Tag Archive

Taxable VS. Tax Deferred Investments

Published on March 19, 2015 By Tim Barton

How much would you have to earn each year from a taxable investment in order to equal earnings on a tax-deferred investment? This chart illustrates the potential benefits of a tax-deferred investment vs. a taxable investment. Annual Tax-Deferred Yield Federal Income Tax Bracket: 10% 15% 25% 28% 33% 35% Annual Taxable Equivalent Yield 3% 3.33% 3.53% […]

Understanding Required Minimum Distributions

Published on February 12, 2015 By Tim Barton

The primary  goal of most retirees is to have adequate retirement money they will not outlive.  This goal could conflict withthe objective of the required minimum distribution rule which is to ensure that the entire value of a traditional IRA or employer-sponsored qualified retirement plan account will be distributed over the IRA retiree’s life expectancy. The big question is what happens […]

What is Trust?

Published on January 25, 2015 By Tim Barton

The word “trust” is applied to all types of relationships, both personal and business, to indicate that one person has confidence in another person. For our purposes, a trust is a legal device for the management of property. Through a trust, one person (the “grantor” or “trustor”) transfers the legal title to property to another […]

2015 Chart of Federal Individual Tax Rates

Published on January 8, 2015 By Tim Barton

Did you have a New Year dream that taxes disappeared? I didn’t think so. 2015 is here and will be over before we know it. Since taxes are fact of life we all must plan with them in mind. Here is a table/chart of 2015 Federal Income Tax Rates for Individuals to help plan ahead.  For […]

What is the Marital Deduction?

Published on August 14, 2014 By Tim Barton

What Is the Marital Deduction? The marital deduction (I.R.C. Sections 2056 and 2523) eliminates both the federal estate and gift tax on transfers of property between spouses, in effect treating them as one economic unit.  The amount of property that can be transferred between them is unlimited, meaning that a spouse can transfer all of […]

IRA Rollovers Become IRS Target

Published on April 14, 2014 By Tim Barton

On March 28 I wrote a post about a U.S. tax court altering the rules on IRA to IRA  rollovers and wondered when the IRS would officially change the rules and start enforcement.  Previously according to publication 590 and several IRS letter rulings a taxpayer could rollover each IRA account IRA to IRA once per year- per […]

IRA Rollover Rules Altered by Tax Court

Published on March 28, 2014 By Tim Barton

The January 2014  Bobrow tax court ruling  is an IRA game changer with huge ramifications for IRA owners.   The tax court has ruled the once a year IRA rollover rule applies to all of someone’s individual retirement accounts and not to each separately.  This ruling is stunning in that it changes the Internal Revenue Service’s long standing position in private […]

Unemployed or Under-employed Spouses & IRA Contributions

Published on March 4, 2014 By Tim Barton

Don’t forget about your unemployed or under-employed spouse when it comes to IRA contributions. Given the current unemployment rate, you may have a nonworking spouse at the moment. That doesn’t mean they are not able to make an IRA contribution. As long as you are married, filing a joint tax return, and under the age of […]

Pay Taxes On What You Spend – Not On What You Earn

Published on February 27, 2014 By Tim Barton

  Taxes are inevitable.  You know that part.  Each April 15, you tally up all of your 1099 forms that you have received and pay taxes on your investments, even if you haven’t actually spent a penny of those dividends and interest earnings.  Unfortunately, the money lost to taxes will never be available to you […]

ObamaCare Tax Penalty Rates 2014 – 2016

Published on February 23, 2014 By Tim Barton

The ObamaCare penalties for failing to purchase qualified health insurance start in tax year 2014. If a person was required to purchase minimum essential coverage and did not, she/he would only be required to pay a tax penalty for not purchasing PPACA coverage (if she/he files a U.S. tax return). In many cases, this tax is far less […]

Retirement Savings Tax Credit

Published on February 3, 2014 By Tim Barton

What Is the Retirement Savings Tax Credit? This is often an overlooked tax credit. Remember you have until April 15, 2014 to make your 2013 IRA contribution.  The Retirement Savings Tax Credit dates back to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA 2001)which  introduced a new temporary tax credit for IRA contributions and elective deferrals […]

Tax Refund? Must Pass the Test First

Published on January 30, 2014 By Tim Barton

  You better pay attention because there is going to be a quiz and you might have to take it.  This quiz  must be  passed before some tax refunds are sent out.  In order to protect taxpayers expecting refunds some of them  will be sent a letter from the Wisconsin Department of Revenue directing them to take a 4 […]

2014 Individual Federal Income Tax Rates

Published on January 7, 2014 By Tim Barton

2014 Individual Federal Income Tax Rates Federal income tax rates are available on this handy chart to help with your tax planning and preparation. Download the 2014 Tax Digest  PDF For additional information regarding: Individual income tax rates Deductions & Tax Credits Social Security/ Medicare rates Health Savings Accounts Retirement Plan Contribution Limits including Traditional and […]

Foundation of Retirement – Social Security

Published on June 4, 2013 By Tim Barton

Social Security payments are important to most American’s retirement plans.  After all,  a worker has contributed a significant portion of their income to Social Security via payroll taxes;  starting at 2.25% in 1950 – steadily increasing to 15.3% 1990 and later.  Because retirement could last 30 years or more a retiree must consider how and when to receive their […]

2013 Medicare Tax Increases

Published on February 7, 2013 By Tim Barton

The sale of real estate including your home or farm could be subject to Medicare taxes. The Affordable Care Act’s increased Medicare taxes are in effect now for tax year 2013. Some workers are wondering why their take home pay has been reduced. Part of the reason is the payroll (SS) tax cut has expired and […]

Roth IRA Taxation in 2013

Published on January 28, 2013 By Tim Barton

How and when is a Roth IRA taxed?  This is one of the frequently asked questions of the 2013 tax season.   Many are wondering if the “Fiscal Cliff Tax Fix” had any effect on Roth IRAs.  Here is a  Roth IRA Taxation Chart to help you understand how a Roth IRA is taxed and how it avoids […]

What Adjustments to 2013 Gross Income Are Available?

Published on January 23, 2013 By Tim Barton

Even those who are retired have concerns about the amount of income taxes they are required to pay. So being it is now “tax” season some tax saving information may be helpful. Once total or gross income from all sources has been determined, certain adjustments to income are available.  These adjustments amount to a reduction […]

Post Fiscal Cliff – 2013 Federal Income Tax Rates for Individuals

Published on January 17, 2013 By Tim Barton

Post “fiscal cliff” tax rates are available on this handy chart to help with your tax planning and preparation. Update: Roth IRA Enhancement strategy post. If you would like a copy of this tax chart emailed to you, let me know by confidentially leaving your email here.

New IRS Withholding Tables after “The Fiscal Cliff Fix”

Published on January 3, 2013 By Tim Barton

Here is the IRS press release regarding the new Fiscal Cliff withholding tables.   IRS Provides Updated Withholding Guidance for 2013 IR-2013-1, Jan. 3, 2013 WASHINGTON — The Internal Revenue Service today released updated income-tax withholding tables for 2013 reflecting this week’s changes by Congress. The updated tables, issued today after President Obama signed the […]

What is the Fiscal Cliff?

Published on December 2, 2012 By Tim Barton

  The “Fiscal Cliff” is the description some economists have used to describe the potential situation at the end of 2012 when several U.S. tax and fiscal changes are scheduled to occur.  This “perfect storm” of change includes the expiration of the Bush income tax cuts at the end of 2012, and in January 2013 […]