What you need to know about required minimum distributions.
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Money: How Much is Enough?
Financial planning is one of the most important (if not the most important) and concerning money topics that many folks share. How much should you have saved by a certain age? Should new parents start to save now for their newborn baby or is it ok to wait awhile? How much will you need in retirement for healthcare costs or everyday living? 
Split Ends: Why we’re reading about ‘gray divorce’
The Journal of Accountancy recently published an interesting article addressing the issue of ‘gray divorce.’ Gray divorce refers to couples divorcing later in life and while a 30-something divorcing couple may be squabbling over custody, visitation, and credit card bills, those couples divorcing over age 50 are facing battles over retirement funds, the long-term residence, and a diverse portfolio of assets. 
Oftentimes, divorcing couples believe that because the court suggests a particular division of assets, that it is what they must do. Couples may not realize that the court will decide in the absence of either party striking an agreement. When the court makes a decision for the couple, this may not be in the best interest for either.
Learn more about retirement and estate planning in Gary’s blogs
Meeting with your CPA, whether as a couple or individually, will allow you to take a closer look at the reality of the tax and financial implications depending on how the assets are ultimately divided. Also, your CPA will run scenarios, especially if one spouse was the higher earner or if one spouse did not work, which will greatly affect the financial future of both.
Take This Job and … Retire? 5 things you must consider before clocking out
While many entrepreneurs find satisfaction in owning their business and others simply love their jobs, most do not necessarily want to work for the rest of their lives. 
If you are such an entrepreneur, you are not alone. Many look forward to the idea of never having to work again, yet, the concern about whether there will be enough income to survive can’t be overlooked. This leads to the all-important question: How much does one need to save for retirement?
Do You Apply the Five-year Test for Your Roth IRA? Here’s why you should
The pros and cons of Roth IRAs, which were introduced 20 years ago, are well understood. All money flowing into Roth IRAs is after-tax, so there is no upfront tax benefit.
As a tradeoff, all qualified Roth IRA distributions can be tax-free, including the parts of the distributions that are payouts of investment earnings.
To be a qualified distribution, the distribution must meet two basic requirements:
Can You Borrow Money from your Retirement Account … and Should You?
So you’ve finally had enough of the hype and are determined to score a pair of tickets to see “Hamilton” for Lin-Manuel Miranda’s final performance as the lead. Tickets selling through ticket brokering sites are going for outrageous prices, and you’re a bit short on cash. Should you embark on a personal revolution and loot your retirement accounts to go?
In a recent article, we addressed the exceptions to the early withdrawal penalty on IRA distributions taken prior to an individual reaching age 59 1/2. In such a case, the IRA distribution would still be subject to federal income tax and, potentially, state income tax, and would result in permanently removing those assets from the IRA, having a negative impact on the availability of future retirement income. 
So, if you need a quick cash infusion and do not want to suffer the income tax ramification of an IRA distribution, what can you do? One option would be to take a loan from your retirement account. While an advisor may not typically recommend that an account owner borrow from their retirement account, a loan from one’s retirement can have both benefits and costs, as discussed below:
9 Exceptions to the IRA Early Withdrawal Penalty
Almost all of us put money into some type of retirement plan with the goal of one day being able to retire and live comfortably.
Sometimes, though, you find yourself in need of a little extra money for things such as attending college, buying a home, assisting with medical expenses, and the list goes on. So, you decide to take an early IRA distribution to help pay for these expenses. While these are all very important and necessary expenses, understand that once a distribution has been made from an IRA, a taxable event has occurred. 
Taxable Event – What it will cost you
In addition to paying income tax on the distribution, there may be an additional 10% penalty on an early distribution that could apply to taxable distributions made before one reaches age 59 ½. Fortunately, there may be some good news; there are a number of circumstances that can result in an exception to the 10% penalty.
Let’s take a look at the exceptions to the 10% IRA withdrawal penalty for a distribution prior to age 59 ½ and the circumstances that must occur :
The Potential Pitfalls of Self-Directed IRAs
A self-directed Individual Retirement Account refers to any IRA that allows one to direct the IRA’s assets to be invested in nontraditional investment vehicles. 
Examples of these might include real estate, collectibles, and limited partnership interests, and may be done with either a traditional or Roth IRA. In order to participate in such a vehicle, a trustee or custodian that specializes in this unique area must be identified and retained. One must also become well acquainted with the prohibited transaction rules. These rules require that only the IRA benefits from its transactions; not the owner or their family.
Rethinking retirement contributions
The Tax Cuts and Jobs Act of 2017 generally lowered federal income tax rates, with some exceptions. Among the ways in which lower rates impact tax planning, they make unmatched contributions to traditional employer retirement plans less attractive.
Example 1: Chet Taylor has around $100,000 in taxable income a year. Chet contributed $12,000 to his company’s traditional 401(k) in 2017, reducing his taxable income. He was in the 28 percent tax bracket last year, so his federal tax savings were $3,360 (28 percent of $12,000). An identical contribution this year will save Chet only $2,880, because the same income would put him in a lower 24 percent bracket.
Not everyone will be in this situation.
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“Kiddie Tax” impacted by Tax Cuts and Jobs Act
Many higher income taxpayers have long made it a practice to open investment accounts for their children, hoping to take advantage of their lower tax rates. Many years ago, Congress imposed, what is colloquially known as the “kiddie tax” to place strict limits on the amount of investment income that can be taxed at those lower rates.
One of the changes made by the recently enacted Tax Cuts and Jobs Act of 2017 made some significant changes to how the “kiddie tax” is administered, impacting the way adults pass investment income on to their minor children.
The “kiddie tax” is a provision that taxes the unearned income of children under the age of 19 and of full-time students younger than 24 at a special rate. Under both the new law and the old, the first $1,050 of a child’s income is tax-free and the next $1,050 is taxed at a rate of 10 percent.
Since 1938, Zinner has counseled individuals and businesses from start-up to succession. At Zinner, we strive to ensure we understand your business and recognize threats that could impact your financial situation.
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