Tax Warrior Chronicles

The SECURE Act - Significant Changes for IRAs and 401(k)s – Part II

Posted on Fri, Jan 03, 2020

By: Beth Gaasbeck, CPA, MBA and Robert N. Polans, CPA, MT, PFS


Welcome to Part II of our two-part blog discussing the SECURE Act and its impact on retirement and estate planning.  The Act was signed by the President on December 20, 2019, and is effective as of January 1, 2020. Today’s focus is on the not-so-good parts of the Act.


In Part I, we summarized notable provisions of the Act, focusing on the increase in the Required Minimum Distribution (RMD) age and the removal of age restrictions for making IRA contributions (the good news).  Today we’ll discuss the changes to the RMD rules for inherited retirement plans and the elimination of the “Stretch IRA” (the bad news). Let’s start by

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Your Kids in the Family Business Post-Trump Tax Reform

Posted on Mon, Aug 12, 2019

By: Melissa Boyce, CPA


The Tax Cuts and Jobs Act of 2017 (TCJA) changed many areas of the tax code, including when family business hires their child(ren). While there was a similar pre-TCJA benefit to hiring one’s child(ren), the new law increased several tax savings and warrants another look at hiring children into the family business.


Income Shifting

The largest benefit of hiring a child into a family-owned business is the ability to convert the parents’ high-taxed income into tax-free or low-taxed income. There are rules that must be followed; specifically, the children’s work must be legitimate, and the amount the enterprise pays them must be reasonable for the wages to be

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Advantages of Naming Spouse as Sole Beneficiary of IRAs

Posted on Tue, Nov 04, 2014

All named beneficiaries of a decedent's IRA can receive a distribution from the decedent's IRAs. However, a surviving spouse who is the designated sole beneficiary of the decedent's IRA has two unique options that are not available to other beneficiaries. The surviving spouse may: (1) roll over the decedent's IRA into an IRA established in the spouse's own name ("spousal rollover"), or (2) elect to treat the decedent's IRA as the surviving spouse's own IRA ("election").  The surviving spouse is treated as if she had funded the IRA with either of these options.


Advantages of the Spousal Options

There are three major advantages to making the spousal rollover or election:


(1)   Required

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Is It Time For an Increase to Your Retirement Plan Contributions in 2014?

Posted on Mon, Jan 06, 2014

In 2013, the stock market roared back with a vengeance and record gains, with the Dow Jones Industrial Average shattering the 16,000 point mark. The economy is looking better and those who braved the long-slumping 401(k) market with steady contributions were rewarded with gains as well.  


So, with the new year upon us and these positive market trends in mind, is it time to start thinking about increasing 2014 retirement plan contributions?  Contributing the maximum you’re allowed to an employer-sponsored defined contribution plan is likely a smart move, especially for those who find themselves in new, higher-tax situations like the 39.6% tax bracket.


Some basics to note about

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Social Security Wage Base Expected to Rise for 2014

Posted on Thu, Jun 06, 2013


Social Security has become the third rail of politics.  If a candidate has a plan to fix it, it is scrutinized.  If a candidate does not have a plan to fix it, they are vilified. As the population rises and people are living longer, the pot is getting smaller and smaller.


As a result, in its attempt to keep money flowing through and funding the program, the Social Security Administration's Office of the Chief Actuary (OCA) has projected that the Social Security wage base will increase from $113,700 for 2013 to $115,500 for 2014.


We all know about this tax but maybe the correct names and a review of rates will set the stage.  The Federal Insurance Contributions Act (FICA) imposes two

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IRS Announces 2013 Pension Plan Limitations

Posted on Thu, Oct 18, 2012

The IRS released IR-2012-77 on October 18, 2012, which spells out cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2013 tax year.  Many of the pension plan limitations will change for 2013 due to the the cost-of-living index increase meeting statutory thresholds triggering their adjustment.  Some other limitations will remain unchanged because the statutory thresholds where not met.


Highlights of these changes for 2013 include:


  • The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500.
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Retirement - What's YOUR Number?

Posted on Wed, Oct 10, 2012


Consider these recent headlines:


In 2010, life expectancy for people aged 65 was 84 years old.


There is a greater than 50 percent chance that at least one partner from a couple in their 60s will live to the age of 95.


Essentially, we are living a lot longer and the retirement age, for the most part, has not increased.  Therefore, many of us could experience 20, 30 or more years in retirement. So the question becomes, how do we plan for this probability?


There has been a lot of attention on trying to figure out what is the lowest amount of savings needed to secure a desired retirement phase of one’s life.  This amount has been labeled “The Number” or "The Magic Number." 

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2013 D&S Tax & Financial Planning Guide Now Available!

Posted on Mon, Oct 01, 2012

Every year, the Tax Warriors make their Tax & Financial Planning Guide available on-line or in paper copy for our clients and friends.  This year our Tax Warrior Chronicles blog readers get the benefit as well!


The 2012-2013 D&S Tax & Financial Planning Guide represents an attempt to guide you through the complicated issues relating to tax planning.  As you read through this document, please remember that every income tax problem listed is coupled with a tax planning suggestion that will allow you and your family to keep more of your hard earned monies.


As you browse through the Guide, keep in mind that your thinking about tax planning will need to be different than past years.  For

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Retirement Planning - How to Access Your Social Security Statement

Posted on Thu, May 03, 2012

Last year Social Security suspended the mailing of the annual benefit estimate Statements due to Federal budget considerations. Recently they resumed sending the Statement, but only to people who are age 60 and older and who are not yet on benefits; people younger than 60 will not have a Statement mailed to them, but can now access the information on-line.


This week Social Security set up an on-line service that allows anyone age 18 and older to register and create a personal My Social Security account. Your My Social Security account can  provide:

  • Estimates of the retirement and disability benefits you may receive;
  • Estimates of benefits your family may get when you receive Social
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