As the holidays approach, we would like to take the time to thank you for your continued relationship with Littman Krooks LLP. May your holiday season be filled with much joy, happiness and success. Warm thoughts and best wishes for a very Happy New Year.

 

If one wishes to make charitable gifts as part of a tax-saving strategy, now is the time.

Although tax returns are not due until April 15, December is an excellent time to do a "dry run" on one's tax return, to get an estimate of what one expects to pay in taxes, and to determine what charitable giving one may want to do before the end of the year, in order to reduce taxable income and lower one's tax bill.

Newly retired individuals may benefit especially from such a dry run on their tax returns, as retirees are often unclear on how to manage taxes in retirement. If there are problems with withholding on pensions, Social Security or IRA withdrawals, then one may end up paying penalties and interest at tax time. IRA account owners can make use of a key strategy to deal with any underpaid taxes. It is possible for IRA owners to make a distribution and withhold the whole sum for taxes. The IRS will not consider it a late payment, but will treat it as taxes paid throughout the year.

Another IRA strategy for retirees is charitable IRA rollovers. After age 70 1/2, owners of traditional IRA accounts must begin taking required minimum distributions. However, they can make direct transfers of up to $100,000 from an IRA to qualified charities, and this counts toward the required minimum distribution, while not being counted as income...Click here to read more