Erickson Tribune

Sedgebrook

UPDATED: Thursday, April 05, 2007

Common tax pitfalls in retirement

Posted on Sunday, April 01, 2007
 

Spring has finally arrived. The birds are chirping, flowers are blooming, temperatures are rising—and, unfortunately, April 15 is fast approaching.

Filing income tax returns is rarely a pleasurable experience, and as you enter into retirement, you may find yourself facing a new financial landscape. But with the right tools and information, you can avoid common pitfalls, and make the most of your hard-earned assets.

Mark Luscomb is the principal analyst for the tax and accounting group at CCH, a nationwide firm that offers tax and accounting services and research. Luscomb says the tax code changes every year, and there may be new rules that could help you save money.

· Go high-tech: There are many easy-to-use tax preparation software programs that can help you take advantage of changes to the tax code. “Tax software asks questions that are relevant to new developments and can direct you to the new information that can help you get some tax breaks,” Luscomb says.

· Make your gifts count: You can give up to $24,000 a year (for a married couple filing jointly) without triggering a gift tax. So the money that you give to your children for a new home or to your grandchildren for college also provides a benefit for you at tax time. What’s more, the $24,000 annual gift does not count against the $1 million lifetime tax gift tax exemption.

· Give it away: Midway through your 70th year, you are required to begin taking distributions from IRAs, which will increase your adjusted gross income, possibly making you ineligible for certain deductions. To sidestep this penalty, you can donate up to $100,000 annually to charity directly from your IRA.

· Sell your house: When you make a profit from the sale of a home, you owe taxes on the capital gain. But as long as that house was your primary residence for two of the last five years, $500,000 is safeguarded from taxation (for married couples filing jointly).


Sedgebrook
More Sedgebrook

Read or Add a Comment?

A call to end Erie Pa.'s relationship with "sister city" Zibo, China, and all Chinese imports.

No URL for Riderwood Blog

Laughter Yoga

Happy hour hot spots?

Model yacht clubs

Your thoughts on Reflexology

Tools

Write a Comment on Story

Print

Email Story

Add to Favorites

· Say goodbye to property taxes: If you purchased your home many years ago, chances are high your property taxes have climbed steadily with neighborhood development. In many cases, tax increases outpace your home’s rate of appreciation. That’s why many people are making the choice to move to retirement communities like Sedgebrook—where the home is yours, but the property tax bills are not.

Good financial planning is the key to making the most of your retirement. In each issue, we examine a different economic topic and offer strategies to help you make informed decisions about your money.

Living at Sedgebrook makes solid financial sense for many people entering retirement. If you would like to learn more about all of the reasons that moving to Sedgebrook adds up to a smart financial decision, contact retirement counselor Tracy Dellaria at 1-800-617-6610 to schedule an appointment.



 Other Community News

    

'); } -->
Click Here to Order Now!