Category: Taxes

Inflation impacts Middle-Class Millionaires in a number of ways, not just in a steady rise in the prices of the things we buy every day. One of the most complicated is how the monthly/annual inflation rate influences our interest rates—the rate at which we borrow money.  Really? In May the so-called core consumer price index—basically … Continue reading “Inflation’s Tie to Interest Rates”

If you’re like many small business owners, running your own business is an all-consuming endeavor. In the face of everyday demands, choosing a retirement strategy for your business can become a casualty. The idea of establishing a plan could evoke worries about complicated reporting and administration. If this sounds familiar, then you may want to … Continue reading “Is A SEP-IRA Right For Your Business?”

By May 15, 2023, over 142 million taxpayers had dutifully filed their federal income tax returns. And they all made decisions about deductions and credits – whether or not they realized it. When Middle-Class Millionaires take the time to learn more about how it works, you may be able to put the tax code to … Continue reading “How to Make the Tax Code Work for You”

Most children stop being “and-a-half” somewhere around age 12. Kids add “and-a-half” to make sure everyone knows they’re closer to the next age than the last. When you are older, “and-a-half” birthdays start making a comeback. In fact, starting at age 50, several birthdays and “half-birthdays” are critical for Middle-Class Millionaires to understand because they … Continue reading “Important Birthdays Over 50”

When the Tax Cuts and Jobs Act (TCJA) Act passed in 2017, we were told that all of the provisions—lower tax rates, much more generous estate tax exemption—would sunset at the end of 2025. That seemed a long way off back then.  But now it’s 2024, less than two years before what could be a … Continue reading “Preparing for the Sunset”

The Internal Revenue Service (IRS) has released new limits for certain retirement accounts for the coming year. Individual Retirement Accounts (IRAs) Traditional IRA contribution limits are up $500 in 2024 to $7,000. Catch-up contributions for those over age 50 remain at $1,000, bringing the total limit to $8,000. Remember, once you reach age 73, you … Continue reading “New Retirement Contribution Limits for 2024”

What you think is your tax rate may not actually BE your tax rate. For instance, if you report just over $182,000 in adjusted gross income, the tax table says you’re in the 32% tax bracket. But you aren’t going to be paying anywhere near 32% of your reported income to Uncle Sam. There is … Continue reading “Effective vs. Marginal Tax Rates”

’Tis the season when many financial services professionals look at the best way to offset the taxable dividend distributions their clients might be receiving, using losses that can be ‘harvested’ by selling under-water investments and booking the losses on taxable (that is, not IRA or Roth) accounts. This is not always a trivial exercise; a … Continue reading “The Economics of Tax-Loss Harvesting”

If you donate money to somebody in need, you can write off that gift on your tax returns, right? If only the charitable contribution laws were that simple. The actual rules say that you can itemize your charitable donations on Schedule A of IRS Form 1040.  But (and these are enormous ‘buts’) only if you’re … Continue reading “Charitable Contribution Complexity”

Nobody is talking about the fact that the tax provisions in the Tax Cuts & Jobs Act of 2017 are due to revert back, after December 31, 2025, to what they had been in 2017—just 26 months from now. But if and when that threshold is crossed, it could be a rude awakening for a … Continue reading “The Looming Revert”