In this video, Elizabeth Hutton, CFP®, Vice President, Financial Planner, explains the three tax buckets—tax-deferred, tax-free, and taxable—and how each is treated for tax purposes. She outlines basic considerations around tax diversification and asset location within a retirement plan.
What Is Taxable Income? Taxable income is the amount of your earnings that the government uses to calculate your income tax. It’s not necessarily the same as your total income (or gross income). After adjustments, deductions, and credits are applied, what remains is your taxable income — and the lower it is, the less tax you typically pay. The federal tax system (through the IRS) and most states start with your Adjusted Gross Income (AGI) and then apply deductions and credits to reach your taxable income. (IRS) Lowering taxable income may: Strategies to Lower Taxable Income Here are several common strategies individuals can use to
If you’re just starting to think about your financial future, the world of retirement savings can feel overwhelming. There are so many acronyms and account types: 401(k)s, IRAs, HSAs… the list goes on. One term you might come across is “Roth IRA.”
Today we are going to explore some strategies tailored specifically to W-2 employees to minimize their tax burden while maximizing their financial health. Navigating the realm of taxation can often feel like a daunting task. However, there are several straightforward methods available to employees to actively lower their taxable income, thereby retaining more of their hard-earned dollars.
In July 2024, the IRS finalized regulations regarding required minimum distributions for inherited retirement accounts, providing crucial clarifications on the provisions established by the SECURE Act 2.0. This legislation significantly reshaped retirement savings laws, particularly concerning how distributions are managed for beneficiaries of retirement accounts inherited in 2020 or later, especially non-spousal ones. I’m Elizabeth Hutton, Vice President and Certified Financial Planner at Howe & Rusling. In today’s Street$marts we will tackle the implementation of the 10-Year Rule, which mandates that most non-spouse retirement account beneficiaries must fully deplete the inherited account within ten years of the original account holder’s death.
This legislation significantly reshaped retirement savings laws, particularly concerning how distributions are managed for beneficiaries of retirement accounts inherited in 2020 or later, especially non-spousal ones. The new rules, effective in 2025, address longstanding questions about the interpretation of the 10-year rule, which mandates that most retirement plan and IRA beneficiaries must fully deplete the inherited account within ten years of the account holder’s death. These regulations impact beneficiaries and their strategies for managing inherited retirement accounts. Here’s a detailed look at the finalized RMD regulations for inherited retirement plans and IRAs. This piece is only applicable to accounts inherited
In this episode of StreetSmarts, Elizabeth Hutton, Vice President and Financial Planner at Howe & Rusling, delves into the intricacies of Roth Conversions. Discover how high earners can navigate Roth IRA contribution limits, and explore the strategic “Roth Conversion Window” between retirement and required minimum distributions. She will guide you through the criteria for optimal candidates, shed light on critical considerations, and unveil the strategic benefits, from mitigating future tax risks to enhancing estate planning.
The housing market is crazy, but that doesn’t mean prudence should fly out the window.
