The Tax Cuts and Jobs Act roughly doubled the standard deduction ($12,200 for single filers and $24,400 for married taxpayers filing jointly in 2019) and indexed it for inflation through 2025. As a result, far fewer taxpayers will itemize deductions on their tax returns, and some people may be disappointed that they no longer benefit from writing off their donations.Continue reading “Qualified Charitable Distributions: Using Your IRA to Give from the Heart”
Many investors are aware of the impact that inflation can have on our ability to purchase goods and services in the future. Assuming a modest rate of 2% inflation, a car that costs $30,000 today will sell for over $45,000 by 2040. To help mitigate these rising costs, the IRS periodically increases the limits on contributions to tax-advantaged retirement accounts which can be accessed penalty-free after age 59½ and in some cases even earlier than that. To account for inflating wages, the IRS also raises the levels of income at which various tax benefits are available, otherwise known as phase-outs. The first table outlines the new 2019 limits for some of the more popular retirement contributions along with a brief description of each. The second table shows the 2019 phase-out ranges for deducting Traditional IRA contributions and saving inside of a Roth IRA. The Traditional IRA phase-outs only apply if the individual participates in a retirement plan at work.
Tax season is here and the deadline is quickly approaching. Scores of Americans are gathering their documents in preparation and accountants are working overtime to make sure that everything is in order for their filings. It is during this preparation that investors often find out that their IRAs have contribution limits and exceeding those limits can be a costly error.
Donating to charity directly from your IRA can have multiple benefits if you are over the age of 70½ and required to make annual withdrawals, known as required minimum distributions (RMDs). These RMDs may end up forcing you to withdraw more than you wish, forcing you to liquidate and possibly increasing your tax burden. Continue reading “Making Charitable Donations Directly From Your IRA”