Our Accounting Articles

Tax Implications of the Supreme Court’s Same-sex Marriage Decision

by | Jul 13, 2015 | 0 Comments

July 14, 2015

Same-sex married couples may find their financial situation has been greatly simplified by the recent Supreme Court decision.On June 26, the U.S. Supreme Court ruled that same-sex couples have a constitutional right to marry, making same-sex marriage legal in all 50 states. For federal tax purposes, same-sex married couples were already considered married, under the Court’s 2013 decision inUnited States v. Windsor and subsequent IRS guidance — even if their state of residence didn’t recognize their marriage. read more…

Opening the “back door” to a Roth IRA

by | Jun 29, 2015 | 0 Comments

June 30, 2015

A potential downside of tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year taxable income.

If the income-based phaseout prevents you from making Roth IRA contributions and you don’t already have a traditional IRA, a “back door” IRA might be right for you.

Start now for retirement.

Unfortunately, modified adjusted gross income (MAGI)-based phaseouts may reduce or eliminate your ability to contribute: read more…

Married With a Large Estate? Why You Still Need a Credit Shelter Trust

by | Jun 22, 2015 | 0 Comments

June 23, 2015

For couples with large estates, making lifetime asset transfers and setting up trusts can provide benefits that exemption portability doesn’t offer. Read on for all the reasons that the easier path is not always the better path.

Think You Don’t Need a Credit Shelter Trust? Think again.

Even though portability now allows married couples to use up both spouses’ estate tax exemptions without having to make lifetime asset transfers or set up trusts, this “easier” path isn’t necessarily the better path. For couples with large estates, making lifetime asset transfers and setting up trusts can provide benefits that exemption portability doesn’t offer.

With portability, if one spouse dies and part (or all) of his or her estate tax exemption is unused at death, the estate can elect to permit the surviving spouse to use the deceased spouse’s remaining estate tax exemption. But making the portability election doesn’t protect future growth on assets from estate tax like applying the exemption to a credit shelter trust does.

Also, the portability provision doesn’t apply to the GST tax exemption, and some states don’t recognize exemption portability. Credit shelter trusts offer GST and state estate tax planning opportunities, as well as creditor and remarriage protection.

If you’d like to learn more about credit shelter trusts or other estate planning strategies for your situation, please let us know by contacting us.

© 2015 Thomson Reuters/Tax & Accounting

Details Matter When Selling Investments

by | Jun 15, 2015 | 0 Comments

June 16, 2015

Date, time, price, and fee can dramatically affect the tax consequences of investment sales.If you don’t pay attention to the details, the tax consequences of a sale may be different from what you expect. For example, if you bought the same security at different times and prices and want to sell high-tax-basis shares to reduce gain or increase a loss to offset other gains, be sure to specifically identify which block of shares is being sold. read more…