It’s that time again… like a bad penny, April 15 keeps turning up, year after year. But while for many of us investors the tax filing deadline is enough to induce a headache, it doesn’t have to be that way. Especially since there is plenty of tax software to make this annual chore a whole lot easier.
Paying taxes is still something many investors overlook when making plans for their retirement portfolios. Without the right tax planning, your real returns could take a bigger hit than you originally planned.
In 1969, it came to the attention of the federal government and the public that there were 155 tax return filers with incomes of $200,000 — equivalent to an annual income of more than $1.3 million in today’s dollars — who paid no federal income tax. While their $0 tax liability was legal within the tax code at the time — they were using federally allowed income deductions and tax breaks appropriately — the government was embarrassed and moved quickly to legislate a solution. From this the AMT, or Alternative Minimum Tax, was created, with the aim of making the tax system fairer.
Have you thought about what you’re going to do with your tax refund? The average tax refund in 2016 is in the neighborhood of $3,053, $5 more than last year. That’s not exactly a life-changing amount, but it’s a decent chunk of change that can jumpstart an investment or savings goal.
It’s tax season again, and for many people that means figuring out what to do with a large refund check. Last year, the average refund was about $3,000, a decent chunk of change. A relative “windfall” like this can be the perfect time to start investing.
There are different types of financial and investment documents we rely on, in spite of the fact so much of this information is now available online. Most companies limit how far back you can go with previous-year documents, so the only way you can make sure you have the documents you will need when you need them is to actually have a physical copy in your possession.
As is the case every year, the New Year brings changes for retirement plan contributions and limits, though 2017 will have more muted changes than most years. Retirement plans, like employer-sponsored plans and self-employed plans, will be affected. With inflation being on the low end of the scale, the changes in contribution limits generally remain unchanged for 2017, while income limits will increase modestly in some cases.
It’s almost that time of year — if you collect any kind of income at all, you need to be ready to file your income tax return. This puts a special burden on investors, which is why we’ve provided a simple checklist for organizing your investments for income tax preparation.
As an investor, tax planning is of the utmost importance. Even your investments that come with favorable rates can be used in your tax planning. One way to make the most of your investment situation is to engage in tax loss harvesting. What is tax loss harvesting and how can you use it to your benefit?
2017 marks the fourth year citizens will be penalized for not having health insurance. Along with this comes a tax credit — the Premium Tax Credit — for purchasing qualifying health insurance through the Marketplace. How does this affect your investments? It’s important to consider tax-efficient investing whenever possible. Here’s what I mean.
One of greatest advantages to saving for retirement is the tax benefits you get when investing in an IRA or other qualified retirement account. Most people know there are tax benefits to opening an IRA account, but few understand how many benefits there are, and how powerful they can be in the cause of saving money for retirement. Did you know there are at least six tax benefits to opening an IRA account?