Articles
United States Tax History
United States tax law is a constantly changing landscape. The latest major piece of tax legislation is the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, by Donald Trump. The 2017 law kept the 10% personal income tax rate and lowered the others...
How Can I Upgrade My Insurance — Tax-Free?
Responding to the changing needs of consumers, the life insurance industry has developed some alternatives that go much further in satisfying a variety of financial needs and objectives than some of the more traditional types of insurance and annuities. Advancements...
How Can I Keep More of My Mutual Fund Profits?
Provisions in the tax code allow you to pay lower capital gains taxes on the sale of assets held more than one year. Short-term gains — those resulting from the sale of assets held for one year or less — are taxed as ordinary income at your highest marginal income tax...
Is There Such a Thing as a Tax-Free Investment?
The simple answer to this question is “yes.” There are two main types: (1) municipal bonds and municipal bond mutual funds and (2) tax-free money market funds. Municipal bonds are issued by state and local governments in order to finance capital expenditures;...
What Is the Most Tax-Efficient Way to Take a Distribution From a Retirement Plan?
If you receive a distribution from a qualified retirement plan such as a 401(k), you need to consider whether to pay taxes now or to roll over the account to another tax-deferred plan. A correctly implemented rollover avoids current taxes and allows the funds to...
What Tax-Advantaged Alternatives Do I Have?
A strong savings program is essential for any sound financial strategy. We take Benjamin Franklin’s saying to heart, “A penny saved is a penny earned,” and we save our spare cash in savings accounts and certificates of deposit. Investors who’ve accumulated an adequate...
What Tax Deductions Are Still Available to Me?
Tax reform measures are enacted frequently by Congress, which makes it hard for U.S. taxpayers to know which deductions are currently available to help lower their tax liability. Taxpayers may be able to take deductions for student-loan interest, out-of-pocket...
How Can I Benefit from Tax-Advantaged Investments?
For many people, tax-advantaged investing is an excellent way to reduce their income tax liability. And while many of the traditional tax-advantaged strategies have been eliminated, there are still alternatives left that can help you reduce your taxes. Some are...
What Is Tax Deferral?
“Tax deferral” is a method of postponing the payment of income tax on currently earned investment income until the investor withdraws funds from the account. Tax deferral is encouraged by the government to stimulate long-term saving and investment, especially for...
What Happens If I Withdraw Money from My Tax-Deferred Investments Before Age 59½?
Withdrawing taxable funds from a tax-deferred retirement account before age 59½ generally triggers a 10% federal income tax penalty, on top of any federal income taxes due. (Distributions from Section 457(b) plans are generally not subject to an early distribution...
When Must Taxes Be Paid on IRA and Employer-Sponsored Retirement Funds?
Traditional IRAs and most employer-sponsored retirement plans are tax-deferred accounts, which means they are typically funded with pre-tax or tax-deductible dollars. As a result, taxes are not payable until funds are withdrawn, generally in retirement. Withdrawals...
What Are the Tax Benefits of Charitable Trusts?
Americans give freely to support the causes they value, from churches, education, and the arts to medical research. Fortunately, current tax laws encourage and even reward philanthropy. Beyond the basic tax deductions for charitable giving, setting up one or both of...