Quick Answer There is not just one Roth IRA five-year rule. One five-year period helps determine whether Roth IRA earnings can be part of a qualified distribution. A separate five-year period applies to each Roth conversion or certain rollover contributions when determining whether an early distribution could trigger the 10% additional tax. Confusing these two clocks is one of the easiest ways...
Quick Answer Buy Now, Pay Later, or BNPL, is a form of consumer credit that allows a purchase to be split into installments. A common structure is “pay in four”: an initial payment at checkout followed by three additional payments, often at two-week intervals over roughly six weeks. The smaller individual payments can be convenient—but they can also make the total purchase easier to...
Quick Answer A Health Savings Account can provide several federal tax advantages: eligible contributions may receive favorable tax treatment, earnings generally are not included in federal income while held in the account, and distributions used for qualified medical expenses can be tax-free. Those benefits, however, depend on following the HSA rules. Here are several mistakes that can reduce...
The average new vehicle now sells for about $50,000, and the average new-car loan runs 6.35% over nearly six years — a payment of $765 a month (Kelley Blue Book, Experian). Prices, rates, and loan terms all moved the wrong way at once, and for a lot of households cars have simply become unaffordable. One small offset: a new federal deduction lets some buyers write off up to $10,000 a year of car...
Quick Answer Many taxable distributions from IRAs and employer retirement plans taken before age 59½ can be subject to a 10% additional federal tax unless an exception applies. The rules differ by account type, and some distributions that escape the additional 10% tax are still taxable as ordinary income. The word “exception” is therefore important: avoiding the additional tax does not...
Quick Answer For most people becoming eligible for Medicare at age 65, the Initial Enrollment Period is a seven-month window beginning three months before the month they turn 65 and ending three months after that month. People covered through current employment may have additional options, but employer size, the source of coverage, COBRA, and HSA contributions can materially affect the decision....
Quick Answer Investment losses are never the goal, but a loss in a taxable investment account may create a tax-planning opportunity. Tax-loss harvesting involves selling an investment below its tax basis so the realized loss can be used against capital gains and, within limits, other income. The key is to make the tax decision without losing sight of the investment plan. How Tax-Loss Harvesting...
Quick Answer For U.S. federal tax purposes, the IRS generally treats cryptocurrency and other digital assets as property. That means selling, exchanging, or spending cryptocurrency can create a taxable gain or loss, while receiving crypto as compensation or certain rewards can create ordinary income. For investors, the challenge is often less about knowing that crypto is taxable and more about...
Most people in their fifties, sixties, and seventies are insuring a life they no longer live. The liability limits on their policies haven't moved since the kids were in high school, even though their investments and home equity have been growing for decades. The mismatch is easy to miss because insurance arrives as three separate bills — home, auto, umbrella. Three renewal notices, three...
The benefits of being a retirement plan participant are well-documented, but the perks available to the sponsoring employer are often overlooked. In offering a retirement plan, plan sponsors can enjoy the advantages of tax deductions and credits, flexible design options and attraction and retention of employees, along with the benefits of being a participant in the plan. Tax Benefits: When...
Retirement plans are a popular way to save for retirement. Although many people participate in these plans, the flexibility allowed by plan provisions ensures each can be unique. Understanding the features and options available in a 401(k), 403(b) or 457(b) plan will help you design your plan so that it works best for you and your participants. 401(k), 403(b) and 457(b) refer to sections of the...
A significant shift in retirement plan disclosure rules is coming soon, and employers should begin preparing now. In response to new regulations included under the SECURE 2.0 Act of 2022, the Department of Labor (DOL) will require certain pension benefit statements be furnished to participants on paper, even for those who currently receive electronic disclosures. This mandate, which represents...
After a turbulent start to the year, U.S. equity markets staged a powerful recovery in the second quarter of 2026, propelled by a de-escalation of the U.S.-Iran conflict, a sharp reversal in crude oil prices back to pre-war levels, and accelerating corporate earnings growth. The S&P 500 Index1 returned 14.9% during the quarter, its best quarterly performance since the second quarter of 2020,...
September 2026 15th: Deadline for required contribution to defined benefit plans, money purchase pension plans and target benefit pension plans. 15th: Deadline for deducting 2025 employer contributions for sponsors who filed an extension on Partnership or S-Corporation tax returns, extending the original March 15, 2026 deadline. 30th: Due date for certification of the Annual Funding Target...
By: Arash Navi, Senior Wealth Manager, CFP, CFA, CPA A High Earner's Path to Tax-Free Growth The Roth IRA has become the retirement account of a generation. A decade ago, most families followed the traditional-IRA playbook their parents used — take the tax break now, pay the tax later. That script has flipped. According to the Investment Company Institute, older savers still lean traditional...
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