Financial Planning

Roth accounts have been around since the late 1990’s as the brainchild of Senators Bob Packwood and William Roth, Jr. While most people understand the basic tenets of a Roth account, the rules, like anything concocted in Washington DC, are much more complicated than first blush.
The Pease limitation is named after Congressman Donald Pease who originally introduced the legislation in 1991, and it was added to the Internal Revenue Code under section 68. This provision limits the amount of itemized deductions allowed by reducing certain
In tax planning the most common rate is the table rate and not necessarily the actual marginal rate. Any additional income you can earn or receive—be in wages, interest, dividends, or capital gains—is going to be taxed at the marginal rate. Likewise, any deductions you take for mortgage interest
The passage of 1983 Amendments to the Social Security Act altered the tax-free nature of Social Security benefits. Beginning in 1984 Social Security benefits, above a certain threshold, are subject to federal income taxes. In an effort to make things as difficult as possible, 50% of the benefits received could be subject to taxation based on a
In our previous article Social Security Spousal Benefits, we discussed what benefits are allowed for a spouse of a retired worker. Along the same lines, if you were married and your spouse predeceases you, the benefit you receive from Social Security may change. Unfortunately
At the beginning of 2008, I wrote this piece and was surprised at the positive responses that I received from clients. As usual, I have added a few new items for 2015 but have kept the fundamental framework the same because the basics really never change. So here we go again for our 8th straight year!
About one year ago I wrote “The only thing permanent in Congress is increased complexity and taxes. The taxes are part and parcel to much of the complexity in government. Over the last three years we have had two major tax law changes with
Earlier this year, the IRS issued guidance concerning how the once a year limit applies to rollovers between IRAs; this reflected a decision by the U.S. Tax Court in the January 2014, Bobrow vs. the IRS
As most people are aware, Social Security retirement benefits make up a significant amount of retirement income. Current projections are that 90% of individuals 65 and older receive Social Security benefits that make up 38% of their
The year is 1990 and you have been an investor in Fidelity’s Magellan mutual fund off and on for 13 years. Looking at the mutual fund performance over that time is astonishing; the fund produced 29% average annual return! But to your dismay, you actually lost money over that time!

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