In 2020, many clients are provided with a “once-in-a-lifetime” opportunity to avoid taking their IRA distributions. This also presents an opportunity to create income in lower (never to be seen again) tax rates. However, navigating your taxable ordinary income in a way that avoids creating income at unexpectedly high tax rates is riddled with perils. Be sure your advisor can calculate your 2020 tax, and build multiple scenarios to take advantage of waived RMDs without being hit by the Social Security Tax Torpedo or other such perils.

You don’t have to be as wealthy as Bill & Melinda Gates in order to set up your own private charitable foundation. There is an alternative to a private foundation for those of us not as wealthy as the Gates called a Donor Advised Fund (DAF). What is a Donor Advised Fund (DAF)? Simply put, a DAF is your own private charity, funded in a lump sum or over time with cash or securities. You can then invest the dollars in your DAF and allow it to grow, or you can direct your DAF to donate some or all of the funds to the charities of your choosing whenever you decide.

The Health Savings Account (HSA) is the ultimate savings machine as it is the only type of account with triple tax benefits.

If you are over age 70.5, taking the standard deduction, and would like to make a gift to charity, consider taking advantage of the Qualified Charitable Distribution.

In my last blog post, I wrote about the use of Tax Bracket Smoothing as a technique to build wealth. In the video below, I expand on the concepts presented in the newsletter, and provide some demonstrations of how the strategy works, and how to confirm the value of such strategies.

What if I told you that you could build wealth by paying taxes—and paying them now instead of later? Most clients don’t want to pay taxes at all, let alone sooner rather than later. In fact it is common wisdom to defer income taxes as long as possible. How do you defer income and therefore taxes? The table to the right shows some typical income acceleration / deferral strategies.

A client recently contacted me regarding a very frightening call she received from someone claiming to be from the IRS. They told her that she was facing jail time for fraud and tax evasion. Their tactics were very aggressive and intimidating and they insisted on her sending money immediately to avoid a variety of harsh consequences.

In the world of investing, the quest for "alpha" is the primary goal for investment managers. Delivering investment alpha means obtaining investment returns that are better than their benchmarks.

In my experience, clients are completely honest in reporting their income. Of course, this is easy when most income is reportable directly to the IRS via w-2's and 1099's! However, there is income some taxpayers think is non-reportable.

Every year you are asked by your tax preparer (or your software) if you want to donate $3 of your federal tax to the Presidential Election Campaign Fund. Do you know where this $3 comes from or where it goes?

Two Great (Free) Apps for Tax Time Here are two free smartphone apps designed to help you capture, and audit-proof your tax deductions.

If you are considering moving to another state, you should take a look at this great interactive map that lays out the differences in taxes state by state.