Pros and Cons of Asset Management Fees
A transition is underway within investment firms. Increasingly, the people you hire to manage your money don’t refer to themselves as brokers or stockbrokers. Instead, they’re now financial advisers, financial planners, or financial consultants. The titles may not be important, but the method of compensation can be crucial. Learn more in this month’s newsletter.
Win With a Roth IRA Reversal
IRAs mainly come in two broad categories: Traditional and Roth. Traditional IRAs may be funded with pre-tax or after-tax dollars. Withdrawals of pre-tax money and earnings from the IRA are taxed at ordinary income rates. Once the IRA owner reaches age 70½, required minimum distributions (RMDs) from the account begin and last as long as there is money in the account. Any shortfall in a taxpayer’s RMDs for a year is subject to a 50% penalty.
Roth IRAs are always funded with after-tax dollars. Account owners never have RMDs. Once a Roth IRA has been in place for five years and the account owner reaches age 59½, distributions are tax-free.
Astute combining of these two IRA varieties can result in a substantial stream of cash flow, moderately taxed, for you or your beneficiaries, or both.
Year-End Thank You Gifts From Business Owners
Amounts you spend on gifts to your workers probably will be tax deductible for your company. However, the key question for employees is whether the gifts will be treated as taxable income.
Generally, a cash gift such as a gift card or gift certificate, will be taxable. The amount will be subject to federal and any state or local income tax withholding as well as unemployment tax and FICA taxes.
Non-cash gifts will be untaxed if they fall under the de minimis classification, meaning that the value is so low that it would not be reasonable for an employer to bother with record keeping, withholding, and so forth. Learn more plus the limit per gift that you are allowed to deduct in this month’s newsletter.
Use our handy tax calendar for upcoming tax dates in December of 2017 and January of 2018.
Stephen Merritt is a full-service accounting and cpa firm in Virginia Beach offering tax preparation and accounting services for small to medium-sized businesses and their families. Our accounting services and tax services include QuickBooks training; Financial Statements preparation; Compilations, Reviews and Audits; individual, corporate and payroll tax return preparation; and new business formation. Give us a call at 757-420-5778 today for more information, or email us now.