No matter which phase of life you’re in, you might be looking for ways to trim your tax bill. Here are some strategies to consider! Nothing is certain but death and taxes. Perhaps a phrase most known for being spoken by Benjamin Franklin, the old adage seems to have held up over the course of centuries as a constant, dogmatic idea that sticks with investors and consumers. Nevertheless, each year around tax time, most of us wonder how we can pay less in income taxes, and the answer to that question is always, “It depends.” Each person’s situation is completely
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Archives for Tax Planning
6 Facts About Taxes
Individual income tax returns for 2021 will be due April 18th, 2022. In preparation as we head into the tax season, here are some facts to consider. Where your tax dollars go. In 2021, the federal government spent $6.82 trillion, which equals 30% of the nation’s gross domestic product. Three significant areas of spending make up the majority of the budget. Medicare accounted for $696.5 billion, or 10%. Defense spending made up $754.8 billion, or 11% of the budget, was paid for defense and security-related international activities. Seventeen percent of the budget, or $1.1 trillion, was paid for Social
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Your 2022 Financial To-Do List
Things you can do for your financial future as the year unfolds. What financial, business, or life priorities do you need to address for the coming year? Now is an excellent time to think about the investing, saving, or budgeting methods you could employ toward specific objectives, from building your retirement fund to managing your taxes. You have plenty of choices. Here are a few ideas to consider: Can you contribute more to your retirement plans this year? In 2022, the contribution limit for your own Roth or traditional individual retirement account (IRA) is $6,000 ($7,000 for those age
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RMDs Are Back for 2021
RMDs, or Required Minimum Distributions, are withdrawals that are required by the IRS each year out of your traditional retirement accounts like 401(k)s and IRAs starting at age 72. The money that you have to take out annually by December 31st at midnight is taxed based on your income tax rate for that tax year. Read this article about RMDs, and call us if you have any questions or don’t understand it: https://www.cnbc.com/2021/03/01/required-minimum-distributions-on-retirement-plans-are-back.html We are happy to discuss ideas with you and/or your tax professional. You can reach Benning Financial Services in Bismarck, North Dakota toll-free at (877) 412-9425.
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What is a Roth Conversion?
To understand what a Roth conversion is, you must first understand some of the basics about the different types of retirement accounts, called “qualified accounts.” Pensions Also called defined-benefit plans, pensions are paid for by employers. They have largely gone away for Americans in the private sector starting with the passage of three laws during the Reagan administration, the Tax Equity and Fiscal Responsibility Act passed in 1982, The Retirement Equity Act of 1984, and The Tax Reform Act and Single Employer Pension Plan enacted in 1986. The lack of pensions is one reason why it’s important for people to
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Clearing Up Confusion About RMDs
Last month, we posted information about how the SECURE Act has increased the age for required minimum distributions (RMDs) from 70-1/2 to 72 starting this year, 2020. If you turned age 70-1/2 in 2019, your RMDs were required for the 2019 tax year, and WILL BE required for 2020, 2021 and every year from now on. For everyone turning 70-1/2 in 2020, your RMDs will not be required until the year you turn 72, even if you have received notification from your custodian to the contrary. Because the law was passed and became effective within two weeks of passage, automated
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5 Things You Need to Know About the SECURE Act
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE) became effective Jan. 1, 2020. Here are the top five things you should know. 72 is the new 70½ The SECURE Act raises the age at which retirees must begin taking Required Minimum Distributions from the awkward age of 70-1/2 to an even age 72, allowing for a couple more years of growth before RMDs kick in. NOTE: Anyone who reached age 70-1/2 in 2019 or before is subject to the old rules. You can keep making contributions to traditional IRAs The act repeals the age limitation for making
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