Latest news with #WoltersKluwerTax&Accounting
Los Angeles Times
25-05-2025
- Business
- Los Angeles Times
The lowdown on inherited IRAs
Dear Liz: I inherited my mother's Roth IRA when she died in 2015 and have been taking yearly required minimum distributions based on my age. My spouse is my primary beneficiary on this inherited Roth IRA. What happens if I pass away before she does? Can she just roll it over into her existing Roth IRA, as is generally permitted for spousal IRA inheritance? Or are there additional limits imposed because it becomes a 'doubly inherited' Roth IRA? Answer: The SECURE Act largely eliminated the so-called stretch IRA that allowed non-spouse beneficiaries to take distributions over their lifetimes. IRAs inherited on or after Jan. 1, 2020, must typically be drained within 10 years. That likely would be the case for your wife. Special rules allow a spouse to treat an inherited IRA as their own, but only when they inherit from the original IRA owner, says Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. There are a few exceptions. Your wife may be able to spread the distributions over her lifetime if she is disabled or chronically ill, for example. If that's not the case, she's back to draining the account within 10 years. Many inherited IRAs require annual distributions. Since this is a Roth IRA, however, the original owner would not have been required to start distributions. Therefore, the spouse of the inherited Roth IRA beneficiary does not have a requirement to distribute annually over the 10-year period but may wait until the end of the 10-year period to do the full distribution, Luscombe says. Dear Liz: I am in my late 50s, married and woefully unprepared financially for my later years. I was a stay-at-home mom for many years. I now work almost full time but my employer has no 401(k) or profit sharing or really any benefits at all. I just started putting $8,000 (the catch-up amount) into my Roth IRA. What else can I do now to make up for lost time? Answer: You can't really make up for the decades of compounded returns you missed by not investing earlier. But you can make some smart decisions now for a more comfortable retirement. Your most important decision likely will be how you and your spouse claim Social Security. Your spouse almost certainly should wait to claim until age 70 to maximize their lifetime benefit and to lock in the highest possible survivor benefit. If you outlive your spouse, this benefit could comprise the bulk of your income. Consider reading 'Get What's Yours,' a book about Social Security claiming strategies by Laurence J. Kotlikoff and Philip Moeller. Just make sure to get the updated version that was published in 2016, since earlier versions refer to strategies that Congress eliminated. Delaying retirement is another powerful way to compensate for a late start, since you'll have more years to work and save. Consider finding an employer who will help you secure your future by providing a 401(k) with a generous match. You'll be able to contribute substantially more to a workplace retirement plan than you would to a Roth. You and your spouse should consider hiring a fee-only financial planner to review your situation and offer customized advice. Dear Liz: You recently responded to an elderly couple who planned to move into assisted living, but were concerned about capital gains taxes on the sale of their home. You suggested an installment sale or renting out the home as possible options. While not for everyone, another possibility is a home loan or a reverse mortgage to cash out tax free. Answer: Reverse mortgages have to be repaid if the borrowers die, sell or permanently move out of their homes. If one of the spouses planned to stay in the home, a reverse mortgage might work, but not if both plan to move to assisted living. A home equity loan or home equity line of credit might be options if the couple have good credit, sufficient income to make the payments and a cooperative lender. A tax pro or a fee-only financial planner could help them assess their options. Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the 'Contact' form at
Yahoo
06-05-2025
- Business
- Yahoo
Do Higher Earnings Mean You'll Take Home Less Because of Taxes?
Many workers worry that earning more, through a raise or bonus, could push them into a higher tax bracket and actually reduce their take-home pay. Learn More: Trump Wants To Eliminate Income Taxes: Here's What That Would Mean for the Economy and Your Wallet Find Out: The New Retirement Problem Boomers Are Facing However, that fear is based on a common misunderstanding of how the U.S. tax system works. Do higher earnings mean you'll take home less because of taxes? Here's what you need to know about how tax brackets impact your take home pay. The Myth Many people believe that earning more money, through a raise or bonus, could actually cause them to lose money after taxes. This widespread misconception stems from confusion about how tax brackets actually apply to income. 'Many people have a misconception or 'fear' of even jumping a tax bracket due to a misunderstanding of how progressive tax systems work,' said Nicolette Davicino, a certified financial planner and financial advisor at Armstrong, Fleming & Moore. For You: Here's How Much Your State Collects on Every Type of Tax Davicino explained, 'Many people think that moving into a higher tax bracket means their entire income will be taxed at that higher rate, which would reduce their pay and mean they take home less pay. In reality, only the portion of income within the higher bracket will be taxed at the new rate.' How U.S. Tax Brackets Really Work The U.S. tax system uses marginal tax rates, which means only the income that falls within each bracket is taxed at that bracket's rate. This ensures that earning more will never reduce the after-tax income. 'To the extent that their taxable income now exceeds $47,150 for 2025, the amount over $47,150 is taxed at the much higher 22% tax rate,' said Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting. 'The rest of the taxpayer's income remains taxed at the lower 10- and 12% tax rates.' Luscombe added that bonuses are often subject to higher withholding, which can make the take-home seem smaller at first. But this doesn't mean individuals are taxed more on all of their income, just on the portion above the bracket threshold. What About Bonuses? A raise or bonus can push a portion of a taxpayer's income into a higher tax bracket, but only that portion is taxed at the new, higher rate. The remainder of their income continues to be taxed at lower rates, so their overall take-home pay still increases. For example, Luscombe said a taxpayer with a modified adjusted gross income of $147,000 who receives a $5,000 bonus in 2025 would not move into a higher tax bracket. However, their total income could exceed eligibility for other tax credits like the Clean Vehicle Credit, which has a $150,000 cap for individuals.
Yahoo
31-03-2025
- Business
- Yahoo
Wolters Kluwer Expert to Speak at Microsoft Fabric Community Conference in Las Vegas
Simon Hjortsberg to share expertise on AI-Driven data analysis at the Microsoft Fabric Community Conference MINNEAPOLIS, March 31, 2025--(BUSINESS WIRE)--Wolters Kluwer Tax & Accounting (TAA), a global leader in professional information, software solutions, and services, today announced that Simon Hjortsberg, the company's Manager of Business Intelligence, will be a speaker at the Microsoft Fabric Community Conference. The anticipated event will take place from March 31 to April 3, 2025, at the MGM Grand Las Vegas. On Monday, March 31, Simon Hjortsberg will participate in a panel-style discussion titled, "Sharing Experiences with Power BI Copilot". This session will focus on learnings and experiences with Power BI Copilot, highlighting how generative AI features are transforming data analysis, generating insights, and creating detailed visualizations and reports in Microsoft Fabric and Power BI. Hjortsberg brings a wealth of knowledge in Data Science, Microsoft Fabric, Data Engineering, and Business Intelligence. He will share his experiences at Wolters Kluwer, with a focus on Power BI Copilot. Participants will gain a better understanding of the innovative solutions and strategies employed by industry leaders. Hjortsberg's insights are key to those seeking to grow their knowledge of advanced BI technologies and applications. Attendees will hear firsthand from a leading professional in the sector. Expert Interview Opportunity Members of the press and professionals alike who are interested in a direct conversation with Hjortsberg are invited to contact Shannon Wherry, Associate Director, External Communications, to arrange interviews. About Wolters Kluwer Wolters Kluwer (EURONEXT: WKL) is a global leader in information, software solutions and services for professionals in healthcare; tax and accounting; financial and corporate compliance; legal and regulatory; corporate performance and ESG. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with technology and services. Wolters Kluwer reported 2024 annual revenues of €5.9 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 21,400 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands. For more information, visit follow us on LinkedIn, Facebook, YouTube and Instagram. View source version on Contacts Media Contact Shannon WherryAssociate Director, External Communications Tax & AccountingWolters KluwerOffice +1 Sign in to access your portfolio
Yahoo
10-03-2025
- Business
- Yahoo
How to handle cash savings of deceased parents
Dear Liz: My mother passed away a little over a year ago, and my father about 18 months prior to her. I discovered that my parents saved up quite a lot of cash (in the six figures), and I'm afraid to deposit it without triggering the IRS. My parents routinely saved anywhere from $5,000 to up to $20,000 per year for the last 30 years. I read my mom's handwriting on the envelopes with the dates. How can I deposit all this without triggering the IRS? Some of the bills are 'vintage' so I will keep them to see if they're worth more than face value. I also thought about using it to buy real estate. Answer: You mention 'triggering the IRS' as if your deposit might set off an explosion of audit notices and tax liens. In reality, you're far more likely to cause yourself grief by trying to avoid IRS notice than you are by simply depositing the money. Banks report large cash deposits — typically those of $10,000 or more — to the IRS as a way to combat money laundering. Anti-money-laundering rules also have been extended to real estate deals. Banks are looking for smaller deposits that could add up to more than $10,000, so don't think spreading out the deposits will help you avoid scrutiny. 'Depositing the money all at once would probably arouse less suspicion with the bank than making a continuing series of deposits just under $10,000,' says Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. Luscombe suggests retaining all those envelopes with your mother's handwriting. If you are questioned by your bank or the IRS, the envelopes could help show your parents were gradually saving the money over time rather than engaging in some money-raising scheme on which taxes were never paid. You didn't mention if your parents had wills or other estate documents, or if there are other beneficiaries. Consult with an estate planning attorney to see if the cash needs to be deposited in the name of your mother's estate. Jennifer Sawday, an estate planning attorney in Long Beach, Calif., recommends going in person to your bank to ask for an appointment to make a large cash deposit. Ideally, you can discuss the situation and disclose the source of the funds in a private office, where you can't be overheard. Ask if the bank can hire an armored courier to pick you up at your home to reduce the chance you'll be robbed en route, Sawday suggests. Please don't delay, since theft isn't the only concern. Cash also can be lost to fire, floods and other disasters. (One can only imagine how many bank-averse people lost cash in the recent Los Angeles fires.) Plus, cash tends to lose value over time thanks to inflation–the vast majority of 'vintage' bills are worth much less than when they were printed. You'll want to at least start earning some interest on the money, and perhaps put it to work in other investments. Dear Liz: Your recent column on the divorced couple where the ex-wife can apply for Social Security benefits has me wondering about my own benefits. I'm 60 and my husband is 79. Can I get his Social Security benefits, and if so, when should I apply? I am working and have worked all my adult life. He has an ex and was married to her for 11 years, so she is getting his and he is getting his. Do I qualify for his and also my own? Answer: To repeat, Social Security is typically 'either/or,' not 'both.' When you apply for Social Security, your own retirement benefit will be compared with a spousal benefit based on your husband's earnings record. You'll get the larger of the two benefits. The spousal benefit can be up to 50% of your husband's benefit at his full retirement age, not the amount he's currently getting. You can apply as early as age 62, but that means accepting a permanently reduced benefit. Also, early benefits will be subject to the earnings test, which withholds $1 for every $2 earned over a certain limit, which in 2025 is $23,400. You won't face the earnings test if you apply after reaching your full retirement age, which is 67. If you delay filing, your own benefit will continue to grow. It maxes out at age 70. Figuring out the best time to apply can be complicated. AARP has a free calculator that may help, or you can use the more sophisticated paid versions at Maximize My Social Security. Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the "Contact" form at Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights. This story originally appeared in Los Angeles Times. Sign in to access your portfolio
Los Angeles Times
09-03-2025
- Business
- Los Angeles Times
How to handle cash savings of deceased parents
Dear Liz: My mother passed away a little over a year ago, and my father about 18 months prior to her. I discovered that my parents saved up quite a lot of cash (in the six figures), and I'm afraid to deposit it without triggering the IRS. My parents routinely saved anywhere from $5,000 to up to $20,000 per year for the last 30 years. I read my mom's handwriting on the envelopes with the dates. How can I deposit all this without triggering the IRS? Some of the bills are 'vintage' so I will keep them to see if they're worth more than face value. I also thought about using it to buy real estate. Answer: You mention 'triggering the IRS' as if your deposit might set off an explosion of audit notices and tax liens. In reality, you're far more likely to cause yourself grief by trying to avoid IRS notice than you are by simply depositing the money. Banks report large cash deposits — typically those of $10,000 or more — to the IRS as a way to combat money laundering. Anti-money-laundering rules also have been extended to real estate deals. Banks are looking for smaller deposits that could add up to more than $10,000, so don't think spreading out the deposits will help you avoid scrutiny. 'Depositing the money all at once would probably arouse less suspicion with the bank than making a continuing series of deposits just under $10,000,' says Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting. Luscombe suggests retaining all those envelopes with your mother's handwriting. If you are questioned by your bank or the IRS, the envelopes could help show your parents were gradually saving the money over time rather than engaging in some money-raising scheme on which taxes were never paid. You didn't mention if your parents had wills or other estate documents, or if there are other beneficiaries. Consult with an estate planning attorney to see if the cash needs to be deposited in the name of your mother's estate. Jennifer Sawday, an estate planning attorney in Long Beach, Calif., recommends going in person to your bank to ask for an appointment to make a large cash deposit. Ideally, you can discuss the situation and disclose the source of the funds in a private office, where you can't be overheard. Ask if the bank can hire an armored courier to pick you up at your home to reduce the chance you'll be robbed en route, Sawday suggests. Please don't delay, since theft isn't the only concern. Cash also can be lost to fire, floods and other disasters. (One can only imagine how many bank-averse people lost cash in the recent Los Angeles fires.) Plus, cash tends to lose value over time thanks to inflation–the vast majority of 'vintage' bills are worth much less than when they were printed. You'll want to at least start earning some interest on the money, and perhaps put it to work in other investments. Dear Liz: Your recent column on the divorced couple where the ex-wife can apply for Social Security benefits has me wondering about my own benefits. I'm 60 and my husband is 79. Can I get his Social Security benefits, and if so, when should I apply? I am working and have worked all my adult life. He has an ex and was married to her for 11 years, so she is getting his and he is getting his. Do I qualify for his and also my own? Answer: To repeat, Social Security is typically 'either/or,' not 'both.' When you apply for Social Security, your own retirement benefit will be compared with a spousal benefit based on your husband's earnings record. You'll get the larger of the two benefits. The spousal benefit can be up to 50% of your husband's benefit at his full retirement age, not the amount he's currently getting. You can apply as early as age 62, but that means accepting a permanently reduced benefit. Also, early benefits will be subject to the earnings test, which withholds $1 for every $2 earned over a certain limit, which in 2025 is $23,400. You won't face the earnings test if you apply after reaching your full retirement age, which is 67. If you delay filing, your own benefit will continue to grow. It maxes out at age 70. Figuring out the best time to apply can be complicated. AARP has a free calculator that may help, or you can use the more sophisticated paid versions at Maximize My Social Security. Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the 'Contact' form at
