Nov 9, 2015 Year End Tax Planning
With the new year just around the corner, now is a great time to think about end of year tax planning. If any of the following apply to you, it might be a good idea to call and schedule a meeting with your advisor before the end of the year.
Thinking of a Roth Conversion?
If you are planning on converting some of your Traditional IRA funds into a ROTH IRA, you have to have the conversion done before the end of the calendar year. You would be voluntarily paying income tax on the amount that you convert, but future growth could be withdrawn income tax free. Your advisor can explain the details.
Are you in the 15% or 10% tax bracket this year?
If so, you might want to consider harvesting some gains. Under current tax law, the long-term capital gains rate for taxpayers in the 15 or 10% tax brackets is 0%! For a married couple filing jointly, a taxable income (after all exemptions and deductions) of $74,900 fills up the 15% bracket. For a single filer, $37,450 fills up the 15% bracket.
Have you taken your Required Minimum Distribution?
If you are over 70 1/2 and haven’t taken funds out of your IRA this year, watch for the paperwork to satisfy your Required Minimum Distribution. You could be subject to a 50% penalty if you fail to withdrawal your full amount by years’ end, so if you have any questions please contact us.
Please note: The information being provided is strictly as a courtesy. The opinions expressed in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Leonard Rickey Investment Advisors, PLLC (“LRIA”), is an SEC registered investment adviser located in the State of Washington. Registration does not imply a certain level of skill or training. For information pertaining to the registration status of LRIA, please contact LRIA or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).
This is provided for general information only and contains information that is not suitable for everyone. As such, nothing herein should be construed as the provision of specific investment advice or recommendations for any individual. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. There is no guarantee that the views and opinions expressed herein will come to pass. This newsletter contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information prepared by any unaffiliated third party incorporated herein and take no responsibility therefore.
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Market Update: February 2023