A client once asked if there is an upper age limit for paying taxes. Answer: No, there is no upper age limit on paying taxes. If you have enough taxable income you must file and pay even if you are a 100 years old. In fact, it’s likely that someone will still be dealing with your tax concerns after you pass away. Death and taxes – two of life’s certainties. After retirement, many people are not sure how taxes will work. Nothing in the tax code is simple, but I hope to shed a little light on post-retirement taxes. Today, I am focusing on Federal taxes. Your state might tax none/some/all of your retirement income. First, let’s take a look …
Four Years Later – Micro Investing with Acorns
Four years ago, I wrote about my lifelong passion (some would say obsession) for spare change. This dates back to counting the spare change and “egg money” in my grandmother’s chipped gravy boat in the 70’s. Today, this is the spare change stash in my office: But here in the 21st century, I don’t have too many cash transactions, and therefore not a lot of physical spare change. Enter the micro investing app Acorns* which invests your digital spare change. Four years ago, I signed up for Acorns and linked my checking account. The checking account is my “funding source”. Then I linked my credit card. You can link more than one card including debit …
A break for low-income seniors in MA – the Circuit Breaker Tax Credit
Massachusetts Senior Circuit Breaker Tax Credit The Massachusetts Senior Circuit Breaker Tax Credit has been around for a long time. But I suspect not everyone who is eligible takes advantage of it. Once in a while I come across someone, usually a client’s elderly parent, who is unaware they are eligible for this credit. When that happens they can file/amend the last 3 years of tax returns. This results in a $3,000+ windfall. Taxpayers may be eligible even if they aren’t required to file tax returns. This credit is available to both homeowners and renters. This article is specific to Massachusetts, but there are similar programs in many other …
You Must Take a Distribution from Your IRA But Don’t Need the Money- Now What?
Recently, I was sitting with a client celebrating the fact that her IRA balance is nearing $1 million dollars. This is always an exciting milestone. I rang the bell for her. In 2023 my client will turn 72 and she will need to take a distribution from her IRA. The distributions are called Required Minimum Distributions. (RMDs) RMDs must also be taken from employer retirement accounts such as 401k/403b plans starting at age 72.* The starting age was recently changed, it used to be 70.5The amount that must be distributed is based on a calculation – more on that below. Why does the government require these distributions? Because in most cases the …
Markets Have the Worst First Half of a Year in Decades – now what?
Do you remember Paul Harvey? If you don’t remember life before the internet skip this paragraph. But those of a certain age may remember his daily radio program – at the end of each broadcast he would say in his distinctive radio voice: “And now you know…the rest of the story”. Earlier this month you likely saw the headlines: The first six months of 2022 saw the S&P 500 decline 21%. The S&P 500 is a group of the 500 largest stocks in the United States. The last time the S&P 500 fell this much in the first half of the year was over 50 years ago, in 1970, shown here: What do you think happened in the second half of …
