Taxes

“The window to make advantaged Roth IRA conversions closes in 2028” was the hook my friend Sherry got from the salesman at the free steak dinner. Scheduling an appointment with him was Sherry being reeled in.  Sherry asked if I would go with her to a meeting with the guy to discuss the proposal.
The  first thing I had to do was figure out what an “advantaged Roth conversion” even was. Feel free to correct me if I am wrong,

The U.S. tax system only taxes realized income—meaning money from a paycheck, a dividend payment, or the actual sale of an asset. If a billionaire owns $100 billion in stock and that stock grows by $10 billion in a year, they do not owe a single dime of income tax on that $10 billion increase until they sell the shares.
And neither does anyone else. I don’t pay on the growth in my IRA or any investment.

I mentioned this in a recent HD comment, but I think it deserves more discussion.
It’s time to scrap all tax-advantaged defined contribution retirement plans and replace them with one plan, one set of rules, uniform limits. No IRAs of any kind, no 403b,  no 401k, no nothing else.
Just a Universal Retirement Plan- Individual or employer sponsored. All contributions on an after-tax basis and tax and distribution rules following the Roth model. Everyone could contribute up to one (generous) limit. 

A friend shared an interesting idea from David Bach’s “IRA Flat Tax” proposal, and it got me to thinking.
Here is the white paper if you haven’t read it:
IRA Flat Tax White Paper – David Bach.pdf – Google Drive
The basic idea is simple: for a limited window, maybe 2026–2033, retirees could voluntarily withdraw money from traditional IRAs, 401(k)s, and similar retirement accounts at a flat federal tax rate — possibly around 12%.
The goal would be to make it easier for retirees to use the money they spent decades saving,

My opinion is that there is no such thing as a tax loophole. Plus it has a negative connotation I don’t think is accurate. In addition, there is a tendency to apply the word to others – mostly the wealthy, but not ourselves
Look up the word and you likely see something like “ A tax loophole is a provision, ambiguity, or gap in tax law that allows a person or business to legally reduce the amount of taxes they owe — often in ways lawmakers may not have originally intended.”
Long term gains are taxed at lower rates to make investing attractive.

I recently completed my 8th season performing volunteer tax returns. I’ve worked in 2 states (Pa and NJ), 3 counties, and 7 centers. All but one year was performed under the auspices of the AARP TaxAide program. In several years I also worked for a local program supporting the Division of Aging and Disability in Cape May County, NJ.
This year’s location was at a local library in Monmouth County, NJ. The center was open 3 days a week.

My understanding is that IRMAA is not permanent. It follows the two-year lookback. A friend and I were discussing the possible sale of his rental property, and that raised the question of what happens if a one-time capital gain pushes someone into a higher Medicare premium bracket.
From what I understand, if someone sells a rental property and has a one-time income spike, that higher income may show up in Medicare premiums two years later, but it should eventually fall back down once a lower-income year becomes the lookback year.

The IRS still has not processed my mother’s 2024 amended tax return, which they received May 2, 2025.  In a few days, they will have had her return a full year.
My mother submitted her 2024 Form 1040 prior to April 15, 2025.  It said she owed money, so she paid it.  We subsequently found some additional information.  She filed an amended return April 30, 2025.  According to that return, she is due a refund of $2,161. 

Good Lord, I just turned to AI for a few fun facts. It answered by asking me if my question was in reference to the piece I submitted to HumbleDollar today. While I find that a bit creepy, it gave me an interesting factoid. Here it is, word for word:
The “Hidden Surcharge” Fact: > Most people think the highest marginal tax rate in the U.S. is 37%. However, when you factor in the MAGI “cliff”

It was the first time that Ron’s tax return had a balance due, and he kind of freaked out. On the recommendation of the advisor at his bank, Ron purchased municipal bonds because they were tax exempt. He was shocked to learn that his Social Security benefit became partially taxable. I explained that tax free muni interest was added in with other sources of income to determine if any Social Security income would become taxable. He immediately called his bank person,

According to the 2025 Trustee Report, the actuarial deficit for the combined Social Security trust funds under the intermediate assumptions is 3.82 percent of taxable payroll for the 75-year period 2025-99.
We could discuss endlessly how and why we got to this point, but I hope we can agree there is no excuse having had thirty plus years to deal with a coming crisis.
I have a suggestion to get on the right track- take a concept from private pensions.

This was my third season as an AARP volunteer tax aide…and my third post about my experiences. I volunteer two days a week from February 1 to tax day at two different senior centers which draw from different socioeconomic strata: one is definitely middle class; the other has many clients living on very little.
I began the season wondering how the Big Beautiful Bill would impact our clients. Since most are over 65, I expected the new $6000 senior deduction to have a big,

We have reached a point now we don’t need to use either free or paid tools or calculators for things like, figure when to claim social security, we have converted all our t-IRA accounts, so no RMD, nor NIIT, nor IRMAA. We have also done our estate planning and a letter of instruction, etc. We did very well with our budgeting with our spreadsheets.  All that is left to figure out annually are our annual retirement cash flow/income,

TAX EFFICIENT FUND placement is an often underrated topic. The goal of the tax efficient fund placement is to minimize taxes within your investments, and select the right account for those investments.

But how much does that actually matter?

Vanguard’s research finds that a thoughtful asset location strategy can add significantly more value than an equal location strategy. The value added typically ranges from 5 to 30 basis points of after-tax return, depending on circumstances (e.g.,

IF YOU HAVE a Money Market Fund (e.g. VUSXX, VMFXX), Treasury fund (e.g. SGOV), or any other Treasury ETF (e.g. VBIL), you need to know how to report it on your taxes correctly. If you don’t, you are overpaying on your state taxes unknowingly. 
How and why?
These funds hold U.S. Treasury Bills. Treasuries are exempt from state and local taxes. Of course, this only matters if you hold these funds in a taxable brokerage account,