While we are not accountants and cannot render tax advice, we are very much aware of taxes as we work with our clients.

Based on the information in the Income Level Risks chart, here are some of the questions we review before we make recommendations from where to take income:

  1. What types of investment accounts do you have to work with?  For example, Roth IRA’s offer a tax-free option, taxable accounts, tax-loss harvesting and the opportunity to create capital gain income as opposed to ordinary income.
  2. For clients under the age of 70.5, does it make sense to consider a Roth Conversion?
  3. Will you benefit from holding equities in taxable accounts (due to the possibility of creating capital gain income) and holding fixed income securities in IRA’s?  (Interest from fixed income securities is taxed as ordinary income. Since all income from a traditional IRA is taxed as ordinary income, you may save on taxes by holding equities in taxable accounts and creating capital gain income.)
  4. Are tax-deferral annuities an option?
  5. Do municipal bonds make sense?
  6. Is there is benefit to accelerating charitable deductions?
  7. Can we get your income below the higher Medicare Part B premium threshold?
  8. Can we work to avoid the 3.8% surtax on net investment income?

I am clear that the content of this blog is very technical and complicated.

As always, we welcome a conversation with you and/or your tax advisor.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500