Navigating the SECURE 2.0 Act: Repurposing 529 Funds for Retirement Savings
The SECURE 2.0 Act brings forth an intriguing opportunity for individuals with surplus funds in their 529 college savings accounts by allowing for a tax-free rollover of unused assets into the beneficiary’s Roth IRA starting in 2024. While this provision offers a new dimension to retirement savings planning, it’s essential to approach it with careful…
Offset Nursing Home Costs with Possible Tax Breaks
If you have a parent entering a nursing home, taxes are probably the last thing on your mind. But you should know that several tax breaks may be available to help offset some of the costs. Medical expense deductions The costs of qualified long-term care (LTC), such as nursing home care, may be deductible as…
Is it a repair or an improvement?
How to nail down current deductions If your business completes minor repairs by December 31, you can deduct those costs on your 2023 tax return. But different tax rules apply to improvements. As opposed to repairs, improvements are capital expenditures that must be written off over time. Safe harbors How can you tell whether work…
Planning for Net Investment Income Taxes
The 3.8% net investment income tax (NIIT) is an additional tax that applies to some higher-income taxpayers on top of capital gains tax or ordinary income tax. Fortunately, there are strategies you can use to soften the blow of the NIIT. Are you subject to the NIIT? You’re potentially liable for the NIIT if your…
Shield life insurance proceeds from estate tax with an ILIT
Life insurance can provide peace of mind, but if your estate will be large enough that estate taxes will be a concern, it’s important to not own the policy at death. The policy’s proceeds will be included in your taxable estate and may be subject to estate tax. To avoid this result, a common estate…
Planning an exit strategy for your business
Tips to maximize value and minimize taxes Every business owner should have an exit strategy that helps recoup the maximum amount for his or her investment. Understanding the tax implications of a business sale will help you plan for — and, in some cases, reduce — the tax impact. One option is to sell your…
Private Foundations vs. Donor-Advised Funds
Weighing your charitable giving options If leaving a charitable legacy is important to you, you may be thinking about establishing a private foundation or other vehicle for managing your philanthropic activities. Private foundations can be highly effective, but they’re expensive to set up and operate. Donor-advised funds (DAFs) are popular alternatives, but they also have…
Can you deduct 2024 bonuses this year?
You may be familiar with the rule that permits a business to deduct employee bonuses this year if it pays them within 2½ months after the end of the tax year. It’s an attractive year-end planning technique that benefits your business and your employees: You enjoy a tax deduction this year, while your employees needn’t…