@TKopelman Be careful on state recapture rules on 529 plan to Roth if you received state tax credits or deductions. Especially in Indiana.
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Chris
553 posts
Why I like 529 plans for my clients:
- tax free growth (they pay 23.8% capital gains at a minimum)
- ability to superfund and get a lot in when kids are young
- can change beneficiary to other kids
- $35k Roth conversion
- can use $20k/yr for private school
- can use for room and board
- can use for SAT, ACT, tutoring, etc
- can use for trade school
- worst case pay 10% penalty and income taxes on the growth which is the same as the capital gains tax would be for them
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@sup_tim @BarstoolNate Second Happy Endings, also cougar town and rules of engagement are underrated gems.
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@BarstoolNate Happy Endings, was on at the same time as New Girl, also good
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Side note- are there any Friends/New Girl/HIMYM type of sitcoms on the air right now? Like the fun friend group in a big city thing?
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@rledbetterCPA @Glen_NQDC Also debt basis is helpful to avoid distributions in excess of basis
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Partnerships allow you an increase in basis for entity debt. Basically you can use losses financed with debt to offset other income. S Corps don’t do that. And can often result in accidental mismatch of income and losses at the shareholder level (paying self W2 while running losses on the S Corp that get limited)
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A lot of business owners are deathly afraid of self-employment tax.
So much so, they choose to be an S-Corp and give up:
• Ability to use debt basis when running losses
• Ability to step-up basis for new or exiting owners
• Ability to allow non-individuals as investors
• Ability to specially allocate income
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Can’t spell Jerry O’Connell without 2 L’s #BingBong @MrJerryOC
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@SiegelMicha @DailyTaxMemes Didn’t they stop requiring it be attached to your individual income tax return years ago? Also they did add an optional form this year
irs.gov/pub/irs-pdf/f1…
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@DailyTaxMemes They all got burned away in the last fire....incredible there's no official form for it...they may want to work that 1 up instead of creating the k4-9
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There's zero shot the IRS ever has a clue in 10 years or whatever if you attached your 83b election to the return filing but onward we do what we are told to do
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@camp_wealth Indiana offers a juicy credit for contributions, but a salty credit recapture rule if not used for qualified education expenses. Indiana taxpayers need to be very careful and aware of this before moving 529 plan $ to a Roth.
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529s are no longer exclusively for education.
Now they can be used to give your child a jumpstart on retirement.
But the new 529 to Roth rules are far from a “hack”.
Here’s what you need to know:
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@ddjiii2 @edisonbtc @Northwoodsosaur @realEstateTrent Economies of scale, opportunity cost of my time, and average person lack of knowledge of how much repairs should cost or who they should use to do a good job means these expenses will be more for the avg homeowner.
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@edisonbtc @Northwoodsosaur @realEstateTrent No, he’s saying overall the expenses should be the same, plus landlords need a cut, so renting should be on average more expensive.
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New York City's Latest Rent Vs Own Numbers are in!
(1-bedroom apartment, average cost per month)
Rent: $4,860
Own: $10,950 (20% down)
Doesn't take a math genius to see your parents were wrong about the whole "rent is throwing away money" thing.
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👀
Jackie Ossin Hirsch@JackieHirsch_
What LOI do I send to Buyers looking to acquire companies? This one. And if you haven’t attended one of Eric’s @SMB_Attorney webinar’s before, you don’t want to miss it. I know other attorneys who use this LOI! I first met Eric Pacifici on a transaction I completed in May 2022. The Buyer raved about his attorney. And I was thinking really???? Raving? But it became very clear why he raved about Eric. Eric was able to cut through the problems in this deal like a hot knife through butter. And manage the ginormous ego of the Seller’s attorney who was a bit of an impediment to the deal. He was a wise and calm sage in the deal. Then I did several deals with him and @KHendersonCo @nathan_e_hill since. The @smblawgroup operates unlike any other law group I have ever worked with. It’s a pleasure to work with them.
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Then, after 30 years, the loan is still outstanding (we're in pretend land), but the bank agrees to make the mortgage nonrecourse. Now, the partners have taken $450 of deductions each because it was at risk, but now it's not. WHAT HAPPENS? 4/6
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Today, I learned something really interesting about the at-risk loss limitation of IRC 465. I'll explain via example. 1/6
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@jennyrozelle Also important to make sure the homestead exemption gets refiled/reflected after this change in ownership. Had a divorcee buddy who didn’t realize his homestead exemption fell off until the tax bill came, 💩 his 👖 when he opened it
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I am surprised by how many couples who go through a divorce, and fail to transfer the house in accordance with the divorce decree.
It’s strange how often I see the former spouse still on the Deed, but the decree states it was to be transferred to just one.
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@jennyrozelle @LegalTeaPodcast Naming their Estate as their IRA beneficiary
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Just recorded a @LegalTeaPodcast episode where I discuss 5 mistakes that financial and tax professionals make relating to estate planning.
Since it won't be released until May, 21st, let's play a game... Take a guess at the mistakes! 👀
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@olsonplanner Big oof. Also TP can’t recharacterize 2022 and older contributions, those are excess contributions now, Form 5329 issue. 2023 you have until 10/15/24 if a 2023 tax extension was filed, otherwise those are also excess contributions.
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True story -
New accountant: uhhh how many years have you been making Roth IRA contributions?
Client: like 5 yrs.
NA: you've been making $250k for 4 yrs.
Client: yep
NA: you're gonna have to recharacterize all of those contributions and related earnings.
Client: yikes
1/x
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Do you know the difference between personal goodwill and enterprise goodwill?
Be honest.
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@cordes_tax Did they use an Apple product to fill it out? Sometimes it’s blank when I open it on my Dell laptop, but it’s filled out when I open on my iPhone/Ipad.
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Client: Here's that W-9 you asked for so you can do the 1099!
The W-9:
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@korlando2251 I was there a couple weeks ago and really enjoyed the Boathouse, also recommend the Hangar bar nearby for pre or post drinks.
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#TaxTwitter Meet up for dinner at Disney Springs on Sunday 12/17 before #NewMoneySummit?
Restaurant suggestions? Thoughts?
Sabrina the SALTy CPA@IraGilligan
If you're going to the New Money Summit in Orlando, I have 3 words for you: DOLE WHIP FLIGHTS disneyfoodblog.com/2023/01/15/sto…
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@PathwayToFI @AtkinsonFinance @BrianReiss7 The bigger issue is they offer a generous credit for contributing to the 529 plan (most generous incentive of all the states) but they recapture it if you make non qualified withdrawals under IN Law.
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@AtkinsonFinance @BrianReiss7 Thanks.
Looks like Indiana will be losing some 529 accounts to other states.
Interesting that they want to tax rollovers, even when they’re tax exempt federally.
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The 529 college savings account is getting an upgrade in 2024!
529 dollars that aren’t used for education can now roll over to your kid’s Roth IRA without taxes or penalties.
This is huge for anyone worried about “over-saving” for college.
Here are 5 details you need to know:
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What a Thanksgiving weekend with friends and family, @ButlerMBB went 2-1, first time back @WaltDisneyWorld since 2000, and had to toss a little #taxtwitter in too
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@AtlantaTax @fintaxdude @JLoBeanCntr Second both of these two shows, best two sci-fi shows I’ve watched the past 20 years. When you finish those Stargate SG1 is a classic
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@fintaxdude @JLoBeanCntr Expanse is excellent. Agree with @JLoBeanCntr it starts off s l o w.
If you like space operas and haven't seen the Battlestar Galactica early 2000s reboot - it's PHENOMENAL.
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#taxtwitter #fintwit anyone have any good sci fi recommendations? Thinking along the lines of aliens, event horizon, sunshine, etc. thanks! #movies #scifi
GIF
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