Tax Strategies

A Guide to Starting a Roth IRA for a Child

A Roth IRA can be one of the most powerful tools to set a child or teenager on the path to lifelong financial success. By contributing earned income into a tax-free retirement account early, parents can not only help their children build wealth that compounds for decades, it can also create conversations around saving for the future that gives a child the gift of perspective. However, funding a Roth IRA for a child does add some complexity. The rules around who qualifies, what counts as income, and when taxes apply can be confusing—especially when minors earn money from babysitting, lawn care,…
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What You Should Know Before Attending a Real Estate Investment Webinar

Real estate investment webinars are increasingly popular, promising attendees insider knowledge, financial freedom, and “secrets the wealthy don’t want you to know.” While these sessions can provide interesting teasers, they are often structured as much to generate sales leads as to educate.Having attended several real estate webinars, here is a guide on knowing how to identify hype, omissions, and unrealistic promises can protect you from costly missteps. What to Expect: Part Education, Mostly Sales Funnel Most real estate webinars are designed with a dual purpose:Education – Presenting concepts, strategies, and case studies that build interest and credibility.Sales Funnel – Guiding…
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The Tax Torpedo: How It Works and How to Avoid It

Many retirees are surprised to find themselves paying more taxes than expected in retirement—especially on their Social Security benefits. One major culprit is the so-called “Tax Torpedo”, a term used to describe the sudden and steep marginal tax rate increase that occurs as Social Security benefits become taxable.  What is the Tax Torpedo? The Tax Torpedo refers to the sharp rise in marginal tax rates that can occur when a retiree's income crosses certain thresholds, causing more of their Social Security benefits to become taxable. This can lead to an effective marginal tax rate far higher than their nominal tax…
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Required Minimum Distributions (RMDs): What You Need to Know

When it comes to retirement, one of the most important—but often surprising to learn—rules is the Required Minimum Distribution (RMD). RMDs are mandatory withdrawals from certain retirement accounts that begin after a specific age. Failing to take RMDs on time can result in tax penalties, so it’s important to understand how they work and how to plan for them. What Is an RMD? A Required Minimum Distribution is the minimum amount you must withdraw annually from your tax-deferred retirement accounts once you reach a certain age. These withdrawals are mandated by the IRS to ensure that retirement savings eventually become…
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How to Calculate Adjusted Basis on Your Primary Residence

When you go to sell your primary residence, calculating your adjusted basis is an essential step in determining whether you’ll owe capital gains taxes. The adjusted basis represents your investment in the property and is used to calculate your taxable gain or loss upon sale.So whether you're thinking about selling your home or just want to know what to track while you own the home to make selling easier in the future, this article explains what the adjusted basis is, how it’s calculated, and why it matters for homeowners. What is "Adjusted Basis"? Your basis is generally what you paid…
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What Can You Really Use Your HSA For? A Deep Dive Into Eligible Expenses

An HSA (Health Savings Account) is a special savings account available to individuals with a high-deductible health plan (HDHP). Contributions are tax-deductible, earnings grow tax-free, and withdrawals are also tax-free when used for qualified medical expenses.This triple-tax benefit makes HSAs a powerful way to save for both current and future healthcare costs—especially in retirement. To learn more about the benefits of HSA's, see my article A Healthy Investment: Discover the Surprising Benefits of Health Savings Accounts – Gilbert Wealth. What Can You Use the HSA for? HSA funds can be used for a wide range of qualified medical expenses, as defined…
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How to Report Donations to a Donor Advised Fund (DAF) On Your Taxes

Donor Advised Funds (DAF) allows donors to contribute assets, receive immediate tax deductions, and later direct grants to their preferred charitable organizations. They are simple, yet powerful tools to use in a giving strategy. See Charitable Giving through a Donor Advised Fund – Gilbert Wealth for more information on why DAF's are so powerful.If you've decided to use a DAF, now you need to correctly reporting these donations on your tax return is crucial to ensure compliance with IRS regulations and to fully benefit from the available deductions. The Tax Benefits of DAF's Immediate Tax DeductionOne of the main advantages of donating to…
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Guide to the IRMAA Exemption Form (SS-44)

Medicare beneficiaries with higher incomes are subject to an additional charge on their Part B and Part D premiums, known as the Income-Related Monthly Adjustment Amount (IRMAA). This surcharge is based on modified adjusted gross income (MAGI) from past tax returns. Read more about IRMAA here: Understanding IRMAA: What It Is and Its Impact on Medicare Premiums – Gilbert WealthHowever, if you've experienced a significant life-changing event, such as retirement or a reduction in income, you may qualify for a reduction in your IRMAA. Form SSA-44 allows you to report such events and request an adjustment to lower your Medicare…
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Gifting and the Annual Exclusion

Lifetime gifts are a wonderful way to bless your loved ones and make a meaningful impact on their lives. Whether it's helping a child with educational expenses, supporting a family member in need, or simply sharing your wealth to enhance their financial security, gifting allows you to express your generosity while witnessing the benefits of your support firsthand. Beyond the emotional rewards, thoughtful lifetime gifting can also provide financial advantages by reducing the size of your taxable estate and taking advantage of tax-free gifting opportunities. With proper planning and an understanding of the applicable tax rules, you can ensure your gifts provide…
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The Differences Between Short-Term and Long-Term Capital Gains

Capital gains occur when you sell an asset for more than its purchase price. The distinction between short-term and long-term capital gains is important for tax purposes, as each is treated differently under U.S. tax law. Short-Term Capital GainsShort-Term Capital Gains are gains from the sale of assets held for one year (365 days) or less are considered short-term.These gains are taxed as ordinary income, meaning the tax rate depends on your marginal tax bracket which is the highest tax rate applicable to you.  Currently, ordinary income rates range from 10% to 37%. For the latest rates, see Latest Ordinary Income…
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