Retirement

Starting in 2027, a long-standing credit is gone and a new one takes it's place.

2026 is the last year for the saver’s credit. This tax credit has rewarded low- and middle-incomers who contributed money to an IRA, 401(k), 403(b), SEP or similar retirement plan. The maximum credit is $2,000 for joint filers and $1,000 for other filers is capped at 50%, 20% or 10% of contributions, depending on your AGI (adjusted gross income). In 2026, the saver’s credit fully phases out at AGIs of $40,250 for single filers, $60,375 for household heads and $80,500 for married couples filing a joint return. 

One of the questions I get alot are from people who have a great deal of money bult up over the years and they want to fund a Roth IRAs by doing conversions from their traditional IRA to a Roth IRA and/or making yearly Roth contributions.

While you can’t deduct the contributions you make to a Roth IRA, the money in the account grows tax-free. Of course, as with most things concerning taxes, there are some rules to prevent from cheating the system. In brief, you are subject to the five-year rule and withdrawals have to be after age 59½ to be not taxable and prevent penalties.  

One of subjects that seems to come up when doing people's taxes and I see that they have changed jobs that had retirement plans is: What did you do with your retirement plan at your previous employer?

I have also found it amazing how many people have not even thought about it, or know what their options are.  So, here is a short primer on your options.

#1 - 401(k) rollover: Keep you savings with your previous employer's plan

If you want to pay less when you retire, moving to one of the states that don’t tax retirement income might be one way to do that. So, if your retirement income includes Social Security benefits, distributions from a 401(k) or IRA, or a pension, you might want to consider one of these states.

Even though these states don't tax "traditional retirement income," you might still have to pay tax on other types of income you earn in retirement, such as from wages, interest, and dividends. (Federal income tax still applies in these states.)

Alaska

Alaska doesn’t tax your Social Security benefits, your pension, your 401(k) or IRA distributions. That’s because Alaska has no state income tax. 

The retirement planning changes in a nutshell:

Charitable remainder trusts are irrevocable trusts that let you donate assets to charity and draw annual income for life or for a specific time period.

We closely examine charitable remainder trusts to ensure they:

• Correctly report trust income and distributions to beneficiaries
• File all required tax documents
• Follow all applicable tax laws and rules

How a Charitable Remainder Trust Works

In a charitable remainder trust: