trust tax rates apply. Trust taxes hit the highest bracket (37%) for trust income over $12,750 in 2019.

There will always be situations where a trust makes sense. However, make sure you have all the facts and seek advice from qualified advisors and qualified trust attorneys. They will help ensure your trust is set up to operate according to your distribution plan and will satisfy your personal planning goals.

Tuesday Tax Tip – Are You Responsible for a Gift Tax? – 2/6/19

If you give a non-spouse a gift valued more than the annual exclusion amount, you could be  subject to a gift tax.

For 2019, the annual federal gift tax exclusion amount for gifts to a non-spouse is $15,000 per person, per year.

If you are married, you and your spouse may give up to $30,000, per person, per year, free from federal gift tax.

Although there are no immediate tax concerns for the recipient of a gift because federal gift tax is imposed upon the donor, the recipient could be liable for capital gains tax in the future. Highly appreciated gifts such as real estate or stocks will render the recipient liable for capital gains tax when he or she decides to sell the gift at a later date.

The general rule from the IRS is that the recipient’s basis in the gifted property is the same as the basis of the donor. The IRS provides this example: If you were given stock that the donor had purchased for $10 per share (which was also his/her basis) and you later sold it for $100 per share, you would pay tax on a gain of $90 per share.


Tuesday Tax Tip – Prohibited Transactions and IRAs – 1/15/19

A prohibited transaction is an impermissible transaction under the Internal Revenue Code that occurs between an IRA and a disqualified person.

Disqualified persons include the IRA owner, the owner’s spouse, the owner’s lineal descendants (and their spouses), IRA beneficiaries and any IRA fiduciary.

If you engage in a prohibited transaction, under IRS rules, your entire IRA will lose its status as an IRA. Your tax-deferred IRA will then be treated as though the assets were distributed to you as of the first day of the year the prohibited transaction occurred. Ordinary income tax will be due on the distributed amount and if you are under age 59½ you will also be subject to a 10% early distribution penalty.

Below are just a few common examples of traditional IRA prohibited transactions:

• The sale, exchange or leasing of property involving your IRA
• Borrowing money from or lending money to your IRA
• Receiving personal benefits or payments from your IRA
• Using your IRA as collateral for a loan
• A transfer of your IRA plan income or assets to, or use of the assets by or for the benefit of,
a disqualified person

Strategy Tip: If you are unsure whether the transaction you wish to participate in with your IRA is
prohibited (a lot of self-directed IRA owners have faced this problem) you may want to consider
splitting your IRA prior to the transaction. You will essentially carve out the amount you want to
use from your original IRA, creating a separate IRA specifically for the questionable transaction.
This way, if it turns out that the transaction you wish to engage in is in fact a prohibited
transaction, it will only impact this second IRA and you avoid destroying your entire original IRA.


Check Withholding Now To Avoid Tax Surprises Later

With the year more than halfway over, the Internal Revenue Service urges taxpayers who haven’t yet done a “Paycheck Checkup” to take a few minutes to see if they are having the right amount of tax withholding following major changes in the tax law.

A summertime check on tax withholding is critical for millions of taxpayers who haven’t reviewed their tax situation. Recent reports note that many taxpayers could see their refund amounts change when they file their 2018 taxes in early 2019.

The Tax Cuts and Jobs Act, passed in December 2017, made significant changes, which will affect 2018 tax returns that people file in 2019. These changes make checking withholding amounts even more important. These tax law changes include:

  • Increased standard deduction
  • Eliminated personal exemptions
  • Increased Child Tax Credit
  • Limited or discontinued certain deductions
  • Changed the tax rates and brackets

Checking and adjusting withholding now can prevent an unexpected tax bill and penalties next year at tax time. It can also help taxpayers avoid a large refund if they’d prefer to have their money in their paychecks throughout the year.

You can use the free IRS Withholding Calculator to check your withholding now.

Special Alert: Taxpayers who should check their withholding include those who:

  • Are a two-income family.
  • Have two or more jobs at the same time or only work part of the year.
  • Claim credits like the Child Tax Credit.
  • Have dependents age 17 or older.
  • Itemized deductions in 2017.
  • Have high income or a complex tax return.
  • Had a large tax refund or tax bill for 2017.