Death and Taxes
Updated: Mar 1
Benjamin Franklin said “Nothing is certain except death and taxes.”
Originally a line in a letter back in
1789 about the US Constitution
Benjamin Franklin wrote:
"Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes."
IRA and Roth IRA | There is still time! If you have not yet filed your 2022 tax return you can still fund an Individual Retirement Account (IRA) for 2022. By doing this you can reduce your taxable income by the amount of the contribution for last year. The total contribution limits to your traditional IRAs and Roth IRAs can't be more than: $6,000 or $7,000 if you're age 50 or older.
Another consideration even if you've already fully funded your 2022 retirement plan contribution. Take advantage of the 2023 IRA & Roth IRA snd 401k Increased amounts of contributions allowed.
Different types of IRAs:
Traditional IRA. Contributions typically are tax-deductible. You pay no taxes on IRA earnings until retirement, when withdrawals are taxed as income.
Roth IRA. Contributions are made with after-tax funds and are not tax-deductible, but earnings and withdrawals are tax-free.
SEP IRA. Allows an employer, typically a small business or self-employed individual, to make retirement plan contributions into a traditional IRA established in the employee's name.
SIMPLE IRA. Is available to small businesses that do not have any other retirement savings plan. The SIMPLE – which stands for Savings Incentive Match Plan for Employees – IRA allows employer and employee contributions, similar to a 401(k) plan, but with simpler, less costly administration, and lower contribution limits.
The IRS also issued technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023.
Internal Revenue Service announced that the amount individuals can contribute to their their 401(k) plans in 2023 has increased to $22,500, up from $20,500 for 2022.
Required Minimum Distributions (RMDs):
Required minimum distributions (RMDs) are withdrawals you have to make from most retirement plans (excluding Roth IRAs) when you reach the age of 72 (or 70.5 if you were born before July 1, 1949). The amount you must withdraw depends on the balance in your account and your life expectancy as defined by the IRS. If you have more than one retirement account, you can take a distribution from each account or you can total your RMD amounts and take the distribution from one or more of the accounts. RMDs for a given year must be taken by December 31 of that year, though you get more time the first year you are required to take an RMD.
The income-related monthly adjustment amount (IRMAA) sliding scale is a set of statutory percentage-based tables used to adjust Medicare Part B and Part D prescription drug coverage premiums. The higher the beneficiary's range of modified adjusted gross income (MAGI), the higher the IRMAA. For a detailed sliding scale tables and information here is the link to Social Security: https://secure.ssa.gov/poms.nsf/lnx/0601101020
If you own or you are considering opening a small business Invest in Yourself! Since the arrival of the pandemic there's been uptick in new business formation. Instead of returning to their previous job many people have taken the path to strike out on their own. Here is one example of a popular strategy to help fund a small business.
Entrepreneurs Receive Funding For Business
Begin your business journey with ROBS financing.
A rollover for business startups (ROBS) allows you to invest funds from an existing 401(k) or individual retirement account (IRA) into your business without paying early withdrawal penalties or taxes.
As a Registered Investment Advisor we can help design a strategy to help you reach your goals smarter and faster. We'll help you establish a strategy that allows you to combine a variety of retirement plans into one.
Take the next step, schedule a free consultation and learn how we can help you. Asset and Cash Management Solutions