Tax Guide for Investors

Relief for Missed Rollover Deadline

August 25, 2016

One of the more common mistakes people make in handling their retirement accounts is missing the 60-day deadline for completing a rollover. If you have a good excuse, you can get a ruling from the IRS that avoids the negative tax consequences, but that process is painfully expensive in time and money. Thanks to new guidance from the IRS, in many cases this won’t be necessary.

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Tax Planning in a Nutshell

July 12, 2016

What is tax planning, anyway? We challenged ourselves to provide the shortest possible explanation:

Tax Planning in 100 Words

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Custodial Accounts for Minors

July 9, 2016

Our updated online guide to custodial accounts for minors explains all the ins and outs of using these accounts established under the Uniform Transfers to Minors Act, or UTMA. Pages of interest:

UGMA & UTMA Custodial Accounts for Minors
Top page of this guide, with an index to the other pages.

UTMA Regret: When Custodial Accounts Turn Sour
What if you find that it was a mistake to set up a custodial account? Here are some of the reasons for what we call UTMA regret, and strategies for dealing with it.

UTMA Transfer to a 529 Account
Can you transfer a custodial account to a 529 savings account? Should you?


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Don’t Sell on Leap Day

February 27, 2016

Capital Gains_100x150We issue this warning once every four years: if you bought an investment on February 28 last year, and you plan to sell it for a long-term capital gain, you need to delay your sale until March 1. This is because of a little-known technicality. Strictly speaking, your holding period for a capital asset includes the day of sale but not the day of purchase. Stock or other assets bought on February 28, 2015 have a holding period that began March 1, 2015, so you have to hold until March 1, 2016 to have a long-term gain. It may seem logical that selling on Leap Day would satisfy the year-and-a-day rule when the purchase was on February 28 of the previous year, but that would be leaping to the wrong conclusion.

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Visit Our 2016 Filing Season Guide

January 31, 2016

Form 1040We’ve released our 2016 Filing Season Guide with updated guidance on free tax return filing opportunities and other useful features.

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Inflation Adjustments for 2016

November 22, 2015

We’ve posted inflation-adjusted figures for 2016 (tax rate schedules, tax figures adjusted for inflation, retirement account and HSA figures) in our Reference Room.

The period used for these adjustments (September 2014 through August 2015) saw one of the smallest changes since we began using inflation-adjusted figures in the 1980’s, second only to the period used for the 2009 adjustments, when we were in an economic meltdown. Prediction: those who have been complaining for years that Federal Reserve policies are going to lead to high inflation will continue complaining.

Most of the tax figures we tend to watch closely (contribution limits for IRAs and 401k accounts, the gift tax exemption amount) remain unchanged. The personal exemption amount was previously so close to an adjustment that this year’s boost of less than half of 1% was enough to push it from $4,000 for 2015 to $4,050 for 2016.

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Fairmark’s Social Security Guide Featured on

November 12, 2015

Leading financial website has posted an article about how you can increase your Social Security benefit by continuing to work during retirement. She quotes our author Kaye Thomas, having contacted him after finding helpful information in our online Guide to Social Security Retirement Benefits. By the way, it was a real pleasure talking with author Jennie Phipps.

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Domestic Partnership Won’t Be Treated as Marriage

October 22, 2015

The Treasury has issued proposed regulations reflecting the Supreme Court’s decisions concerning same-sex marriage (Windsor, which struck down relevant parts of the Defense of Marriage Act, and Obergefell, which requires all states to permit and recognize same-sex marriages. In essence, the regulations treat same-sex marriage the same as the marriage of a man and a woman for federal tax purposes. However, registered domestic partnerships, civil unions, and other similar relationships will not be treated as marriages for federal tax purposes. Reproduced below is the explanation of this point offered in the preamble of the proposed regulations. Read the rest of this entry »

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Time to Think About Undoing a Roth Conversion

October 5, 2015

Go Roth_200x300When you convert a traditional retirement account to a Roth IRA, you have until October 15 of the following year to undo that conversion using a recharacterization. Normally this is advantageous if the account suffered a significant decline in value between the date of the conversion and the date you pull the recharacterization trigger. Recent stock market turbulence may leave a fair number of people in a position where they should consider this action.

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Medicare Bombshell?

September 15, 2015

logo_medicareIf published reports turn out to be accurate, it seems likely we’ll be hearing plenty about this in the coming months. A quirk in the rules for Medicare Part B may result in a huge jump in costs — but only for 30% of enrollees.

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