Despite this headline, this affects everyone, not just the wealthy. If you inherit Mom or Dad’s IRA, you now have to completely liquidate within 10 years. Before you could stretch it out over a much long period based on your lifespan.
As a consumer you need to understand how your financial professional is compensated:
https://blogs.wsj.com/moneybeat/2013/09/20/decoding-fee-only-sometimes-it-isnt-what-you-think/
Great article explaining the top two credentials in personal finance. Having gone through both programs I’ll have to agree with everything they state, but in the end why not work with someone who is both, instead of choosing one or the other?
You would think that folks would learn that there is no free lunch and that no investment person can guarantee returns. However, folks still learn the hard way.
ps. No regulated investment professional can accept your investment money via Venmo!
A link on Yahoo regarding the upcoming vote:
The media has been all over the fact that many are not getting a refund this year and actually owe taxes this year. Actually from what I’m seeing, they are correct. However, it has nothing to do with the 2018 Tax Cuts.
Employers lowered the amount they were withholding from employee paychecks in 2018 and now it is coming back to haunt those taxpayers. Overall, what I’m seeing is that most are in a lower tax bracket (a few percent), but unfortunately did not withhold enough throughout 2018, so they owe. Especially those with higher incomes (limit on state/local tax deduction is also hurting).
Go ahead and adjust your W4 so that this doesn’t become a reoccurring problem next year: https://www.irs.gov/individuals/irs-withholding-calculator
Just posted a newsletter that gives examples and explains the new 199A deduction. Download the newsletter here: Tax Newsletter Feb 2019
Today BB&T and Suntrust announced a merger. I guess to survive and compete with the mega financial institutions they had to, but dang look at this graphic from 1996 to 2009 of how the last few standing have gobbled up everyone: (click on image and it will enlarge for viewing)
Prior to 2018, mortgage interest on $1M primary mortgage and Home Equity loan interest on a loan up to $100k were deductible on your Schedule A itemized deduction form of your tax return. With the new tax law that has changed and caused a bit of confusion:
For mortgages taken out in 2018, the total combined mortgage loan amounts (primary and home equity/second) where interest can be deducted has dropped to $750,000. The question is what about Home Equity Loan interest? The new tax law made it sound as if Home Equity loan interest would no longer be deductible, however per the IRS that is not the case. If a Home Equity loan was taken out to specifically make improvements to the property then the interest on the loan can still be deducted on your Schedule A. The caveat is that the loan has to be to improve the residence it is loaned against, no using it to pay off credit cards, vacations, etc…
For more info see the IRS’ statement on this: https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law
This question came up recently with a client that had both Non-deductible contributions in an IRA mixed with Pre-tax (deductible) contributions. When you take a withdrawal how much is taxable? It is called the Pro-Rata rule with the IRS and you have divide your after tax contributions by the entire retirement balance to figure out non taxable basis.
Kudos to Wells Fargo for putting out this great info sheet that explains the whole thing: https://www08.wellsfargomedia.com/assets/pdf/personal/investing/retirement/taxes-and-retirement/pro-rata-rule.pdf