Tim Steffen

Baird Director of Advanced Planning Tim Steffen discusses what high-income heavy savers need to know about this maneuver. spr.ly/6012BBT1di

Tax-free retirement distributions sound straightforward until you get into the actual rules.  Join Tim Steffen for this Kitces webinar, where Tim will cover five strategies advisors use to get money out of retirement accounts without a tax hit: rollovers, after-tax basis recovery, NUA, Roth withdrawals, and QCDs. Each one has specific conditions, sequencing requirements, and common failure points that can quietly cost clients.  ➡️Kitces Members-Register here: kitc.es/4tuKcHl ➡️Non-Members-Register here: kitc.es/3PdtXzf #KitcesWebinars #CECourses #CFP

Ever heard of the Mega Backdoor Roth Contribution strategy? @christine_benz of @MorningstarInc and I had a chance to discuss these recently. The name may be awkward, but the technique is a thing of beauty! bit.ly/48CULiV

@TimSteffenCPA, Director of Advanced Planning at Baird, provided insight in Financial Planning on tax implications related to investing in precious metals. Read the article here: bit.ly/4tzJHMl

@logical_blonde Gotcha.

First concert of the year ✔️

@logical_blonde You’re in Milwaukee? I’d love to chat sometime, learn more about your business. I’m always on the lookout for a good CPA in the area.

@CPAPlanner So safe to assume guaranteed payments made to a ltd partner would still be subject to SE tax, no matter what?

Last month, the 5th Circuit Court of Appeals issued an extremely taxpayer-friendly decision regarding limited partners. In short, the Court ruled that limited partners are not subject to self-employment taxes... period, end of story. In other words, the limited partner's level of activity has no bearing on whether employment taxes apply. Just an investor and spend no time actually working in the partnership? No self-employment taxes for you! Super-active and spend a lot of time in the business? Well, under the 5th's decision, no self-employment taxes for you either! There are multiple similar cases pending in other jurisdictions, and I suspect that ultimately, this issue will make its way before the Supreme Court... but that might take several years, or longer, to play itself out. My guidance to limited partners who've paid self-employment taxes on some or all of their partnership income in the recent past? Consider filing a protective refund to keep the statute of limitations open so that if the litigation is ultimately resolved in your favor, you can recover those employment taxes beyond the normal 3-year statute. "Expert Unpacks What's Next After Sirius Solutions Decision" tax.thomsonreuters.com/news/expert-un…

#SocialSecurity is facing real issues. They're fixable, but at a cost - and that cost gets bigger the longer Congress waits to address it.

@FortWayneCPA He also used this - is it you?

@SamCrahan Who? I need to know...

I am quoted in another CPE... Good grief...

@FortWayneCPA @SamCrahan I saw it too - WICPA tax conference in Wisconsin. Doug Van Der Aa, CPA from Grand Rapids, MI.

@CMcCulloughEA @DianeKennedyCPA I agree. The bill text clearly says the $10k deduction is for "personal use" only. So how does that change the mileage vs actual expense decision for the business side?

@DianeKennedyCPA You are not referring to the new car loan interest deduction, are you? I thought that was only personal cars. Was there another change for business vehicles?

OBBB changed the mileage vs. actual game for business vehicles. ✔️ Mileage users now ALSO deduct auto loan interest (up to $10K). ✔️ If you chose actual in Year 1, you can’t switch. ✔️ New car? Mileage might suddenly be the better move. Hidden gem most people will miss.

@CaydenWMcLaugh How did you come up with $11,552 in taxes on $90,627 of income? Even using no deductions and 2025 MFJ brackets, you only get 10,398. Subtract age 65 SD of $34,700, you get more like $6,200 of tax. Inflate the brackets for 30 yrs and it's even less.

DISTRIBUTIONS IN RETIREMENT Following the 4% withdrawal rule with 3% COLA: • Year 1: Withdraw $90,627, pay $11,552 in taxes • Year 2: Withdraw $93,345, pay $12,150 in taxes ...and it compounds from there.

If I’ll be in a lower tax bracket in retirement, doesn’t it make sense to take the deduction now? Hot Take: Your 401(k) tax “deduction” isn’t actually saving you money. It’s a loan from the IRS paid back with interest. Here is the math that will shock you 👇

Thanks to @MichaelKitces & team for asking me back to host another webinar: Managing The Ripple Effect Of Capital Gains By Optimizing Tax Strategies. Earn 1.5 hours of CE for CFP, IWI and others. June 17, 3:00 ET. bit.ly/3TmiR9q

@IraGilligan All that, and no comments about the tanning beds? Or were those gone?

Still alive but I'm pretty hungry, this looks tempting

So about the House tax proposal- Yes, some of this will change, but a lot will likely become law, too. Best to have a good handle on it now rather than playing catch up later. Tax planners, we've been waiting for this since 2017. Game on! bit.ly/42ZNJT3

@bsuecannon @JosephOnions @fintaxdude At that point it's all on the final December statement. Might be some tweaks between qual & nonqual divs by the time the 1099 comes out, but that last statement has most everything.

@JosephOnions @fintaxdude That makes sense. If I can get the information by early January, I can still get projections done.

#taxpayers: I shouldn’t owe this year. Capital gain distributions: hold my beer. #TaxTwitter #taxseason

Pleased to share our Market, Policy and Planning Outlook for 2025. Experts from @StrategasRP and @rwbaird provide insights on what to expect in the coming year. #tax #stockmarket #retirement bit.ly/4hu6anm

The Fall edition of @rwbaird Digest is now available, and it's all about year-end planning. Great tips on giving strategies - both to charities and family members - plus Roth conversions, what sunsetting of the TCJA could mean and more. bit.ly/3UzxlnF

Between the election & potential TCJA sunsetting, uncertainty & fear can easily set in. So this year-end, we're focusing on the tried & true: planning ideas that work in any environment - plus a couple of new things! bit.ly/3BQyvEJ

@MikeSyl36625988 The planner's response might be to invest those inside an IRA going forward to avoid the 1040 issues. Sounds great, until you have to explain UBIT and how an IRA can pay tax, and now they pay for THAT return. I see it happen all the time.

Yesterday I talked to the relatively new Financial Planner who had one of my clients put $1,000 each into six different Master Limited Partnerships (MLP's). We had a ten minute phone call yesterday. Back in March I told the client: Your taxes are done, email is coming. You invested in six different MLP's this year in taxable accounts and the total amount invested was roughly $6,000. Do you remember the six different K-1's you gave me for these? Client: Yes, my financial planner says they are just great investments and I switched financial planners last year. Me: I have no idea if they are good investments are not; I am not a financial planner. From a tax standpoint I prefer you not do them at all or if you do, ensure you put a lot of money into it rather than $1,000. They are complicated and hard to deal with from a tax standpoint. They added $750 to your tax bill to me this year. I suggest you sell all of them before year end and stop using this strategy unless you want to pay me a lot more money every year. Note you should expect this additional charge every year until you sell them all. Client: $750 extra? Me: Yep, luckily these were pretty easy for me to deal with, otherwise it would have been more. If they were the ugly ones it would have been $1,500 or more added to your bill. Client: Will you talk to my financial planner and explain this? Me: Sure, well after April 15th. Give them my email and they can send me an email and offer to take me to Cork N Cleaver for lunch one day and I can explain how these work from a tax standpoint and the additional costs they cause. Better yet, take copies of the K-1's to the financial planner at your next meeting and ask him/her how long it takes to enter all this crap on your 1040 and why you could not have just put all $6,000 into one MLP. Client: Silence... Silence... Silence... Me: My email is coming and all of the details are in it. This is all I wanted to discuss because it is hard to explain in an email. Client: OK, thanks. I am calling my financial planner. Me: OK, tell them NOT to contact me until well after April 16th. Yes I am blunt and it was March 23rd so I was busy. Client: OK. Then the story continued late yesterday. Newish Financial Planner: Sent me an email and asked if we could have a quick phone call. Note he did NOT offer to take me to Cork N Cleaver and he should have... I like Cork N Cleaver. Me: Sure, call me between 4 PM and 5 PM today or tomorrow between 9 AM and 11 AM. Newish Financial Planner calls me. A ten minute conversation ensures. Summarized here for brevity: He tells me client bought two more MLP's in early 2024 and now has a total of eight in a brokerage account. Newish Financial Planner brags that client invested about $8,000 into the 8 different MLP's; however, they are currently worth almost $11,000. Financial Planner politely, and he was very polite and professional, asked me if I really suggest the client sell all eight MLP's by the end of 2024 and not purchase any more. My response summarized here for brevity: Client paid me $750 extra for 2023 returns. My rates are going up on 1/1/25 and I estimate client will pay me $1,100 extra for 2024 returns since you bought two more MLP's. Lets say client has $3,000 in gains from MLP's next month and all are sold. Client will pay me $1,850 in extra accounting fees to deal with this. If client has $3,000 in capital gains then client is paying me $1,850 in fees for $3,000 in gains. These are all energy related MLP's. IMO, and I am NOT a financial planner, you could have invested in one MLP instead of eight OR you could have chose a different investment. Yes, I suggest you ensure all are sold before year end UNLESS you feel the investment gains justify the extra tax preparation fees as compared to other investments. Newish Financial Planner: Silence for 20 seconds. Then he asks, is it really hard to enter those K-1's on a 1040. Me: Yes it sure is. First off you should ensure you tell all of your clients they cannot have their personal tax returns prepared until they get all of the K-1's. You should tell them not to self prepare. You should tell them to use a well qualified tax pro and you should warn them their tax return preparation cost will increase significantly. If you have a client with 6 or 8 of these things they need to wait until they have all 6 - 8 of the K-1 packages and put them on their income taxes and it might cause them to have to file in other states. If your clients self prepare their returns using a product like TurboTax they are very likely doing their income taxes wrong. If they go to a tax franchise their odds of their returns being correct are better. If they use a credentialled tax pro their odds of the returns being correct are even better. Most people enter K-1's from MLP's incorrectly. Newish Financial Planner: I am going to do some asking around. I have several clients I do this with and you are the only CPA who told the client you charged extra for the K-1's. Me: I am blunt. My clients get advice from me and they know exactly what I think. Newish Financial Planner: I am going to ask around. Me: Excellent have a great day. He should have offered to take me to Cork N Cleaver... #cpa #ea #tax #accounting #accountant #bookkeeper #bookkeeping #intuit #turbotax #taxplanning #k-1 #financialplanner #financialplanning #finance #FinancialFreedom #investing #smb #taxtwitter #FinancialNews #FinancialFreedom #FinancialGrowth #taxtwitter