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When you’re expecting the assets you have now to last the rest of your life, taking advantage of any and all tax breaks available to you is crucial.READ THE ARTICLE
Strategic tax planning should occur in every corner of your retirement plan. When you’re expecting the assets you have now to last the rest of your life, taking advantage of any and all tax breaks available to you is crucial. Be sure to review the full list in this article, and check out some of the most noteworthy breaks here:
📌A bigger standard deduction – Upon turning age 65, the IRS “gifts” you with a larger standard deduction. For example, in 2022, the standard deduction for a 65-year-old single taxpayer is $14,700, versus $12,950 for a 64-year-old single taxpayer.
📌Spousal IRA Contribution – You generally have to receive earned income to deposit savings into an IRA; However, if you are married and your spouse is still employed, they can contribute up to $7,000 annually to a traditional or Roth IRA that you own.
📌Timing tax payments – Most view April 15 as the national tax deadline, but in reality, taxes are due as income is earned. Upon retirement, you exit the working world’s tax timeline, which means you have two main ways to pay Uncle Sam: By withholding, or through quarterly estimated tax payments.
📌The RMD workaround – If your RMD is not a necessary part of your retirement income, wait until December to take the money, and hold back a sum of those savings to cover taxes on both your RMD and additional taxable income.
Triple check tax opportunities: Although it’s unlikely you will overlook too many of these tax breaks, there are a few that stand out. It’s always worth looking for those guaranteed returns in financial planning, especially when it comes to saving money on your taxes! Additionally, if you are attempting to take advantage of tax-free profit of a second home, I would encourage you to work directly with a CPA, as this article did not lay it out correctly. Don’t believe everything you read on the internet!