• Home
  • About
    • Rave Reviews
  • Services
    • For Individuals
      • Estate Planning Done Right
    • For Small Businesses
    • Tax Problem Resolution
      • "Innocent Spouse" IRS Relief
      • Bankruptcy Options That Work
      • Find Out What The IRS "Has" On You
      • Non-Filed Returns--Done For You
      • Payroll Tax Protection
      • Protection from IRS Asset Seizure
      • Protection From IRS Levies
      • Protection From Wage Garnishments
      • Safeguard Yourself From IRS Liens
      • Settle Your IRS Debt for Pennies on the Dollar
    • Tax Services
      • IRS Representation For You
      • Tax Planning For Big Savings
      • Tax Preparation Done Right
    • Additional Services
  • Tools & Resources
    • Financial Calculator Gallery
    • Refund Tracker
  • Contact Us
  • Blog

Call Now: (770) 984-8008

Email E. Dennis Bridges, CPA

Tax Planning in Action

As a planner, I hate speculation. I would much rather plan for what I can control, and harvest the fruits without surprise.

And that’s exactly what we do with our clients — at least with those who are smart enough to take us up on it — we PLAN for the upcoming tax season so there are no nasty surprises come tax time, and for many even, a few nice little perks.

Last week, we discussed the various steps you can take to prepare in advance for tax season, and to consider making decisions NOW that can affect how your tax return actually turns out.

Because sure — it’s nice to be “prepared” so that the tax preparation process is easy. But it’s even NICER to be able to be proactive about saving yourself from having to pay too much tax.

As it is often said, there really are two different tax codes in this country: one for those who don’t bother to have someone help them use it, and another for those who take advantage of every legal, ethical and available deduction to help them save.

Tax planning can (and should) impact many financial decisions. Like how you might consider funding various kinds of retirement accounts — and how different tax implications should be considered as you do.

Along those lines today, I’d like to give you just one small example of how you can be utilizing the “other” tax code to avoid having to pay unnecessary taxes on your hard-earned assets.

Dennis Bridges’

“Real World” Personal Strategy Note

One Example of Simple Tax Planning

“What we know is a drop, what we don’t know is an ocean.” – Isaac Newton

Too many folks wait until the winter before they look at their tax obligations. Even worse, too many even among our clients wait until that season before they speak with us in any kind of proactive way.

That’s a problem, and it could be costing you some serious savings.

Here’s an example:

Let’s say that you were considering taking money out of a pension (401k) to finance the down payment on a house.  It’s quite a common maneuver. But let’s say next that you do this withOUT discussing it ahead of time with a professional. That could be a four (or five) figure mistake.

If you were to come into our offices before such a move, I would ask you a few easy, but very important questions, and then (depending on the answer) likely advise you to first roll the money ($10,000) into a Traditional IRA.  You could then withdraw the money at a savings of $1,000.00. This is because money used for a first home, up to $10,000, is penalty-free when taken from an IRA, but NOT a 401K.

Would you be pleased by that move? I’d guess “yes”, especially if you knew about some other local folks I know of, who failed to plan. This couple just learned of the $41,000.00 penalty they had to pay for doing the same thing, but from their 401k.

Ouch.

Other “penalty-free” withdrawal opportunities (I should note here: these are NOT “tax-free”, but penalty-free):

* Unreimbursed medical bills — The government will allow investors to withdraw money from their qualified retirement plan to pay for unreimbursed deductible medical expenses that exceed 10 percent of adjusted gross income. (401k or IRA)

* Total and permanent disability (401k or IRA)

* Health insurance premiums after 12 weeks of unemployment (IRA only)

* Death (401k or IRA)

* Higher education costs (IRA only)

There are a few other obscure situations available, but again — these decisions are best made under consultation.

More from my site

  • Ill-gotten GainsIll-gotten Gains
  • So grateful for you … So grateful for you …
  • A salve for all this chaosA salve for all this chaos
  • True Confessions, Case #5281—“Don’t Let This Happen to You”True Confessions, Case #5281—“Don’t Let This Happen to You”
  • Common Self-Preparation ErrorsCommon Self-Preparation Errors
  • Attention Greater Atlanta Tax Payers: Identity Thieves Want YOUR Tax ReturnAttention Greater Atlanta Tax Payers: Identity Thieves Want YOUR Tax Return
This entry was posted on Wednesday, January 3rd, 2018 at 4:43 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

New Strategy Posts for your Finances

Looking Ahead to 2019 Taxes

Looking Ahead to 2019 Taxes

You have your 2018 tax return filed, or perhaps on extension, and now it is time to look forward to [...]
How Does Combining a Vacation with a Foreign Business Trip Affect the Tax Deduction for Travel Expenses of a Self-Employed Individual?

How Does Combining a Vacation with a Foreign Business Trip Affect the Tax Deduction for Travel Expenses of a Self-Employed Individual?

Article Highlights: Primarily Business Primarily Vacation Special Circumstances Foreign C[...]
Student loans --- YECH!

Student loans --- YECH!

As a general rule, most debt isn't helpful to you. In fact, I could probably state that more clearly[...]
We Love Sharing Good News: A Happy Tax Story

We Love Sharing Good News: A Happy Tax Story

Here at Team Bridges, we love cutting income taxes for you, just so you can keep a LOT more of your[...]
Four Good Reasons To Give, No Matter The Tax Deduction

Four Good Reasons To Give, No Matter The Tax Deduction

"When in doubt as to what you should do, err on the side of giving." - Tony Cleaver As often is [...]
Tweets by @EDBridgesCPA

Rave Reviews

Always helpful and friendly

December 7th, 2013

"Tim and I couldn’t be happier with what Dennis and his whole office have done for us with our taxes[...]

I saved more

December 7th, 2013

“I saved more taxes in one hour with Dennis’ strategies than I did with my previous accountant in th[...]

He saved us over $5000

December 7th, 2013

"Somebody told me about Dennis Bridges so I figured I’d give him a try. We had about the same gross [...]

He understood my situation

December 7th, 2013

“I would’ve never believed it if I didn't see it with my own eyes… I owed the IRS over $54,000 for s[...]

Latest Posts

  • Looking Ahead to 2019 Taxes
  • How Does Combining a Vacation with a Foreign Business Trip Affect the Tax Deduction for Travel Expenses of a Self-Employed Individual?
  • Student loans — YECH!
  • We Love Sharing Good News: A Happy Tax Story
  • Four Good Reasons To Give, No Matter The Tax Deduction
  • Resisting Financial Automation
  • What to Do When You’re A Saver and Your Spouse is a Spender (or Vice Versa)
  • Making Money Work In a Marriage
  • Tax Tips for First Time Return Filers
  • Ill-gotten Gains

Get our
Exclusive Free Report:

 

"The Top 5 Personal Tax-Saving IRS 'Secrets' For Surviving Tough Economic Times"

 

We'll also add you to our popular, weekly

Real World Strategy Notes

 
Interesting Image
 
 

SECURE & CONFIDENTIAL Your information will never be rented, traded or sold. We guarantee your confidentiality. We hate those spam criminals even more than you do! You will receive the promised report, as well as timely strategies for growing your personal or business finances.

E. Dennis Bridges, CPA | 234 Creekstone Ridge, Woodstock, GA 30188 | (770) 984-8008

© Copyright 2014 – E. Dennis Bridges, CPA – All Rights Reserved