Moving money from a tax deferred retirement account to a potentially tax-free Roth IRA usually will trigger income tax. That won’t always be the case, though, thanks to recent IRS announcements. Some examples show how this can work. Example 1: Nancy Martin has participated in her company’s 401(k) plan for many years. She typically has… Read more Tax Free Roth IRA Conversions

Donating appreciated assets (including securities) can be a thoughtful tactic for people who can’t offset capital gains with capital losses. Example 1: Lynn Knight invested $8,000 in an aggressive stock fund in 2009. The shares are now worth $20,000, thanks to some excellent selections, but Lynn believes it is time to take her gains. Selling… Read more Year-End Charitable Tax Planning

Besides donating appreciated securities to charity, another solution for avoiding highly taxed capital gains on these securities is to transfer the relevant assets to a family member in a lower tax bracket. The recipient might be able to sell and pay little or no tax on the sale. Example: Grace Fulton invested $10,000 in ABC… Read more Year-End Family Tax Planning

One reliable way to reduce the impact of higher tax rates, surtaxes, phaseouts and so on is to make tax deductible contributions to retirement plans. In 2014, the maximum salary (and tax) deferral for 401(k) and similar plans is $17,500, or $23,000 if you are 50 or older. If you are not maximizing such contributions… Read more Year-End Retirement Tax Planning