Tax Guide for Investors

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.

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.

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 »

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.

Read the rest of this entry »

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.

Read the rest of this entry »

July Law Contains New Tax Compliance Rules

August 22, 2015

Seal of the U.S. CongressJust as highway funds were set to run out, Congress passed a highway bill and President Obama signed it into law July 31, 2015. To pay for the bill without raising tax rates, Congress included some new compliance provisions that will affect some recipients of inherited property, owners of partnership interests, and taxpayers with mortgages.

details: Surface Transportation Act of 2015

A Tax-Free Fringe You Hope You’ll Never Need

August 13, 2015

Internal Revenue ServiceImagine this. A hacker breaks into the computer system of the company where you work and downloads employee data, including your social security number and date of birth. The company announces that they’ll pay for identity protection services for the employees, but then some wise guy says hey, isn’t that a taxable fringe benefit? Doesn’t the company have to include the value on the employee’s Form W-2, forcing the employee to pay tax on this amount?

Fortunately, the wise guys at the IRS say no. The employer doesn’t have to report this item on Form W-2 (or, for non-employees, on Form 1099-MISC), and the employee doesn’t have to report it on his or her tax return. And the same is true if you received identity protection services from a company where you shopped, if it’s provided because of a data breach. This rule doesn’t apply if you receive these services for reasons other than a data breach, or if you receive cash in lieu of such services.

details: IRS Announcement 2015-22 (PDF)

An Easier Way to Report Capital Gains

February 27, 2015

Taxation of InvestorsIf you have more than a few sales of stocks, mutual funds or other investments to report on your tax return, you may want to be aware of a recent change in IRS requirements for reporting these transactions.

details: Easier Capital Gains Reporting

Backdoor Roth Contributions

February 14, 2015

Roth retirement accountsBackdoor Roth contributions provide a way for some people with income above the Roth IRA contribution limits to add dollars to a Roth IRA. We’ve added two new articles to our online guide to Roth Retirement Accounts, both based on material in our book Go Roth!:

Backdoor Roth IRA Contributions
Some people can use this technique to add to a Roth IRA even when their income is above the limit for Roth IRA contributions.

Possible Challenge to Backdoor Roth Contributions?
Some tax professionals have identified a risk in using this technique, but we believe there is no cause for concern.

New Roth Book Available

February 11, 2015

The 2015 edition of our book on Roth retirement accounts, Go Roth!, is now available. This update reflects changes in tax rates, legislation and IRS guidance through January 15, 2015.

more info  |  order from