Deciding between the Dependent Care Flexible Spending Arrangement (DCFSA) and the Credit for Child and Dependent Care Expenses can be confusing. Let me break down the rules, so you don’t overpay for childcare. You must work or actively look for work Whether you are using the DCFSA or Credit for Child and Dependent Care Expenses, you . . .
After reaching financial independence, you have two options to generate income to cover your expenses: Continue working Draw income and principal (eventually) from your investments Yes, it is possible to live only on the income generated from your investments. Yet, for many people, they will be required to dip into the principal at some point. At . . .
Having a sound tax strategy is critical to long-term wealth building. Whether you’re an employee, business owner, or invest in real estate there are tax wise decisions you must make every day. After making a smart tax decision your next step is to decide what to do with your winnings. To understand a tax strategy, I . . .
Summer 2017’s season of the Bachelorette was dedicated to Rachel Lindsey. However, if you lived in Madison, WI the season was dedicated to the hometown favorite, Peter Kraus. While Peter did not end with the final rose, he did position himself as very likable and great candidate for the next Bachelor. For what it’s worth, . . .
Last week we discussed how to complete a back-door Roth IRA contribution. For many, this strategy is a slow and boring way to do it. Fortunately, there is another option, which can lead to larger Roth contributions when you earn too much. The ability to use this strategy is relatively new. In September 2014, the IRS released Notice 2014-54 to grant . . .
A Roth IRA grows tax-free and provides tax-free distributions. These features make a Roth IRA a powerful tax shelter. Because of these unique benefits, the desire to get money into a Roth IRA is high. However, income thresholds limit access to Roth IRAs. Therefore, certain earners are unable to gain direct access to a Roth IRA. If . . .
Early retirement sounds like a myth. Maybe you believe in it a little bit, but think it is limited to those born with a silver spoon or winning the lottery. An inheritance or winning the lottery is a definite possibility but not one you can plan on experiencing. Two things you need to understand about . . .
Now that we understand in tax planning it is all about timing, let’s look at a strategy to maximize your 2017 charitable contribution deduction. Under proposed tax reform, it is clear that itemized deductions will change significantly. For many people this means using the itemized deduction will go away completely. This does not automatically make . . .
Most people I know do not like paying taxes. Some do not like paying their fair share while most people are fine paying their fair share of taxes. To those who are not interested in paying their fair share… be careful because that can lead to tax evasion. Tax avoidance is cool. Tax evasion is . . .
The past two weeks we looked at why a Roth Account is the best and why a Tax-Deferred Account is the best. While the last two articles hit on both 401(k) and IRAs, this week we are focusing on choosing between a Roth IRA or a Traditional IRA. The decision matrix behind these two choices . . .