When interest rates are low, intrafamily loans can be a good way to assist a relative (typically a child) with purchasing a house or a family business, and in certain circumstances they.
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Yesterday, ProPublica published an in-depth article titled “The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax.” Its goal was to show how the richest people in America are paying little or even no income tax. The authors stated that they had inside, confidential information and tax documents of thousands of the nation’s wealthiest people.
This claim is nothing new. A lot of people have cynically viewed it as a benefit of being rich: having the money to hire tax advisors and having assets to shift around in a manner that will minimize taxes.
5 Ways to Take Early Retirement Withdrawals Without Paying a Penalty
Paying taxes is unpleasant enough. Don t get hit with an early withdrawal fine.
This story originally appeared on NewRetirement.
Early retirement is a dream for many. However, a really early retirement is fairly rare. According to research published on LIMRA, only about 20% of all Americans retire in their 50s or before with most of those happening after age 55.
For those that do retire early, figuring out how to fund expenses can be challenging. One problem is that most of the retirement savings vehicles namely traditional 401(k)s and IRAs enforce a 10% penalty for any withdrawals made before age 59.5.
Timothy Barry
blumshapiro
One-size-fits-all has never applied to tax planning and that couldn’t be truer during a year when so many additional factors and uncertainties have come into play.
The novel coronavirus pandemic has impacted our lives in many ways, and that includes bringing the reality of mortality to the forefront. As such, it has acted as a trigger point for many to review estate planning strategies.
The low interest rate environment we are now in allows for the use of several techniques to transfer wealth to other family members at substantially reduced gift tax cost.
A Grantor Retained Annuity Trust (GRAT) is one such method. In brief, a GRAT is a financial instrument used in estate planning to minimize taxes on large financial gifts to family members. Under a GRAT, a person transfers property to an irrevocable trust for a specific period of time in exchange for annual annuity payments.