By making wise decisions, you could keep more money.
Taxes are a fact of life.
If you make money, chances are you will owe the government at some point in your life.
And taxes do not end in retirement.
Still, according to a recent Kiplinger article titled “Retirees, Cut Your Taxes With These Moves,” you may be able to minimize what you owe.
Are you an investor?
Do you have taxable income up to $37,650 if filing alone or $75,300 if filing jointly?
If yes, you could receive a zero percent tax rate for your long-term capital gains.
You will need to report your profits on Form 8949 and then carry them over to Schedule D.
The zero percent rate will be applied to the appropriate profits.
Are you 65 years of age or older?
Your standard deduction will be greater than those for younger individuals.
The normal deduction is $6,300 if you are single and $12,600 if you are married.
If you are 65 or older, the deduction grows to $7,850 for singles, $13,850 if your spouse is younger than 65, and $15,100 if your spouse is older than 65.
You can save money and time itemizing, if the total of this standard deduction is greater than your itemized deduction.
Are you self-employed?
If so, you are not limited by the deductible cap of 7.5 percent of your adjusted gross income for your Medicare expenses.
Are you married?
Is your spouse still working?
If yes to both, then he or she can contribute to your IRA.
If you were younger than 50 last year, you will be limited to a $5,500 contribution.
On the other hand, if you were 50 or older, then your limit is $6,500.
Is there an maximum age limit?
This depends on the type of IRA.
Do you have a traditional IRA?
If yes, you can make contributions up until you are 70½.
Do you have a Roth IRA?
You have no age limit.
As long as your spouse is earning enough to fund your account as well, he or she can make contributions.
Maximizing retirement income takes planning.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Kiplinger’s (March 2017) “Retirees, Cut Your Taxes With These Moves”