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From the expert: This article pulls valuable tidbits of tax-minimization insight from national financial guru and one of my favorite retirement specialists, Ed Slott. Some of his top areas to watch this year in the realm of tax planning include:
📌 Backdoor Roth IRAs: Slott advises holding off on Backdoor Roths, considering the proposed legislation that would ban them, until we know more about which direction the Build Better Act is going
📌 1099 mistakes: Slott suggests reviewing your Form 1099s closely, as they can contain errors
📌 New RMD tables: New life expectancy tables have been created for 2022 RMDs, so review this information carefully and ensure you’re not using an old table
📌 Qualified Charitable Distributions (QCDs): Slott mentions that the ideal time to do QCDs is at the beginning of the year, which provides you the opportunity to not have to take an RMD for the year
📌 The Securing a Strong Retirement Act of 2021 (“Secure 2.0”): According to Slott, this has a good chance of passing, so apprise yourself on what’s included and what changes could impact your retirement plan
It pays to be proactive: Much of your life might unfortunately be on auto-pilot, but your tax planning shouldn’t be.