How the SECURE Act could impact your retirement and your taxes

After languishing for several months in bureaucratic limbo, the SECURE Act (Setting Every Community Up for Retirement Enhancement) was signed into law on December 20, 2019; it went into effect on January 1, 2020. With an alarming percentage of Americans not saving enough for retirement, the changes in the SECURE Act are intended to help. It includes changes to some rules for IRAs and other retirement accounts, increases incentives for employers to set up retirement plans and make it easy for employees to enroll in them, and repeals some parts of the tax law passed in 2017. Here are a few important changes that may affect you: Changes to age limits for IRAs Contribution cut-off age Under previous laws, investors were not allowed to add money into a traditional IRA after they reached age 70.5. Under the SECURE Act, that restriction no longer exists — people may now contribute to traditional IRAs for as long as they (or their spouse) earn income, just as with Roth IRAs. NOTE: This law went into effect on January 1, 2020, so people over age 70.5 will not be allowed to fund a traditional IRA for tax year 2019, even though the deadline is

January 3, 2020 No Comments

Four year-end tax strategies to consider

It’s hard to believe we’re fast approaching the end of 2019, but it’s true. Here are four things to consider as you weigh potential tax moves between now and the end of the year. 1. Be smart about your charitable giving If you’re already inclined to donate to charity, then consider donating appreciated securities rather than cash to your favorite charity or to a donor advised fund. Donors who can afford to put away more than $100,000 may want to consider starting a charitable lead trust (CLT). Charitable lead trusts are designed to provide income payments to at least one qualified charitable organization for a period measured by a fixed term of years, the lives of one or more individuals, or a combination of the two; after that, trust assets are paid to either the grantor or to one or more noncharitable beneficiaries named in the trust instrument. 2. Maximize retirement savings Deductible contributions to a traditional IRA and pre-tax contributions to an employer-sponsored retirement plan such as a 401(k) can reduce your taxable income. If you haven’t already contributed the maximum amount allowed, consider doing so by year-end. If you’re a business owner, consider opening a traditional 401(k) profit

December 10, 2019 No Comments

IRA do’s and don’ts for 2019

The end of the year will be here before you know it. Consider making the following IRA tips into New Year’s resolutions and start 2019 on the right foot. NOTE: If you’re interested in starting a traditional 401(k), profit-sharing, or pension plan for year 2018, Azzad’s deadline is December 1). Check IRA and employer plan beneficiary forms. If you got married or had a birth, adoption, or death in the family in 2018, your retirement plan beneficiary forms may need to be updated. Take the new year as a reminder to look at the beneficiaries on your plans and make sure they’re the ones you intend. Don’t forget contingent beneficiaries. Although they’re often overlooked, contingent beneficiaries are critical. They generally inherit the retirement plan if the primary beneficiary passes away before the retirement account owner. You should always have both a primary and contingent beneficiary named on your retirement accounts. Review 2018 distribution reporting. Most IRS reporting will be done in January 2019 for 2018. Check all Forms 1099-R for accuracy. Mistakes are not uncommon. There still may be time to correct these forms if the mistakes are caught early enough. Make sure you receive your notification about RMDs for the upcoming year. If you’re 70½ or

November 2, 2018 No Comments

Living wills and trusts: Here’s what you need to know

Estate planning isn’t the most exciting thing to do, but it’s one of the most important–both for yourself and your family. If you have minor children and some assets, you probably need an estate plan regardless of your tax situation. Why you need a will or living trust If you die without a will (intestate), the laws of the state in which you live will determine the fate of your minor children and your assets. That’s a concerning thought for most people. To avoid this, you need a written will to make your wishes known. The main purposes of a will are to name a guardian for your minor children (if any), name an executor for your estate, and specify which beneficiaries (including charities) should get which of your assets. The guardian’s job is to take care of your kids until they reach adulthood (age 18 or 21 in most states). The executor’s job is to pay your estate’s bills, pay any taxes due, and deliver what’s left to your intended heirs and charitable beneficiaries. The living trust In addition to a will, you may also want to set up a living trust to avoid probate. Probate is a court-supervised legal

September 10, 2018 No Comments