Due to an underpublicized break for retirement contributions, certain taxpayers may cut their current tax bill while stockpiling funds for the future. The IRS recently reminded taxpayers of the "retirement saver's credit."
The new budget plan that President Obama will unveil on April 10 includes an unprecedented tax whammy for retirement savers: A new $3 million cap on IRA assets and other tax-preferred retirement accounts.
The other shoe is about to drop for hundreds of thousands of taxpayers who converted from a traditional IRA to a Roth in 2010. And the IRS is likely to catch it. In fact, it has just posted a reminder to 2012 filers.
The IRS is reminding senior citizens of an eleventh-hour reprieve granted by the American Taxpayer Relief Act. Older individuals can still pull off a tax-free, IRA-to-charity transfer of funds, but only if they act by January 31.
"Benjamin Franklin said, 'In this world, nothing could be said to be certain, except death and taxes.' At least with taxes, they keep changing." Thus starts a new YouTube video entitled "Medicare Investment Income Tax."
The IRS has announced various cost-of-living adjustments for 2013. Although inflation has remained on the low side this year, it was still high enough to move the needle on more than two dozen tax code provisions.
The U.S. Treasury and the IRS have proposed a package of regulations and rulings intended to encourage retirees to invest some proceeds of their retirement accounts in annuities. Retirees have shown no interest in this type of investment because they are reluctant to invest their entire retirement account in an annuity.