Ed Slott

Tax Season Tips with Ed Slott

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With tax season in full swing, it can only mean one thing. It’s time for our annual chat with Ed Slott, the ultimate tax guru, and founder of IRA Help.

Here is your tax season boot camp for the first tax year of the Tax Cuts and Jobs Act (TCJA).

Itemized vs. Standard Deduction: Every taxpayer needs to determine whether it makes sense to claim one of these two deductions, both of which reduce the amount of income subject to tax. TCJA nearly doubled the Standard Deduction to $12,000 for Single and Married Filing Separately, $24,000 for Married Filing Jointly and $18,000 for Head of Household.

A couple of caveats on itemized deductions:

Your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if Married Filing Separate). Any state and local taxes you paid above this amount cannot be deducted.

The deduction for home mortgage and home equity interest was modified. It is now limited to interest you paid on a loan secured by your main home or second home that you used to buy, build, or substantially improve your main home or second home. So if you used a home equity loan or line of credit to pay off another debt, like a credit card or student loan, it would not be deductible.

There is a new dollar limit on total qualified residence loan balances. If your loan was originated or treated as originating on or before Dec. 15, 2017, you may deduct interest on up to $1,000,000 ($500,000 if you are married filing separately) in qualifying debt. If your loan originated after that date, you may only deduct interest on up to $750,000 ($375,000 if you are married filing separately) in qualifying debt.

Deduction for alimony is eliminated for agreements executed after December 31, 2018, or for any divorce or separation agreement executed on or before December 31, 2018, and modified after that date. In conjunction with this change, alimony and separate maintenance payments are no longer included in income based on these dates.

Claim Credits: Now that personal exemptions have been eliminated, credits are even more important.

The Child Tax Credit has increased to a maximum of $2,000 per qualifying child under the age of 17. Up to $1,400 of the credit can be refundable for each qualifying child as the additional child tax credit. In addition, the income threshold at which the child tax credit begins to phase out increased to $200,000, or $400,000 if married filing jointly.

There are two different education credits available: the American Opportunity Tax Credit (formerly Hope Credit), which is partially refundable, and the Lifetime Learning Credit. Both may apply to expenses you pay for yourself, your spouse and any dependents.Have a money question?

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Tax Season Tips + Can I Retire?

The PS reminder continues: If you enjoy the radio show, please subscribe to our podcast, Better Off.  It's very similar to the radio show and you'll hear more money calls with our awesome listeners.

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First up this week is Bruce from Illinois with a great question! "If money buys you freedom and options, when can you walk away from what you have to do and start doing what you want to do?" Not an easy one to digest so we kept Bruce around for two segments.

We rounded out the hour by continuing to chip away at the email inbox.

With tax season in full swing, it’s time for some much needed tax tips, dos and don’ts, and sage advice about IRAs and backdoor conversions.

As crazy as this might sound, you may want to enjoy this tax year while it lasts, because come next year, it’s going to get a whole lot crazier with all the changes to the tax code.

To help us make sense of it all we're joined by the Ed Slott, the ultimate tax guru, and founder of IRA Help.

While almost all of the changes go into effect next tax season, one big change occurs this year. If you itemize deductions on Form 1040, Schedule A, the new law allows you to deduct qualified medical and dental expenses that exceed 7.5 percent of your adjusted gross income (AGI) – that’s a lower threshold than the previous 10 percent. (The level returns to 10 percent beginning January 1, 2019.)

Medical care expenses is a big category and you should check out the IRS list, because it includes payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners, as well as insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy.

With new withholding tables in effect, the amount may not be enough to cover a lot of taxpayers, especially those in high tax states who could lose certain deductions. To be safe, at least for the first year of the new law, you may want to assume that your tax liability will be at least the same as this year. To avoid a penalty, you can pay 100 percent of your income tax liability from 2017 or 110 percent if you earn more than $150,000.

To get a better sense of your situation, be sure to check out the revised IRS withholding tax calculator on IRS.gov.

And oh yeah, once again, due to a Washington DC holiday (Emancipation Day), the filing deadline is delayed. Procrastinators, mark April 17th, rather than April 15th as your drop-dead date.

Have a finance related question? Email us here or call 855-411-JILL.

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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

Tax Season Tips with Ed Slott

With tax season in full swing, it’s time for some much needed tax tips, dos and don’ts, and sage advice about IRAs and backdoor conversions.

As crazy as this might sound, you may want to enjoy this tax year while it lasts, because come next year, it’s going to get a whole lot crazier with all the changes to the tax code.

To help us make sense of it all we're joined by the Ed Slott, the ultimate tax guru, and founder of IRA Help.

While almost all of the changes go into effect next tax season, one big change occurs this year. If you itemize deductions on Form 1040, Schedule A, the new law allows you to deduct qualified medical and dental expenses that exceed 7.5 percent of your adjusted gross income (AGI) – that’s a lower threshold than the previous 10 percent. (The level returns to 10 percent beginning January 1, 2019.)

Medical care expenses is a big category and you should check out the IRS list, because it includes payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners, as well as insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy.

With new withholding tables in effect, the amount may not be enough to cover a lot of taxpayers, especially those in high tax states who could lose certain deductions. To be safe, at least for the first year of the new law, you may want to assume that your tax liability will be at least the same as this year. To avoid a penalty, you can pay 100 percent of your income tax liability from 2017 or 110 percent if you earn more than $150,000.

To get a better sense of your situation, be sure to check out the revised IRS withholding tax calculator on IRS.gov.

And oh yeah, once again, due to a Washington DC holiday (Emancipation Day), the filing deadline is delayed. Procrastinators, mark April 17th, rather than April 15th as your drop-dead date.

“Better Off” is sponsored by Betterment.

Have a finance related question? Email us here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

https://www.instagram.com/jillonmoney/

https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

http://betteroffpodcast.com/

https://itunes.apple.com/us/podcast/b...

"Better Off" theme music is by Joel Goodman, www.joelgoodman.com.

Tax Season Tips with Ed Slott

Tax season is upon us. Here's a quick handful of tips with IRA expert and CPA, Ed Slott.

Subscribe to the Better Off podcast right now, because in a couple weeks there's going to be a whole lot more with Ed.

IRA, HSA, backdoor conversions, tax brackets, health care, standard deduction vs itemized...everything you need to know about tax season and the best way for you to file.

Have a finance related question? Email us here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

https://www.instagram.com/jillonmoney/

https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

http://betteroffpodcast.com/

https://itunes.apple.com/us/podcast/b...

#261 Tax Prep Boot Camp with Ed Slott

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Ed Slott CPA is a nationally recognized IRA expert, television personality and best-selling author who has dedicated his life to educating Americans on saving for retirement and the intricacies of IRAs.  He was named “The Best Source for IRA Advice” by The Wall Street Journal and is the author of numerous best-selling books. His web site www.IRAHelp.com. He started our conversation with an overview of what has changed for this year's tax filing season (not too much) and then explained why well-prepared taxpayers should not be afraid of an audit. (NOTE: Ed says that the key to the entire  tax preparation process is to keep flawless records and documentation throughout the year!)

  • Download the podcast on iTunes
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Ed also focused on the need for retirees to shift gears in retirement. While there may be some lucrative opportunities, there are also challenges/minefields, like those thorny stealth taxes, which can trip us up.

The old favorites include the whopping 50 percent penalty for not taking your required minimum distribution (RMD) and not making estimated tax payments, but last year's change about IRA rollovers is also causing a new headache among some retirees.

As much as everyone complains about paying taxes, Ed says that tax rates are still the lowest they have been in years. That means that now could be a good time to move funds from tax-deferred vehicles, like 401 (k)s and IRAs into tax free Roth IRAs. Ed also noted that the very best retirement strategy is to work as long as you can. Extra income can prevent you from dipping into your nest egg; with earned income, you can continue to make Roth and spousal Roth IRA contributions (though once you turn 70 1/2, you can NOT make traditional IRA contributions); you may be able to delay your RMDs from your company-sponsored retirement plan; and most importantly, working longer will help you combat the reality of longevity!

Thanks to everyone who participated this week, especially Mark, the Best Producer in the World and the worst LinkedIn User. Here's how to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE 

#248 Year End Money Moves with Ed Slott

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Ed Slott, CPA is a nationally recognized IRA expert, television personality and best-selling author who has dedicated his life to educating Americans on saving for retirement and the intricacies of IRAs.  He was named “The Best Source for IRA Advice” by The Wall Street Journal and is the author of numerous best-selling books, which is why we are so happy he joined the show to help you make smart, year-end money moves.

  • Download the podcast on iTunes
  • Download the podcast on feedburner
  • Download this week's show (MP3)

 Ed covered a lot of ground, including a great rule of thumb about filing for Social Security: "The longer you wait, the more you get!" Here's a quick list of things to remember to maximize the remaining days of 2015:

  • Make your 2015 Roth IRA conversion and consider a back door conversion, if you earn too much money to qualify for a contribution
  • Check the taxes on stock or mutual fund sales; use losses to offset gains
  • Max out your retirement accounts (yes, there's still time to get to $18,000 or $24,000 if you are over age 50)
  • Take Required Minimum Distributions: RMDs must start in the year you turn 70 1/2 or the year. Fail to do so and the amount you should have withdrawn will be taxed at 50 percent!
  • Donate your IRA distributions to charity: Although this is still in limbo, Ed recommends that you take advantage of it and assume that Congress will once again make it part of an extender package
  • Check / Update Beneficiary Forms
  • Bunch your deductions and if you are self-employed, project your 2016 income. If it will be higher than 2015, consider deferring income and expenses until next year, when you are in a higher tax bracket
  • Be aware of stealth taxes

Check out Ed's web site www.IRAHelp.com for more information!

Thanks to everyone who participated this week, especially Mark, the Best Producer in the World. Here's how to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE 

#206 Valentine's Day with IRA Expert Ed Slott

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Retirement guru Ed Slott returns to the program to offer great advice during the hectic tax prep season: ABC or Always Be Contributing (to retirement!) While he favors a Roth over a traditional IRA, he just wants you to put yourself first in order to navigate this YOYO (You're On Your Own) environment.

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  • Download this week's show (MP3)

Ed also provided analysis of President Obama's budget and its implications for owners of Roth IRA accounts; potential changes to contribution rules that could allow some taxpayers to make after-tax contributions (aka the "Mega-Backdoor-Roth"); and why we all need to be prepared for stealth tax increases in the future.

For more great information, check out Ed's website: IRAHelp.com.

Chuck from MD and his wife are planning to retire in a few years and wanted a strategy for downsizing; Marie asked about taking her Required Minimum Distribution -- here's the FINRA RMD calculator that I mentioned; and Charles asked whether he should sell a large position in a single stock.

"A Proud Grandmother" inquired about the best graduation gift and Remy is considering the best way to help out parents' in need.

Happy Valentine's Day! To celebrate, here a fun CBS This Morning segment: How to Talk to your Spouse about Money!

Thanks to everyone who participated and to Mark, the BEST producer in the world. If you have a financial question, there are lots of ways to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE 

#194 Year-End Retirement Planning with Ed Slott

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What a treat to have retirement plan expert Ed Slott CPA join the show to help make smart year-end financial decisions! Ed is a nationally recognized IRA expert, television personality and best-selling author who has dedicated his life to educating Americans on saving for retirement and the intricacies of IRAs.

  • Download the podcast on iTunes
  • Download the podcast on feedburner
  • Download this week's show (MP3)

Among his many pearls of wisdom, delivered with his awesome Long island accent, Ed reminded us to do the following before the clock strikes midnight on December 31, 2014:

  • Make your 2014 Roth IRA conversion
  • Be aware of new IRA rollover rules
  • Max out your retirement accounts
  • Take Required Minimum Distributions
  • Check / Update Beneficiary Forms
  • Be aware of stealth taxes
  • Consider donating your IRA distributions to charity
  • Use Your Gifting Limits

In the first hour of the show, we had a terrific call from Mike in Texas, Sharon in CT and Mike in Maryland, all of whom needed guidance on financial advisors.

Thanks to everyone who participated and to Mark, the BEST producer in the world. Check out Mark's first-producing credit for this CBS Evening News segment that aired recently. If you have a financial question, there are lots of ways to contact us:
  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE