The theme this week is year-end tax-saving giving tips. I’m sharing with you how you can be generous, do good, and cut your tax bill all at the same time.

Today, I’m talking about charitable bunching. The changes to the tax code with the Tax Cuts and Jobs Act, have made it harder for a lot of Americans to get a deduction for charitable contributions. This happened because the standard deduction amount was basically doubled, and so it no longer makes sense for many Americans to itemize. And when you don’t itemize, you don’t get credit for those donations you’re making. Unless you bunch your contributions with a little strategy called charitable bunching. 

Here’s how charitable bunching works and how it might be relevant for you: 

Charitable bunching is a strategy where you lump your charitable donations into one year, so instead of donating to charity every year, you would donate more dollars less often. 

For example, if you donate $5,000 every year to charity, but switch to donating $15,000 every 3 years instead, you would still donate the same amount, but by donating a higher amount in a given year, the strategy of lumping or bunching those contributions into one year can help you qualify for itemized deductions and hence, allow you to continue to receive a tax deduction on those charitable contributions in the years that you bunch.

This can be particularly useful in years where you have higher income or a bigger tax bill, as the accelerated giving that’s involved with bunching can reduce your tax bill. I’ve seen situations where people have used sizable giving in year’s where they made Roth conversions or had a significant taxable event, like they sold a business. 

Making large donations in those years can sizably cut your tax bill, so it’s important to be aware that giving in big chunks can help you do good and save a boatload of taxes all at the same time. 

Just be sure to talk to your tax advisor about this, since they will be able to help you decide on the right amount of bunching that will help you reduce your tax bill and/or qualify for itemized deductions in a given year. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, charitable donations, charitable donations 2018, charitable donations tax deduction, tax cuts and jobs act, 2019 charitable deduction rules, charitable giving rules 2019, charitable donations 2019, how much do people give to charity, donations tax deduction, new tax bill charitable deductions, donor advised funds, charitable bunching

The theme this week is year-end tax-saving giving tips. I’m sharing with you how you can be generous, do good, and cut your tax bill all at the same time.

Today is all about the wonderful and unexpected benefits of giving. The reality is that very few of us give a meaningful amount of our income. Most people who donate to charity give about 2-4% of their income, and a whole ⅓ of us give nothing at all. 

Talk to most church leaders across the country, and they will often report that just 10% of their congregation provides about 90% of the funds, and that many give nothing at all. 

This makes me a little sad. Not just because of the needs of so many, especially the poor, who could be helped by greater generosity, but because greater generosity has so many benefits for the giver as well. If you’ve ever felt the joy of giving a thoughtful gift to a loved one, you know exactly what I am talking about. 

This past April, I spent 2 weeks in Israel. One of the most memorable experiences of my trip was the afternoon I spent at the Dead Sea. You really do just float, yet the water is so salty and full of minerals that if it touches your face or gets in your eyes it stings...a lot. What makes the Dead Sea, well dead, is the water in the Dead Sea cannot get out. It has nowhere to flow, so it just evaporates. As a result, the Dead Sea is 10 times as salty as the ocean and nothing can live in it. 

The Dead Sea isn’t a sea, but a lake that is filled with water flowing into it from the Jordan river. 

But since nothing flows out and it holds on to all the water it receives, it is barren and lifeless. 

It works the same way when we selfishly hold on to everything we have. We die inside and become more and more indifferent to those around us. But as I’ve experienced in my own life, generosity breeds more generosity, more love, and a profound satisfaction and freedom that comes with being able to let go. 

Don’t be afraid to let go and be more generous. I promise it will bring you more joy and a more profound wealth in all other aspects of your life. 

My hope is that this week’s tips will not only help you be smarter with your giving, but I challenge you to give more than you are giving now. If you’re giving nothing, then start small and start where you are with $10 a month. If you are giving 2-4% of your income, like most Americans, I challenge you to boost your giving by 1% of your income. You’ll likely not miss the money that much, but the reward you will experience will be worth infinitely more than the extra 1% you gave away.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, charitable donations, charitable donations 2018, charitable donations tax deduction, tax cuts and jobs act, 2019 charitable deduction rules, charitable giving rules 2019, charitable donations 2019, how much do people give to charity, donations tax deduction, new tax bill charitable deductions, donor advised funds, charitable bunching

Welcome to a new week and a new theme here on the One Minute Retirement Tip! This week, 

I’m talking about year-end tax-saving charitable giving tips! How you can take advantage of some recent changes with the tax cuts and jobs act, otherwise known as the Trump tax cuts, to give more to the causes that are meaningful to you, and do so in a tax-efficient way. 

If you want to give smarter, then be sure to listen this week, because I’m talking about everything from qualified charitable distributions to charitable bunching to donor-advised funds… all to help you be generous, do good, and cut your tax bill all at the same time. 

Before I send you off into your day, I just want to acknowledge that today is a very special day. Day 365 of the One Minute Retirement Tip. A year ago today these daily tips were started on a whim, and much to my surprise, I am still here talking at you a year later. I  got the idea to do a daily retirement tip from my buddy Nick True, and after a frenzied 2 weeks figuring out everything from where to record and how to navigate podcast hosting to compressing audio files, the One Minute Retirement Tip was born. 

And thank you for listening and making these tips a part of your day. I have been so motivated and inspired by the success the podcast has already had, and I am so overjoyed by your reviews and emails with your comments that these tips are making a difference.

I very much appreciate you, and I love bringing you daily tips to help make your journey to retirement within reach. And I hope to continue to bring you these tips for years to come! I know I’m not retiring any time soon, but I hope you are!

That’s it for today, thanks for listening. My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, charitable donations, charitable donations 2018, charitable donations tax deduction, tax cuts and jobs act, 2019 charitable deduction rules, charitable giving rules 2019, charitable donations 2019, how much do people give to charity, donations tax deduction, new tax bill charitable deductions, donor advised funds, charitable bunching

It’s Sunday, which means...It’s recap time! 

The theme for this week was: The Backdoor Roth IRA strategy. If your income is too high to contribute to a Roth IRA, there is a little known backdoor Roth IRA strategy that is perfectly legal, that will still allow you to contribute up to 7,000 to a Roth IRA in 2019 if you’re over 50. 

Hopefully after listening to the tips this week, you now know whether or not  this strategy is potentially right for you, and you’ve already called your tax advisor to get their take, because as I talked about on Wednesday this week, the clock is ticking...you only have until the end of the year to make this happen for 2019! 

Here’s what we covered in each episode this week: 

• What Is The Backdoor Roth IRA?
• When the deadline is for the backdoor roth...hint, hint, it’s coming up soon!
• Why you should consider the Roth in the first place
• The Mega Backdoor Roth for you super savers out there and how it works
• And...Why you may just want to keep things simple by not worrying about the backdoor Roth if you have a Roth 401k 

If you missed any of these episodes or if you want to revisit any of them, you can find them on iTunes, Spotify, or Google Play by searching for the “One Minute Retirement Tip with Ashley”. 

Tomorrow we’re starting a brand new theme: Year-end charitable giving strategies! How you can take advantage of some recent changes with the tax cuts and jobs act, otherwise known as the Trump tax cuts, to give more to the causes that are meaningful to you, and do so in a tax-efficient way. I’ll be talking about everything from qualified charitable distributions to charitable bunching to donor-advised funds to help you be generous, do good, and cut your tax bill all at the same time. 

That’s it for this week! Thanks for listening and I hope you have a blessed Sunday! 

My name is Ashley Micciche and this is the “One Minute Retirement Tip”.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, Roth IRA, roth ira income limits, backdoor roth ira, roth ira income limits 2019, modified adjusted gross income, ira contribution deadline, ira rule, roth conversion, backdoor roth conversion, roth conversion deadline, backdoor roth ira conversion, backdoor roth ira conversion deadline, magi limit, backdoor roth limit, 401k limits 2019

The theme this week is the backdoor Roth IRA strategy. If you make too much money to qualify to make a Roth contribution in 2019, don’t fret. There is a little-known strategy called the backdoor Roth, that will still allow you to make Roth contributions. 

Here’s how it works: You make a non-deductible or after-tax IRA contribution to your Traditional IRA. There aren’t income limits on conversions from a Traditional IRA to a Roth IRA, so you can then turn around and convert that contribution to a Roth. Bam. Done. Take that Uncle Sam!

If this all sounds too complicated for you, that’s ok, because I have another solution for you: just take advantage of your Roth 401k plan at your work. If you work somewhere that offers a 401k, chances are good that there is also a Roth option that would allow you to save up to $25,000 in your Roth 401k in 2019 and not mess with any of these quirky Backdoor Roth strategies. 

That’s what I’ve been doing since I became eligible for a 401k plan for the first time in 2007 - putting as much money as I could into my Roth 401k every year, and it’s worked out great. 

So if you have access to a Roth 401k plan through your work, and you won’t be able to max that out anyways, you may just want to keep it simple and forget about the backdoor Roth IRA strategy all together. 

But plenty of you listening don’t have access to a Roth 401k at your work, and in that case, the backdoor Roth strategy is a compelling choice when your income is too high to qualify for a Roth. 

That’s it for today. Thanks for listening. Tomorrow, we’re going to recap the week and I’m going to give you a little preview of next week’s theme. 

My name is Ashley Micciche and this is the One Minute Retirement Tip.

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----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, Roth IRA, roth ira income limits, backdoor roth ira, roth ira income limits 2019, modified adjusted gross income, ira contribution deadline, ira rule, roth conversion, backdoor roth conversion, roth conversion deadline, backdoor roth ira conversion, backdoor roth ira conversion deadline, magi limit, backdoor roth limit, 401k limits 2019

The theme this week is the backdoor Roth IRA strategy. If you make too much money to qualify to make a Roth contribution in 2019, don’t fret. There is a little-known strategy called the backdoor Roth, that will still allow you to make Roth contributions. 

Here’s how it works: You make a non-deductible or after-tax IRA contribution to your Traditional IRA. There aren’t income limits on conversions from a Traditional IRA to a Roth IRA, so you can then turn around and convert that contribution to a Roth. Bam. Done. Take that Uncle Sam!

Today I’m talking about the Mega Backdoor Roth Strategy. It’s like the backdoor Roth, on steroids! You can only convert $7,000 to your Roth in 2019, using the backdoor Roth strategy, but with the mega backdoor Roth, you can actually save up to $62,000 in a Roth in 2019. 

Here’s how it works: Through your 401k plan, you can contribute up to your maximum of $25,000 in 2019 if you’re over 50. In addition to that, if your employer does not provide any matching contributions nor profit-sharing, you could contribute up to an extra $37,000 on an after-tax basis to your 401(k). From there, if your plan allows, you can then rollover the full $62,000 into a Roth. 

The stars need to align in order for you to take advantage of the mega backdoor Roth, and your 401k plan needs to have all the right features and language written into the plan document. So this strategy works best for small business owners who have a say in the design of their 401k plan. It works really well for solo entrepreneurs where it’s just you, because it’s much easier to put this type of plan in place. It works best when you don’t have matching contributions, and if you have employees it’s harder to get your contribution amounts up to that $62,000 maximum. 

That’s it for today. Before you go, please take a minute to leave an honest review for the One Minute Retirement Tip in Amazon or iTunes. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, Roth IRA, roth ira income limits, backdoor roth ira, roth ira income limits 2019, modified adjusted gross income, ira contribution deadline, ira rule, roth conversion, backdoor roth conversion, roth conversion deadline, backdoor roth ira conversion, backdoor roth ira conversion deadline, magi limit, backdoor roth limit, 401k limits 2019

The theme this week is the backdoor Roth IRA strategy. If you make too much money to qualify to make a Roth contribution in 2019, don’t fret. There is a little-known strategy called the backdoor Roth, that will still allow you to make Roth contributions. 

Here’s how it works: You make a non-deductible or after-tax IRA contribution to your Traditional IRA. There aren’t income limits on conversions from a Traditional IRA to a Roth IRA, so you can then turn around and convert that contribution to a Roth. Bam. Done. Take that Uncle Sam!

Today, I’m taking a step back to explain why you want to consider the Roth IRA in the first place. 

The answer lies in the taxes. Every dollar in the Roth is never taxed again, so you could let that grow tax free for the rest of your life or take the money out as income, but whatever you do, the government never gets their hands on it after you retire. 

Tax-free growth and tax-free withdrawals is a beautiful thing! 

And not only that, but Roth IRAs also don’t have mandatory withdrawal requirements when you reach the age of 70 ½. So you could leave the money in the Roth and let it keep growing if you don’t end up needing the money for income in retirement. No forced withdrawals, and no taxes on those forced withdrawals. 

If you’re like 110% of Americans, you would prefer to pay less in taxes, and socking as much into a Roth as you can during your working years will provide more flexibility and a lower tax bill in your retirement years. 

Many people won’t use the Roth to its potential as a retirement savings vehicle, because they are too short-sighted when it comes to their taxes. They would rather get a tax break now by making contributions to their traditional IRA or 401k accounts. But as I’ve talked about a lot here on the One Minute Retirement Tip, you could be leaving a lot of money on the table in the long-run by not socking away more money into your Roth. 

But just go ask any 72 year old you know who has money in their IRA, and ask them how much they love those forced withdrawals every year, how those withdrawals drive their income up, and how much they love paying the taxes on those withdrawals. 

My clients gripe about it all the time, but it’s too late for them now. They can’t go back in time and contribute to their Roth, but if you’re still working, you still have options, so be smart and take advantage of those options. 

Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, Roth IRA, roth ira income limits, backdoor roth ira, roth ira income limits 2019, modified adjusted gross income, ira contribution deadline, ira rule, roth conversion, backdoor roth conversion, roth conversion deadline, backdoor roth ira conversion, backdoor roth ira conversion deadline, magi limit, backdoor roth limit, 401k limits 2019

The theme this week is the backdoor Roth IRA strategy. If you make too much money to qualify to make a Roth contribution in 2019, don’t fret. There is a little-known strategy called the backdoor Roth, that will still allow you to make Roth contributions. 

Here’s how it works: You make a non-deductible or after-tax IRA contribution to your Traditional IRA. There aren’t income limits on conversions from a Traditional IRA to a Roth IRA, so you can then turn around and convert that contribution to a Roth. Bam. Done. Take that Uncle Sam!

Today, I’m sharing with you why I chose to do this topic in October - it’s because if you’re going to utilize the Backdoor Roth, the clock is ticking. You only have until the end of the calendar year to make your Backdoor Roth conversion, so if you haven’t yet talked to your tax advisor to see if this strategy makes sense for you, what are you waiting for? 

You should consider the Backdoor Roth Strategy if: 

• You don’t have access to a Roth through your 401k plan
• You make too much money to qualify for a Roth IRA contribution in 2019
• Your pre-tax IRA account balances are low. This is important because you could owe taxes on the amount you convert to a Roth if you already have a lot of money socked away in an IRA account.

So do your homework, talk with your tax advisor, see if this strategy makes sense for you. But do it now, and don’t procrastinate, because if you wait until the end of the year, you could miss the opportunity to do a backdoor Roth contribution for 2019, and will have to wait until next year. 

Your retirement is perhaps the most important financial decision you’ll ever make. You want to get it right. Well, so do I. For the last 12 years, I’ve been helping clients just like you make the transition into retirement. If you want to talk one-on-one with me about whether or not you can retire, head on over to truenorthra.com, where you can book a 15 minute call with me, at a time that’s convenient for you. The call is confidential, free, and I promise to help guide you on whatever is weighing most on your mind right now regarding your retirement. So head on over to truenorthra.com and book a call today. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, Roth IRA, roth ira income limits, backdoor roth ira, roth ira income limits 2019, modified adjusted gross income, ira contribution deadline, ira rule, roth conversion, backdoor roth conversion, roth conversion deadline, backdoor roth ira conversion, backdoor roth ira conversion deadline, magi limit, backdoor roth limit, 401k limits 2019

The theme this week is the backdoor Roth IRA strategy. If you make too much money to qualify to make a Roth contribution in 2019, don’t fret. There is a little-known strategy called the backdoor Roth, that will still allow you to make Roth contributions. 

Here’s how it works: You make a non-deductible or after-tax IRA contribution to your Traditional IRA. There aren’t income limits on conversions from a Traditional IRA to a Roth IRA, so you can then turn around and convert that contribution to a Roth. Bam. Done. Take that Uncle Sam!

2 important things I need to point out here, and it’s important that you understand this, because there are a couple of circumstances where you could still owe a substantial amount of taxes by using the backdoor Roth: 

1. Pro rata rule - when you report the Roth conversion on your taxes, you’ll also need to include the total value of your IRA accounts, like SEP IRAs and Traditional IRAs, because this total value of existing IRA assets that you have is used to calculate the taxes on the amount you convert. Keep in mind that 401k balances aren’t included in this. The bottom line here is that if you have a lot of money in tax-deferred IRA accounts, you could be faced with a tax bill on the amount you convert to a Roth, so be sure to run this strategy by your tax advisor before you pull the trigger, so they can estimate what that tax hit might be for you.
2. Taxes on gains - if you invest the money you contribute to your IRA before converting it to a Roth and it grows in value, you could also pay capital gains taxes on the amount you convert, so you may want to consider just leaving any IRA contributions in cash before you convert to the Roth, to keep any gains to a minimum.

The takeaway here is that a Backdoor Roth is worthwhile if your income is too high to qualify for the Roth, but as always, the rules can get a little complicated, so check with your tax advisor to make sure you don’t have any surprises come tax time next year. 

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, Roth IRA, roth ira income limits, backdoor roth ira, roth ira income limits 2019, modified adjusted gross income, ira contribution deadline, ira rule, roth conversion, backdoor roth conversion, roth conversion deadline, backdoor roth ira conversion, backdoor roth ira conversion deadline, magi limit, backdoor roth limit, 401k limits 2019

Welcome to a new week and a new theme here on the One Minute Retirement Tip! This week, 

I’m talking about how you can still qualify for a Roth IRA, even if your income is too high. 

Alright, you ready for this? You ready for your mind to be blown? If you’ve been told for years that you make too much money to contribute to a Roth IRA, there is a little, perfectly legal loophole that allows you to still contribute to a Roth, and it’s called a backdoor Roth IRA. 

So this week, I’m sneaking you in the backdoor, and we’re talking about how you can take advantage of the backdoor Roth IRA strategy if your income is over the threshold to qualify for Roth IRA contributions in 2019. 

Most people mistakenly believe that if your income is higher than these thresholds that the Roth IRA is a no-go. But that’s not true, because there is a perfectly legal way for you to still contribute up to $7,000 to a Roth IRA in 2019 if you’re over 50, regardless of your income. And I’ll even share with you how you can utilize the mega backdoor Roth IRA to get even more money into your Roth for 2019!

So if you make more than $122,000 in 2019, and you’re single, or you’re married and your income is higher than $193,000 in 2019, pay close attention this week. 

That’s it for today, thanks for listening. My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, Roth IRA, roth ira income limits, backdoor roth ira, roth ira income limits 2019, modified adjusted gross income, ira contribution deadline, ira rule, roth conversion, backdoor roth conversion, roth conversion deadline, backdoor roth ira conversion, backdoor roth ira conversion deadline, magi limit, backdoor roth limit, 401k limits 2019