Asset Planning, Inc Blog

Many times we are asked by our clients about ways they can give back through planned gifting. In our last quarterly newsletter, Carol explained how you can donate part or all of your mandatory IRA distributions (RMD) to a charity of your choice which also reduces your taxable income for the year. Another way of doing this is by setting up a charitable annuity. The way it works is the donor gives a gift to the charity (amounts vary), the donor receives fixed payments for life and the donor is entitled to a federal income tax deduction the year the gift is made. I have included a link to one that is offered through the ASPCA to use as an example but there are many more out there to suit everyone’s unique philanthropic wishes.

https://www.aspca.org/ways-to-give/planned-giving

Financial Planning Magazine reached out to Sandy to get her reaction to President Trump's proposed tax cuts for businesses and the elimination of certain deductions. This is what she had to say. You can read the full article here: http://www.financial-planning.com/list/rias-support-trump-tax-cuts-for-businesses

We wanted to send out a reminder that it's not too late to contribute to your IRA accounts for 2016 as long as you are still working and have not yet met your contribution limit. The IRS deadline for contributions is April 18, 2017. Please give us a call if you would like to make a contribution or have any questions.

The April 18^th deadline to file your tax return is right around the corner. In your rush to meet the deadline we would like to remind you that it’s not too late to contribute to your IRA to receive the tax benefit.  The current funding limit is $5,500 for those under 50 and $6,500 for people 50 and over. Even if you participate in a plan at work you may still contribute, you will not receive the tax deduction but the earnings will grow tax free until you are required to take a distribution – over age 70 1/2. . If you have been thinking about opening an IRA to supplement your retirement there is no better time than the present to get one started. Please contact your advisor to determine which type of IRA would best suit your financial needs.

The Kiplinger Letter published a great summary of the changes to Retirement Contribution Limits and it is below:

“Several dollar ceilings on retirement plans are heading up this year:

• The pay in limitation for defined contribution plans increases to $52,000.  That’s a $1,000 hike for Keogh plans, profit sharing plans, and similar arrangements.
• Retirement plan contributions can be based on up to $260,000 of salary. 
• And the benefit limit for pension plans is rising to $210,000 in 2014.
• The income ceilings on Roth IRA pay ins go up.  Contributions phase out at AGIs of $181,000 to $191,000 for couples and $114,000 to $129,000 for singles. 
• The deduction phase outs for pay ins to regular IRAs start at higher levels, from AGIs of $96,000 to $116,000 for couples and $60,000 to $70,000 for singles.  If only one spouse is covered by a plan, the phase out zone for deducting a contribution for the uncovered spouse begins at $181,000 of AGI and finishes at $191,000.
• And the partial credit for retirement plan pay ins phases out at higher levels.  For marrieds…at over $60,000.  Household heads…$45,000.  Singles…$30,000.

Several key items won’t change.  The 401(k) pay in limit remains $17,500.  Folks born before 1965 can put in an extra $5,500.  Ditto for 403(b) and 457 plans.  The ceiling on SIMPLEs stays $12,000…$14,500 for folks age 50 or older this year.  Pay in caps for IRAs and Roths remain $5,500 plus $1,000 for anyone 50 and up this year.”

The Kiplinger Letter January 3, 2014

It is never to early to begin planning for next year's tax return. Planning ahead can save you time and money in 2014. Here are six simple steps to take to make your next tax return easier.

1. Adjust your withholding
Now is a good time to review your withholdings to make the taxes withheld from your pay closer to the taxes you will owe for this year. You can use the IRS Withholding Calculator at IRS.gov to complete a new Form W-4.

2.Store your return in a safe place.
Doing so can facilitate locating it in case you need to refer to your return. For example, you may need a copy of your return when applying for a home loan or financial aid.

3. Organize your records
These record include your receipts from big purchases, mileage logs, and other deductable expense.

4. Hire a tax professional
If you already have a tax professional  consult with them now to tart your tax planning for next year.

5.Consider itemizing deductions
If your itemized deductions typically fall just below your standard deduction you can bundle your deductions. If you usually claim a standard deduction, you may be able to reduce your taxes.

6.Keep up with changes
its always good to keep  up with changes in the law especially taxes. For helpful tips, and IRS announcements, visit the IRS website, www.IRS.gov

Normally, heirs get to take distributions from inherited IRAs over their lifetimes. But if just one beneficiary of the account isn't an individual person, the IRA has to be distributed within 5 years for all beneficiaries. The problem can occur when a decedent names a charity or college as one of the beneficiaries. Tax Planning Tip: The IRS allows the individual beneficiaries to take distributions over their lifetime (enjoying tax free earnings growth) as long as the charity, school, etc. is paid off by September 30 of the year following the death of the IRA owner.