Charitable Contributions from IRAs
When planning your IRA withdrawal strategy, you may want to consider supporting a favorite charity with tax-free contributions from your IRA. These contributions are known as qualified charitable distributions (QCDs) or charitable IRA rollovers.
How QCDs Work
You must be 70½ or older in order to make QCDs. You direct your IRA trustee to make a distribution directly from your IRA (other than SEP and SIMPLE IRAs) to a qualified charity. The distribution must be one that would otherwise be taxable to you.
You can exclude up to $100,000 of QCDs from your gross income in 2018. If you file a joint return, your spouse can exclude an additional $100,000 of QCDs in 2018.
Don’t Let Emotions Swing with the Markets
It’s no secret that investing is an emotional process. Markets swing and news organizations take full advantage to pump their ratings and incite fear, oftentimes without fully understanding the economy or how markets work.
Even veteran investors can act impulsively and lose perspective when markets correct or become volatile.
All of this said, volatility is normal.
That’s why it’s essential for all of us to consider the big picture during periods of market stress. If you’re contemplating a change to your portfolio, there are two important questions you should ask: have my goals changed? and has my time horizon changed?
What are catch-up contributions?
If you are 50 or older, or you will reach age 50 by the end of the year, you may be able to make contributions to your IRA or employer-sponsored retirement plan above the normal contribution limit. Catch-up contributions are designed to help you make up any retirement savings shortfall by bumping up the amount you can save in the years leading up to retirement.
Catch-up contributions can be made to traditional and Roth IRAs, as well as to 401(k) plans and certain other employer-sponsored retirement plans. But if you participate in an employer-sponsored retirement plan, check plan rules – not all plans allow catch-up contributions.
How much can you contribute as a catch-up contribution? It depends on the type of retirement plan you have and the tax year for which you are making the contribution.
Are 529 college savings plans a good way to save for college?
Yes, they can be an excellent way to save for college. College savings plans are established by states and typically managed by an experienced financial institution designated by the state. Each plan has slightly different features. A 529 college savings plan lets you save money for college in an individual investment account that offers federal […]
Caring for Your Aging Parents
Caring for your aging parents is something you hope you can handle when the time comes, but something you probably hope you never have to do. Caring for your aging parents means helping them plan for the future, and this can be overwhelming, both physically and emotionally. When the time comes for you to take […]
Giving to Charities in 2018
“I am not going to give to charity in 2018 because I can no longer receive a tax deduction for my gift.” This was the comment shared while I discussed the new 2018 tax laws with a development officer colleague who works at one of our great local nonprofit organizations. Wanting clarification, I asked more […]
IRA and Retirement Plan Limits for 2018
The maximum amount you can contribute to a traditional IRA or a Roth IRA in 2018 is $5,500 (or 100 percent of your earned income, if less), unchanged from 2017. The maximum catch-up contribution for those age 50 or older remains at $1,000. You can contribute to both a traditional IRA and a Roth IRA in 2018, but your total contributions can’t exceed these annual limits.
Will I have to pay tax on my investment income?
Answer: The taxation of your investment income depends on several factors, including the type of investment income you have (e.g., tax exempt, ordinary, capital gain, or tax deferred). If you have municipal bonds, the interest they generate is typically exempt from federal taxation and state taxation in the state the bonds are issued. The interest […]
Tax Moves to Review Before Ringing in the New Year
Here are 10 things to consider as you weigh potential tax moves between now and the end of the year. 1. Reserve time to plan. Effective planning requires that you have a good understanding of your current tax situation, as well as a reasonable estimate of how your circumstances might change next year. There’s a […]
More Than a Trust Company
Before I joined Heartland Trust Company, I knew about its great reputation in our community and throughout the region. I admired this award-winning organization and its dedicated people, but like many others, I also thought the company only managed trusts. After all, the name is Heartland TRUST Company. That said, managing trusts is only one […]
