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Key Points
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States That Don't Tax Income
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming
States That Don't Tax Retirement Distributions
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Another way to reduce RMDs is by buying a deferred income annuity. You can invest up to 25% of your IRA or 401(k) account (or $135,000, whichever is less) in a type of deferred income annuity known as a qualified longevity annuity contract (QLAC). When you reach a specified age, which can be as late as 85, the insurance company turns your deposit into payments that are guaranteed to last the rest of your life
The portion of savings used for the annuity is excluded from the calculation to determine your RMDs. For example, if you have $500,000 in an IRA and transfer $100,000 into a QLAC, your RMD is based only on the remaining $400,000. This doesn’t eliminate your tax bill—it just defers it. The taxable portion of the money you invested will be taxed when you start receiving income from the annuity.
QLACs offer other advantages to retirees who want guaranteed income later in life. Because you’re deferring the income stream, payouts are much higher for deferred income annuities than they are for immediate annuities, which start payouts right away. For example, a 65-year-old man who invests $100,000 in an immediate annuity will receive a payout of $493 a month, according to www.immediateannuities.com. That same amount invested in a deferred-income annuity that begins payments at age 80 would pay $1,663 a month.
define options for accumulation period, investment guaranteed minimum returns, principal return to beneficiaries etc
Medicare Premium Fees for Part B for 2024
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there is a way to increase the cost basis before a sale.
taking advantage of Section 1014 of the Internal Revenue Code, also known as a step-up in basis.
If you're a wealthy young American and you expect to make a substantial profit on the sale of assets like stocks or real estate, here's how gifting those assets to your parents could help you save a fortune.
So, if you gave stock worth $36,000 to your mom and dad today, you could transfer it tax-free by giving them each $18,000. Say the stock went up in value and was worth $336,000 by the time your second parent died in 20 years, the "cost basis" would reset to $336,000. If you sold the stock for $340,000 at that time, you'd only have to pay capital gains taxes on $4,000. Estate taxes would only be a concern if their estate crosses the threshold.
Potential Challenges
2024 Election Tax Impacts Reviewed
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rump has suggested he might eliminate all taxes on Social Security benefits. Currently up to 85% of benefits is taxed for a single person with combined income above $34,000 or a couple with combined income of $44,000
changing the tax-deferral status for retirement plans (also referred to as the "Rothification" of 401(k) contributions) << ok IF keeping Roth
Harris tax plans more bad than good - trying to spend more but not lower deficits
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a minimum 25% tax on total income, including unrealized capital gains
taxing qualified dividends and long-term capital gains at ordinary income rates << hits those trying to build wealth for retirement through unions, 401ks
increased the CTC to $3,600 per child ( there is a point where offering more tax breaks for more children does not make sense for the country )
estate tax exemptions will be cut in half
Harris may advocate for Democratic proposals to either limit or eliminate back-door and mega-back-door Roth IRA conversions << attacks middle class trying to build wealth for retirement
Add Social Security Tax on incomes over $400K — an opportunity defined negatively by Harris << no benefits value but taxing wrong income level
Harris has supported the Biden administration's proposal to subject earnings of more than $400,000 to Social Security taxes as a way to help shore up the Social Security trust fund.
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Biden 2025 budget proposal calls for increasing the net investment income tax (NIIT) to 5% from 3.8% for people with earned income of $400,000
Harris has proposed increasing the corporate tax rate to 28% from 21%. << kills the economy if more than 23%
Candidate Solutions
Tax Planning Tips
401K Record Keeping Systems Summary
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