Posts by Mark Henricks
Financial Advisor
Form 1099-INT: What Is It, Who Files It and Who Gets It?
When tax season rolls around, one of the most common documents taxpayers receive is Form 1099-INT. This form, issued by banks, credit unions and other financial institutions, reports interest income earned over the tax year. If you’ve earned at least $10 in interest, you can expect to receive a Form 1099-INT from the institution that… read more…
Financial Advisor
Form 1099-B: What Is It, Who Files It and Who Gets It?
Form 1099-B is a tax form issued by brokers or barter exchanges to both the IRS and the taxpayer. It provides details about sales of stocks, bonds, or other securities. Typically, brokers are responsible for filing this form with the IRS, while investors receive a copy. Investors then use the information on the form to… read more…
Financial Advisor
Form 1310: How to Claim a Refund for a Deceased Taxpayer
Form 1310, officially known as the “Statement of Person Claiming Refund Due a Deceased Taxpayer,” is a document that allows you to request a tax refund on behalf of someone who has passed away. If you are an executor or personal representative of a deceased individual, you may need to know to properly complete and… read more…
Financial Advisor
Form 1095-C: What Is It, Who Files It and Who Gets It?
Form 1095-C is a tax form many larger employers have to send to their full-time employees, detailing the health insurance coverage offered to them. This document confirms whether an employee was offered health insurance and provides information about the coverage itself, including the months it was available. Employees need this form to verify their health… read more…
Financial Advisor
How the Alternative Minimum Tax (AMT) Affects Stock Options
Stock options can be a powerful tool for wealth building, but they come with tax implications that many investors overlook—especially when it comes to the Alternative Minimum Tax (AMT). This parallel tax system was designed to ensure that high-income earners pay a minimum level of tax, but it can unexpectedly impact employees who exercise incentive… read more…
Financial Advisor
Complete Guide to California’s Alternative Minimum Tax (AMT)
California’s tax system is complex, and for certain taxpayers, the Alternative Minimum Tax (AMT) can add an extra layer of financial obligation. California’s AMT operates alongside the state’s standard income tax. It employs a separate calculation that disallows many common deductions. If your income exceeds certain thresholds or includes specific tax preferences—such as incentive stock… read more…
Financial Advisor
What Are the Tax Rates for the Alternative Minimum Tax (AMT)?
The Alternative Minimum Tax (AMT) is a parallel income tax system designed to ensure that high-income individuals pay a minimum level of tax, regardless of deductions and credits that might otherwise lower their tax liability. Unlike the regular income tax, which has a progressive structure with several tax brackets, the AMT operates under a separate… read more…
Social Security
I’m Going to Earn $3,400 per Month in Social Security. How Can I Reduce My Taxes on It?
Many people don’t owe federal income taxes on their Social Security retirement benefits. However, with $3,400 in monthly benefits, you could be one of the many people who do have to pay taxes on this income. From zero to 85% of your benefit income may be taxed as ordinary income, depending on your filing status… read more…
Financial Advisor
Texas Corporate Tax: What It Is and How It Works
Unlike many states, Texas does not impose a traditional corporate income tax. Instead, it levies a franchise tax, which is a type of gross receipts tax. This means that businesses are taxed based on their total revenue rather than their net income. The franchise tax applies to most entities, including corporations, limited liability companies and… read more…
Financial Advisor
How Is IRS Section 1245 Used for Real Estate Taxes?
IRS Section 1245 determines how certain types of property are taxed upon sale. Specifically, it deals with recapturing depreciation on personal property and specific kinds of real estate. When applicable, this rule can significantly impact the tax liabilities of property owners. When a property that has been depreciated is sold, IRS Section 1245 requires that… read more…
RMDs
I’m Starting IRA Withdrawals at Age 65. Will They Count Toward My RMDs Later?
Withdrawals from an IRA that start before required minimum distributions (RMDs) are due can reduce the amount of your future RMDs, although not on a dollar-by-dollar basis. RMDs are calculated based on the balance in your retirement account, not on previous withdrawals. However, by reducing the balance in your account, early withdrawals can reduce the… read more…
Advisor Fees & Costs
I Have $1.4 Million Invested with My Advisor Who Charges a 1% Fee. Am I Paying Too Much?
The fee your advisor charges is based on the services you’re receiving, the individual advisor’s fee structure and other factors, including the amount of money you have to invest. With $1.4 million invested, many advisors would likely charge about 1% of the account balance as an annual fee. However, this could vary widely among advisors.… read more…
Rollovers & Conversions
I’m 62 With $850k in My 401(k). Is It Too Late for a Roth Conversion?
You can perform a Roth conversion at any age, and potentially boost your retirement income. However, this strategy often produces more positive results the sooner it’s done. One reason is that you have to pay taxes on converted funds at the time of the conversion. After all, money sent to the IRS can’t be invested… read more…
Retirement Planning
I’m 65 With $1.1 Million in My 401(k) and IRA and a $2,800 Social Security Check. What’s My Retirement Budget?
A retirement budget has two major parts: income and expenses. Income can come from many sources, including Social Security or pension retirement benefits, annuity payments, investment interest and retirement account withdrawals. Expenses are the money you spend those funds on, such as housing, transportation, utilities, food and healthcare. Since budgeting involves forecasting, precision can be… read more…
Retirement Planning
What’s a Realistic Retirement Budget? I’m 62 With $890k in a 401(k), $115k in a Roth IRA and I’m Eligible for Social Security.
During most of the decades you are preparing financially for retirement, you are likely focused on saving as close as you can get to the recommended amount, without worrying too much about the details. As you approach retirement, however, it’s a good idea to look more closely at what might be a realistic retirement budget.… read more…
Retirement Planning
I’m 60 With $960k in an IRA, $300k in a 401(k) and Would Expect a $2,400 Social Security Check. Can I Retire at 62?
Many 60-year-olds with $960,000 in tax-deferred retirement accounts and a work history that will entitle them to $2,400 monthly from Social Security could probably retire in two years. However, much depends on circumstances. Individual lifestyle preferences, including local cost of living and plans for travel or other potentially costly recreational activities, could mean that delaying… read more…
Pensions & Other Retirement Accounts
Should I Take a $115,000 Lump Sum or Opt for $820 Monthly Annuity Payments?
If you are facing the choice between a large lump sum or monthly payments, you’ll likely want to consider several key factors before making a decision. One concern is when you will receive the money, since getting $115,000 up front will allow you to invest it sooner and earn money from it over a longer… read more…
Retirement Planning
What’s a Realistic Retirement Budget? I’m 58 With $665k Saved, Making $95,000 Annually.
A retirement budget balances your expected income in retirement with your expected living expenses and taxes. Financial planners may use some rules of thumb to generate estimates of how much you are likely to receive in income and use to pay your costs after getting a good understanding of your goals, habits and circumstances. In… read more…
Retirement Planning
With $715k in a Roth IRA and $3,400 Monthly Between My Pension and Social Security, Can I Retire at 64?
Retirement becomes financially feasible when projected income exceeds projected expenses. Retiring at age 64 with $715,000 in a Roth IRA and $3,400 monthly in combined pension and Social Security benefits could be realistic based on typical investment returns and retiree expenses. However, this may not be true for everyone. Your current age, life expectancy, lifestyle… read more…
Financial Advisor
I’m Selling My House and Will Net $375k in Profit. Will I Owe Capital Gains Taxes?
A home seller may not owe any capital gains taxes on sale of a principal residence if the transaction qualifies for the Section 121 exclusion. However, under certain circumstances the seller may owe capital gains tax on at least part of the gain. It’s also possible for the entire gain to be taxed as ordinary… read more…
Rollovers & Conversions
I’m 69 With $760k in a 401(k). Should I Convert 25% per Year to a Roth IRA to Avoid RMDs and Taxes?
Converting 401(k) savings to a Roth IRA can free you from having to take mandatory withdrawals at age 73 and beyond. Because Roth withdrawals are tax-free, any voluntary withdrawals you take won’t be subject to income taxes. However, Roth conversion comes with a significant current tax bill. So, whether a staggered conversion over the next… read more…
How to Invest
Can a Financial Advisor Help Me Invest in Private Companies?
Most individual investors cannot invest in private companies that have issued shares of stock without registering the shares with the Securities and Exchange Commission. The exception is someone who meets the income, net worth or financial sophistication requirements to be an accredited investor. Many financial advisors qualify as accredited investors because of their professional training,… read more…
Social Security
I’m Going to Get $2,600 a Month From Social Security. How Can I Reduce My Taxes on It?
Retired people who get monthly Social Security payments may owe income tax on a portion of the benefits depending on their income and filing status. The amount of benefits exposed to taxes is determined based on income and filing status, and may range from 0 to 85%. The taxes applied to your $2,600 monthly benefit… read more…
Health Insurance
Average Cost of Retirement Health Insurance for Ages 62 – 65
If you buy health insurance independently instead of obtaining from an employer or government program, your monthly premiums will increase markedly as you get older. As you approach retirement, in fact, you’ll find yourself paying premiums up to three times what younger insured people pay for plans. An estimate from the Urban Institute, for example,… read more…
Other
How Much Does the Average Estate Sale Make?
According to EstateSales.net, a company that services the industry, the average estate sale brings in more than $18,000. Commissions and fees could be around 35%, which would leave the seller with just under $12,000. Estate sale companies oversee many sales, helping to organize, catalog, price and display items as well as advertise and conduct the… read more…