After-Tax Dollars in Traditional IRAs
Problems can arise for people who hold nondeductible dollars in their IRAs when they take distributions. Unless they’re careful, they may pay tax twice on the same dollars. Workers under age 70½ can deduct contributions to a traditional IRA, as long as they are not covered by an employer’s retirement plan. The same is true for those workers’ spouses. If these taxpayers are covered by an employer plan, they may or may not be able to deduct IRA contributions, depending on the taxpayer’s income.
“Combo” Products for Long-Term Care Coverage
If you or a loved one ever need help with daily living activities, custodial care can be expensive, whether the care is provided at home, in an assisted living facility, or in a nursing home. Long-term care (LTC) insurance is available, but insurance companies have learned that these costs can be steep. Consumers face the prospect of paying thousands of dollars a year, every year, and never getting any benefit at all if it turns out that custodial care is not needed.
Defined Benefit Plans for (Very) Small Companies
Traditional defined benefit plans, structured to provide a lifelong pension, have become rare in the private sector while they are still the norm for public sector employers. Ironically, these plans might be a good fit for extremely small companies. A possible prospect could be a business or professional practice with one or two principals who are perhaps 5–10 years from retirement, with a few employees who are younger and modestly compensated.
Use this handy tax calendar for February and March’s upcoming 2017 taxes due.