https://www.billbrookscpa.com/wp-content/uploads/2014/12/images-31.jpg 159 318 admin https://billbrookscpa.com/wp-content/uploads/2018/08/BB-Logo-300x77.png admin2014-12-18 04:53:462017-12-07 00:00:27Tax Tips to Implement Before Year's End
Tax Tips to Implement Before Year’s End
Undoubtedly, you are interested in your retirement so here are some ideas for you to consider implementing before year-end.
- Albert Einstein called compound interest the “eighth wonder of the world”, adding: “He who understands it earns it; he who doesn’t pays it.” Start early as you can and its never too late.
- Get the 401k match- best is 50 cents of every dollar up to 6% of pay.
- Set up automatic witholding so you never get a chance to spend it. Or direct deposit into an IRA , SEP IRA or taxable account
- Save on taxes whether you’re in the 15%, 25%, 28%, 33%, 35% or 39.6% – pay taxes when you take distribution when you are in a lower tax bracket.
- Consider a ROTH IRA. You can contribute if you have earned income up to $5,500 ($6,500 for catch-up at 50 years). Also there is a phaseout if you are single and make $114,000 to $129,000, married filing jointly $181,000 to $191,000 and married filing separately over $10,000
- Savers credit of 10%, 20% or 50% if you have adjusted gross income ( under $30,000 for singles, $60,000 for couples and $45,000 for heads of household). Credit is a % of IRA, 401k contributions up to $2,000 for singles and $4,000 for couples.
- Minimize fees by choosing the least expensive mutual funds that suit your investment needs. Also consider consolidating IRAs’ into one rollover IRA.
- Avoid early withdrawals which will cost you a 10% penalty if you take distribution before you’re 591/2. There are some penalty abatement exceptions. Instead save so that you have an emergency fund for unexpected expenses.
- Consider rolling over your IRA to a ROTH IRA especially if you find yourself with lower income so that you can take advantage of lower taxes.(15% up to $36,900 for singles and married filing separate, 15% up to $73,800 for couples, 15% up to $49,400 for heads of household)
Contact us at (303) 447-1626 to ensure that you are meeting all the recordkeeping requirements in these areas.
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