A Roth conversion can affect the premium you pay for Medicare Part B (the part that provides medical insurance, as opposed to hospital insurance or prescription drug coverage). For the year of the conversion it increases your income, potentially leading to an increase in your premium. On the other hand, in later years when you’re withdrawing money from your retirement account, your income will be smaller as a result of having done the conversion in a prior year, potentially allowing you to pay a smaller premium for many years. The net benefit or detriment will depend on individual circumstances. (more…)
Archive for July, 2010
Roth Conversion and Medicare Part B Premium
Thursday, July 15th, 2010Gulf Coast Tax Help Saturday
Thursday, July 15th, 2010On Saturday July 17 the IRS will offer assistance to individuals who have questions about the tax treatment of BP claims payments or are experiencing filing or payment problems because of the oil spill, at locations specified on this page of the IRS website.
Anticipated Tax Rates for 2011
Tuesday, July 13th, 2010Federal income tax rates are set to change next year. We need to be taking these anticipated changes into account right now as we make decisions about such matters as tax management of investments, retirement plan contributions, and Roth conversions. We’ve added a page that explains the Obama proposal on tax rates and tracks developments on this issue.
Understanding Investment Risk – 1
Monday, July 12th, 2010Suppose you’re offered a choice of two investments. We can’t predict how either one will perform, but based on their characteristics the performance we would expect on average from the two investments is the same, but one carries a greater likelihood of truly superior performance. Which would you choose?
When you understand investment risk well enough to respond confidently with the correct answer to this question, you’re far ahead of the typical investor. (more…)
Free Copy of “That Thing”
Sunday, July 11th, 2010For an opportunity to win a free copy of our new book on investing, That Thing Rich People Do, read a review of the book and details of the giveaway on the website Engineer Your Finances. And while you’re there, poke around the website for an interesting perspective on personal finance.
Friday Wrapup
Friday, July 9th, 2010Tax developments were a little slow for this shortened holiday week, but we managed to find several interesting topics to cover, including a court ruling on exempt status for an organization formed for the purpose of . . . well, you’ll just have to read on. (more…)
Summertime Fun with Taxes
Friday, July 9th, 2010Hey, kids! Are you making money this summer? Great! Your parents are so proud! The IRS thinks it’s pretty cool too, and has some totally awesome tax information for you. (more…)
Federal District Court Strikes Down DOMA
Thursday, July 8th, 2010In a case that would affect filing status under the federal income tax as well as a broad array of other rights and obligations, including health benefits and Social Security benefits, a federal district court in Massachusetts has ruled that the 1996 law defining marriage as meaning “only a legal union between one man and one woman as husband and wife” — the Defense of Marriage Act, or DOMA — violates the Equal Protection Clause of the United States Constitution. (more…)
Today’s Most Fascinating Tax Case
Thursday, July 8th, 2010Ladies, this guy wants you to have his baby. Seriously. But it’s not what you think. You don’t have to date him. He’s formed a nonprofit corporation to make his sperm available, and he took the IRS to court when they denied its application for recognition of exemption. (more…)
Don’t Overlook Credit for Summer Childcare
Wednesday, July 7th, 2010The IRS sent out a reminder that summer childcare, and even day camp for children under 13, can qualify for the childcare credit. (more…)
