I appreciated the HD community’s responses to my November 2024 post regarding the decision to use either Roth or HSA (health savings account) funds to bridge some of my income needs until I receive SS benefits at age 70.  You swayed me first to use my HSA funds. I have several years of medical receipts exceeding the low five-digit account balance, so they will carry me through most of the “bridge” period.
With that decision, I realized that I could also use my HSA funds to leverage a federal Savers tax credit on my 2026 tax return.

The following is from one of the newsletters I used to send to my clients each year. It is not meant to be comprehensive but it may help the organized challenged people (OCP) among us.
Most of you are probably sick of reading this paragraph because I include it every year. If you are one of my organized peeps you can just skip this one.
Two things to do here. First is to look at the left side of last year’s tax folder (that’s where I attached all of their source documents) to get an idea of what you may need this year.

Consider this post on social media.
“Today we are paying our North Carolina real estates taxes, which are significant.  I don’t have a problem with paying my fair share.  This year, I DO have a problem that some of my tax dollars are being doled out to pay for private school vouchers for private schools!  And some of the people getting those vouchers have incomes over $100,000.”
I asked if they were missing part of the equation.

Asking for a friend… Really. My friend has a VERY SIGNIFICANT capital loss carryforward and wondered whether this impacts the typical calculations that go into deciding if Roth conversions make sense. He expects his future tax rate will be lower and his heirs will have higher tax rates.
 
My friend uses his taxable account for investments in equities, hoping to earn capital gains that can be offset by his capital loss carryforward. He intends to invest the Roth money in interest and dividend bearing investments to balance out his portfolio.

Net unrealized appreciation (NUA) is the difference between the cost basis and the current market value of shares of employer stock held in an employer-sponsored retirement account.
If certain criteria are met (death, disability, separation from service, or reaching age 59 ½) an investor can transfer everything in their 401(k) to a rollover IRA—except their employer’s stock. These shares, instead, get deposited into a regular taxable brokerage account.
This triggers an immediate income tax bill on the stock’s cost basis (at income tax rates),

A married couple that are both receiving Social Security will lose the low income advantage to reduce Social Security taxes if they file married filing separately.  The designation creates an 85% tax on most of their Social security income.  Once your income exceeds the point of making SS 85% taxable, there may be advantages to filing separate returns, but not when income is low.
 

In some situations thousands of tax dollars can be saved by using the married filing separate filing status. However, doing so can trigger a larger income-related monthly adjustment amount (IRMAA) to your Medicare premium.
For example, the surcharge for a single taxpayer with modified adjusted gross income of $104,000 is $69.90 per month, while the same for a married taxpayer filing separately is $384.30. In that situation it will most likely be better to file a joint tax return and pay the extra income tax.

If this happens what are your thoughts? Will it change any financial strategy, such as a ROTH conversion? … Maybe something else?

As we rapidly approach the end of the year our thoughts naturally turn to family, friends, holidays gatherings, gifts, traditional foods, decorations, and …. Year-end tax planning.
There are lots of articles that point out the X things you should do at year-end to simplify, optimize, and minimize your taxes. That’s not what this post is about.  In this post I want to highlight one of the best government-led programs I’m aware of – the IRS’ Voluntary Income Tax Assistance,

THE JUNE 16, 2021, edition of The Washington Post carried this headline: “Cristiano Ronaldo snubbed Coca-Cola. The company’s market value fell $4 billion.”
The incident in question had occurred a few days earlier, at a press conference in Budapest, where the soccer star was set to play in a high-profile championship game. Coca-Cola was a sponsor of the tournament, so when Ronaldo sat down at the microphone, he found two bottles of Coke positioned in front of him.

When I read posts on social media, the word “free” pops up all too frequently.
Free health care, free education, free flu shots, free birth control, freedom from taxes is popular too. Is this wishful thinking or a reflection of a serious lack of understanding about how things work?
I look for offers including free shipping, but what if I must spend $200 to receive it? Buy two get one free, but I only need one.

THE TOUGH PART COMES last.
Saving for retirement is pretty straightforward: You sock away as much as you can, favor stock funds, diversify broadly, keep investment costs low and make the most of tax-advantaged retirement accounts. By contrast, paying for retirement can involve mind-boggling complexity—and a big reason is the tax code.
The good news: Once you quit the workforce, you have a fair amount of control over your annual tax bill, especially if you aren’t yet taking required minimum distributions (RMDs) from your traditional retirement accounts,

As a recent retiree who is using my cash reserves to cross my two-year “bridge” to my SS claiming date, I need to decide from which of my tax-free accounts I should withdraw to supplement our living expenses as I move into 2025. I will have used up my taxable account funds by the end of 2024.
Given our household’s low taxable income during this period I have been doing strategic (fill up the tax bracket,

Well, it’s that time of year again. No, I don’t mean the holiday decorations and music in the stores, although it’s certainly that time of year as well. I’m talking about looking at this year’s tax picture and what actions one might take before the year ends.
There are several items that pop to mind for many people – optimizing giving to charity, making gifts to family, contributing to IRAs (consider doing this earlier!), and others.

As we all know, the Social Security trust is being depleted. The most often year mentioned is 2033, but that could change. The reduction in current benefits is projected at 21% – a hefty cut for most people, especially those relying heavily or totally on Social Security income.
Why are we in this mess? Simply because funding of Social Security has been inadequate for many years and for just as long one Congress after another has ignored the trustees pleas to take action sooner rather than later.