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How Financial Frictions Hinder Innovations

A recent study co-authored by Wharton’s Thomas Winberry reveals that financially constrained firms face a ...

The post How Financial Frictions Hinder Innovations first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.

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5 Budgeting Myths That Stop People from Saving

Budgeting is crucial for managing your money well. However, many people avoid it because they ...

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Will a Roth Conversion Help You Save on Taxes?

July 21, 2022

Many people are not aware that traditional individual retirement accounts are set up in ways that incentivize you or your heirs to end up paying the highest tax bill possible. This is why it’s important to have a team of knowledgeable financial professionals around you to talk to you about potential other strategies, such as a Roth conversion.

When you received an upfront tax deduction on the amount you contributed to an IRA and were able to defer the payment of any taxes on growth in the account, this seems like a win-win. However, this is a conditional benefit, meaning that anytime your heirs or you take money out of the account you owe taxes on those withdrawals. It may be years from now that you find out that your tax rate is much higher than it is currently, or that any rules to the accounts could have potentially changed. Bear in mind that some significant rules affecting IRAs have already changed under the Setting Up Every Community for Retirement Enhancement Act of 2017.

You now must begin taking required minimum distributions at age 72 rather than age 70 and a half. The tax cuts for individuals back in 2017 are set to expire in 2025, which means that your taxes could go up in 2026, and if that is the time period when your required minimum distributions kick in, you could end up paying a much higher tax rate. When these changes were made to IRAs, another significant one impacts inherited IRAs.

In the past, beneficiaries who received an IRA through an inheritance could defer paying taxes on those over their lifetime simply by letting the money sit there. However, now your heirs who are not spouses must cash in the account within 10 years of your death. This is why it is extremely important to work with a team of financial professionals to cover all of your bases and ensure you have considered all these important issues.


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Schedule your free Exploratory phone call

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can be of assistance.

Careers/Open Positions

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listings and become a part of an amazing team.

Our Social Media

Connect with us on Social Media using the following buttons:

Visit our Podcasts

Listen in, Join the Conversation!

Recent Posts
How Financial Frictions Hinder Innovations

A recent study co-authored by Wharton’s Thomas Winberry reveals that financially constrained firms face a ...

The post How Financial Frictions Hinder Innovations first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.

See more
5 Budgeting Myths That Stop People from Saving

Budgeting is crucial for managing your money well. However, many people avoid it because they ...

The post 5 Budgeting Myths That Stop People from Saving first appeared on Integrated Tax Planning, Legal Planning & Financial Planning.

See more