Do you have a hobby that actually makes you some money? Crafting and selling jewelry or pottery for example? Or blogging about travel? Perhaps you help friends breed dogs. Did you know that hobby income is taxable (it should be reported on Form 1040 Schedule 1)? And before 2018 any expenses associated with a hobby…
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Probably most everyone is familiar with a company 401(k) retirement savings plan. Employees age 50 or older can defer up to $26,000 of their salary in 2021. The employer can additionally add contributions based on a matching formula or some percentage of company profits. In the majority of plans today employees can even choose to…
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In this blog I’m focusing on your options with your spouse’s IRA if he or she predeceases you. (For simplicity I will use the pronoun “they” to avoid having to use the more wordy “he or she”). After your spouse passes away the IRS will require you to start filing as single rather than as…
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I have written many times about the value of keeping one’s investment portfolio well-diversified across numerous investment asset classes. But diversifying your portfolio with respect to income taxes can also be a valuable way of maximizing the wealth you get to keep and pass on to your heirs. Here’s a high-level explanation of how it…
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California’s Prop 19, which narrowly passed last week, was promoted primarily as a way to help disaster victims avoid potentially steep property tax increases after being forced to move. However, it also includes a very complicated change to two current benefits, one involving the transfer of ownership from parents to children, and the other associated…
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This may seem like an unusual year to be talking about required minimum distributions (RMDs) since Congress has temporarily eliminated them in 2020 due to the COVID-19 pandemic. But they haven’t gone away. After all, the government does need to collect the taxes they allowed you to defer throughout your working years. If you’re a…
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