In recent years, tax policy has tended to change depending on which political party held the reins in Washington, D.C. These swings mean you need to review your estate plan regularly. At a minimum, every few years. (It’s a good idea to do that regardless of tax laws, in case there are changes in your assets, beneficiaries, or other circumstances.)
With all of the tax documents continuing to arrive in the mail, we are all painfully aware that it is currently tax season. If you are an Executor of an Estate or the Trustee of a Trust that is or has become irrevocable, you should know that Estates and Trusts have to file their income tax returns. When you qualified as an Executor or took over as Trustee, you probably applied for a tax identification number for the Estate or Trust. That number is how the IRS knows to be look for the reporting of income and the payment of taxes.
New Year… New Will?
Many people make New Year’s resolutions. If one of your resolutions was to make sure your affairs and finances are in order, then you are going to need to review your estate plan – or create one. How do you know if it needs to be changed or updated, or whether you even need one in the first place? Below are a few scenarios that you may want to consider.
Employee contribution limits will remain unchanged next year. The IRS isn’t increasing employee contribution limits for 401(k)s or flexible spending accounts for 2021.
Limits will remain the same with employees being able to defer up to $19,500 into a 401(k), 403(b) and most 457 plans at work. The limits also remain the same for employee catch-up contributions for those 50 and older, at $6,500. Last year saw a $500 jump in the overall employee contribution limit for 2020 plus a $500 rise in the catch-up limit.
For 2021, the dollar limit for employee contributions to flexible spending accounts, made pretax through salary reductions, remains unchanged at $2,750. However, for health FSA plans that permit the carryover of unused amounts, the maximum carryover amount for 2021 is $550, an increase of $50 from the original 2020 carryover limit.
Making smart decisions in times of panic may not be easy, but for those who can keep a cool head and follow a plan, there are some calculated steps you can take towards growing your wealth despite the situation. Now, and for generations to come.
The headlines over the past months have been riddled with two serious threats to the health and well-being of people across the U.S. The first and obvious threat is the novel coronavirus (COVID-19) outbreak. The other obvious danger is the stock market, which entered bear market territory for the first time in 11 years.
If your financial situation has hit a rough spot, there are several things you can do to get your retirement plan moving in the right direction again.
Does it feel like the coronavirus pandemic has pushed all your retirement plans by the wayside? If you recently lost your job or had a reduction in income, you may not be thinking about your long-term future and retirement plans. You may only be focused on surviving from one day to the next.
Regardless of your current situation, all is lost when it comes to retirement planning.
You can get things moving in the right direction again. While there are no easy answers or quick fixes in these uncertain times, there are a few ways you can shore up your retirement plan and get it back on track. Here are some things to consider.