Advisors are used to figuring out the most sophisticated and nuanced of solutions to custom-tailor each plan to fit the needs of each client. However, it’s sometimes the simpler, less technical questions that touch on the humane aspect of estate planning that need our attention. We asked Trusts & Estates’ esteemed board members what some of those most frequently asked questions are and their take on a concise, thorough response. Whether you’re a newly minted estate planning attorney or a seasoned professional, here’s some insight on the questions commonly plaguing clients.
The coronavirus checks will soon be in the mail, or rather headed directly to your bank account. That's the official word from the Treasury Department and Internal Revenue Service. The agencies announced on Monday, March 30, that the economic impact payments authorized by the Coronavirus Aid, Relief and Economic Security (CARES) Act will begin going to eligible taxpayers in the next three weeks. Here are the agencies' answers to some other COVID-19 stimulus payment questions.
The new law that's gotten a lot of attention for the pandemic related stimulus checks that should be going out soon also offers a break to seniors who must take required minimum distributions, or RMDs. RMDs are waived for 2020 under the CARES Act. That means you can leave your money in your tax-deferred account this year or at least not take as much out as Uncle Sam demands. That should help as your market-battered nest egg looks to rebound. Here is some more information regarding this change.
At the end of last week, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The $2.2 trillion rescue package comes in response to the economic fallout from the coronavirus pandemic. The measure contains a number of provisions to encourage greater charitable giving including:
All taxpayers should make sure they're doing everything they can to prevent a thief from stealing their identity. Tax-related ID theft occurs when someone uses a taxpayer's stolen personal information to file a tax return claiming a fraudulent refund. The thieves use personal information like a stolen Social Security number. The IRS and its partners are constantly working to combat these types of crimes, but they can't do it alone. Taxpayers play an important role when it comes to preventing identify theft. Here are some tips to help taxpayers protect themselves against identity theft. Taxpayers should:
You're working on your tax return and discover you owe Uncle Sam more than you expected. It happens. And in most cases, you're stuck with that larger Internal Revenue Service bill. After all, the 2019 tax year is long gone. It's too late to make those year-end moves that could have helped cut your tax bill. But wait! In a couple of instances, you still might be able to reduce last year's taxes with some tax saving moves that are allowed as late as the April 15 filing deadline.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was passed in December 2019 as part of a larger federal spending package, included a provision that warrants special attention from those who own high-value IRAs. Specifically, the "stretch" IRA provision — which permitted nonspouse beneficiaries who inherited IRAs to spread distributions over their lifetimes — has been substantially restricted. IRA owners may want to revisit their estate planning strategies to help prevent their heirs from getting hit with higher-than-expected tax bills.
Millions of us file taxes every year. And millions of us, even those who get refunds, dread it. Why? We worry that we'll make a mistake. That's a legitimate concern. But sometimes, we filers have to bear some of the blame. We make things worse by making easily avoidable mistakes when we fill out our 1040s. Here are 10 common errors you can dodge by taking a little care when you file your tax return.
There is no perfect retirement income solution. The change from defined benefit (pension) plans of previous decades to the defined contribution options that are common today has left many people wondering how to invest their retirement nest eggs so they won’t run out of money. The sheer number of financial instruments and strategies leave many people feeling like deer in the headlights. Researchers at Stanford University have come up with a strategy that works for most of the people, most of the time. Stanford University examined 292 retirement portfolio strategies for middle-income earners with less than $1 million saved. This is the best one they found.
Over the last few years, several tax myths have surfaced that often get repeated on television, the internet, and at cocktail parties. But, is there any truth to them at all? Here are a few tax myths you might have heard about.
When it comes to taxes, the goal every year is to pay less. While we're still working under the Tax Cuts and Jobs Act (TCJA) changes at the federal level, we still see some changes in 2020. Federal income taxes, however, aren't the only taxes that millions of us must deal with each year. Forty-three states impose some sort of tax on income. Many local jurisdictions collect their portions, too. Thirty-five states have major tax changes taking effect on January 1, 2020.
Tax basis can be important when deciding whether to make gifts now or transfer property at your death. This is because the tax basis of the person receiving the property depends on whether the transfer is by gift or at death. This, in turn, affects the amount of taxable gain subject to income tax when the person sells the property. What is tax basis?
Congress finally decorated its Christmas tree early this morning (December 17). The ornaments were myriad tax breaks. Or, in some cases, elimination of taxes. With Dec. 25 bearing down and special interest groups sending more requests to Capitol Hill than kiddos' letters to Santa, the House and Senate negotiators finally agreed on, among other things, what to do about those expired tax provisions popularly known as extenders. They OK'ed a handful of them and plan to tack them onto government fiscal year funding legislation that must become law by Friday, Dec. 20, to avert shutdown of federal offices.
(Ed. Note – written for financial advisors)
Deadlines are rapidly approaching. As 2019 comes to an end, so does the window of opportunity to take advantage of certain tax and financial planning strategies. To help advisors and their clients be best positioned come Tax Day 2020, CPA financial planners with the American Institute of CPAs (AICPA)—the world’s largest member association representing the CPA profession—offer the following 2019 year-end tips. These 16 tips can help your clients improve their financial situations, support the lives they want to live and ensure their loved ones are provided for.
October is here and I've got to say that although it's still early, the month so far is disappointing. Here in Central Texas, by now we're usually enjoying daytime temperatures in the 80s, with overnight lows dropping into the 60s. That typically means our windows are open 24/7 to get full enjoyment of autumn weather. Not in 2019. We're at least 10 degrees higher both days and nights. One thing, however, that is certain every October is the mid-month tax deadline. Oct. 15 is, of course, the day when procrastinators must finally send in their prior year's tax return. It's also the due date for some other important, though less wide-ranging, tax-related moves. Here's a look at four tax tasks to take care of on or before Oct. 15.
The millions of taxpayers who hold wage-paying jobs where income taxes are withheld from their checks obviously will benefit from the Internal Revenue Service new tax withholding estimator. But what if you don't have a job where there's withholding? That's the case for millions of individuals who are self-employed. The work freedom of being your own boss comes with some new tax responsibilities.
New tests can detect dementia years before any outward signs appear. Early brain changes due to Alzheimer’s disease may soon be detected with a simple blood draw in your doctor’s office, according to researchers. Doctors have been hoping for such a test for years — one that providers can administer in the office at a reasonable cost. They have been searching for an alternative to the $4,000 PET brain scan currently in use.
Workers who thought pensions would fund their retirements are getting an unwelcome surprise as Uncle Sam looks the other way. Having a pension used to be the retirement gold standard. A defined benefit plan meant workers could count on payments for as long as they lived, without ever worrying the money would run out. But all that’s changed, and the government says it’s OK.
It's November. You know what that means. Year-end tax move time. If you don't get tax task proactive now, all the other important non-tax stuff that demands your attention this time of year will take over and you'll miss out making some tax-smart tax actions. Here are 10 tax things to consider and, wherever applicable, complete ASAP. Then you can get back to your holiday planning.