Tax season is in full swing, and by now your mail (or in) boxes have begun to be inundated with “IMPORTANT TAX DOCUMENTS ENCLOSED” correspondence. For the newly retired, their first tax season after leaving the workforce may catch them a bit by surprise. They are used to receiving a paycheck from their company, and their employer usually helped them when it came withholding taxes from their earnings...
Relating Retirement Savings to Taxes
Making the right decisions about your retirement savings can do wonders for your tax burden. That’s because retirement accounts come with tax advantages. How much you pay in federal income tax is based on your taxable income, which is your income minus any exemptions or deductions for which you qualify. The higher your taxable income, the higher the percentage of your income you may pay in taxes, depending on your income tax bracket....
Year-End Retirement Savings Actions
The end of the year is approaching, but it may not be too late to make some retirement account decisions that can help you reduce your 2016 tax burden. In fact, for IRA accounts you have until your tax filing deadline (usually April 15 of the following year) to make a contribution that will count towards tax year 2016. With that in mind, here are a few last-minute moves you can make that will qualify you for retirement savings tax perks....
Taxing Forethought
It may seem extreme to plan today for the taxes you'll pay 20, 30 or even 40 years from now, but smart people do just that. In reality, taxes have the potential to be one of, if not the largest expense during your retirement. Consider this - after decades of deferring tax on your retirement savings, the tax bill becomes due once you tap those resources for income when you leave the workforce. Therefore, you need to plan ahead if you want to minimize the taxes you will pay during your retirement years....