Tax surprises can stem from numerous small financial decisions. Consulting a CPA or advisor before selling investments, withdrawing retirement funds, or filing jointly can prevent costly mistakes. Estimated tax penalties have tripled, totaling $4.8 billion in FY 2024 due to underpayment from various financial moves.
Selling investments without considering tax timing can lead to higher brackets. Coordination with a financial professional before acting prevents financial surprises. Mistakes in required minimum distributions can now result in a 25% penalty, down from 50%, but still hurt if calculated incorrectly.
Selling investments held for under a year can lead to higher tax rates. Waiting longer lowers long-term capital gains rates, saving money. Withdrawing from retirement accounts strategically before RMDs kick in can benefit taxpayers in lower brackets. Harvesting tax losses can offset capital gains and save on taxes.
Planning between retirement and age 73 can smooth out taxable income. Missing RMD deadlines can result in a 25% excise tax. Married couples can benefit from joint tax filing and strategic retirement contributions. Communication with tax professionals can prevent costly tax surprises.
Small financial decisions can add up to tax surprises. Consulting a CPA or financial advisor before making major financial moves is key to avoiding IRS bills. Strategic planning can significantly impact tax liabilities for individuals and couples. 1. The stock market experienced a significant drop today, with the Dow Jones Industrial Average falling by over 500 points. Investors are concerned about rising inflation and interest rates, leading to a sell-off in tech and growth stocks.
2. In other news, new data shows that the unemployment rate has dropped to 4.6%, the lowest it has been in over a year. This is a positive sign for the economy as more people are returning to work following the pandemic.
3. A new study has found that over 70% of Americans have received at least one dose of the COVID-19 vaccine. This milestone is a major step towards reaching herd immunity and controlling the spread of the virus.
4. The Biden administration has announced plans to invest $2.3 trillion in infrastructure projects over the next eight years. This initiative aims to create jobs, improve transportation systems, and address climate change concerns.
5. In international news, tensions continue to rise between Russia and Ukraine as Russian troops amass along the border. The United States and European allies are closely monitoring the situation and calling for a peaceful resolution to the conflict.
Read more at Yahoo Finance: How Small Financial Choices Can Lead to Huge Tax Bills