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☆ Here's what to know before taking your first required minimum distribution
▼ + stars: | 2024-12-06 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Grace Cary | Moment | Getty ImagesAfter decades of building your nest egg, you will eventually have to start taking required minimum distributions, or RMDs, from pretax retirement accounts. The first deadline is April 1 of the year after you turn 73, and Dec. 31 for future withdrawals. Pre-tax retirement withdrawals incur regular income taxes. Two required withdrawals in one yearIf you wait until April 1 after turning 73 to take your first RMD, you'll still owe the second one by Dec. 31. That can trigger unexpected tax consequences, according to CFP Abrin Berkemeyer, a senior financial advisor with Goodman Financial in Houston.

Persons: Grace Cary, Jim Guarino, Baker Newman Noyes, you'll, IRMAA, Berkemeyer Organizations: CFP Abrin, Goodman Financial, Medicare Locations: Woburn , Massachusetts, Houston

☆ This charitable giving strategy 'almost always' provides the biggest tax break, advisor says
▼ + stars: | 2024-11-27 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

The strategy "almost always has the highest tax advantage," compared to other giving options, said certified financial planner Sandi Weaver, owner of Weaver Financial in Mission, Kansas. QCD tax break is 'better than a deduction'When filing taxes, you must claim the standard deduction or your total itemized deductions, including charitable gifts, whichever is greater. That means most filers don't claim the charitable deduction. Higher AGI can trigger income-related monthly adjustment amounts, or IRMAA, for Medicare Part B and Part D premiums, Weaver explained. There's a two-year lookback, meaning 2024 premiums are based on MAGI from your 2022 tax return.

Persons: Sandi Weaver, Juan Ros, Weaver, There's Organizations: Weaver, Secure, Financial Management, Medicare Locations: Mission , Kansas, Thousand Oaks , California

☆ Here's how to maximize your tax breaks for charitable giving
▼ + stars: | 2024-11-26 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

Here's what to know about charitable tax breaks before swiping your credit card or transferring funds, according to financial advisors. How the charitable deduction worksWhen filing taxes, you claim the standard deduction or your total itemized deductions, whichever is bigger. The latter includes a tax break for charitable gifts, medical expenses and state and local taxes, or SALT, among others. For 2024, the standard deduction is $14,600 for single taxpayers and $29,200 for married couples filing together. Plus, you can satisfy yearly required minimum distributions, or RMDs, with a QCD, according to the IRS.

Persons: Indiana University Lilly, Paula Nangle, Donald Trump, Nangle, filers, Sandi Weaver, Weaver, Juan Ros Organizations: Indiana University, Indiana University Lilly Family School, Marshall Financial, President, Weaver Financial, Medicare, Financial Management Locations: Doylestown , Pennsylvania, Mission , Kansas, Thousand Oaks , California

☆ Social Security beneficiaries to soon receive notices revealing the size of their 2025 benefit checks
▼ + stars: | 2024-11-20 | by ( Lorie Konish | ) www.cnbc.com time to read: +3 min

Westend61 | GettyA new 2.5% cost-of-living adjustmentIn 2025, retirement benefits will increase by about $50 per month, on average, according to the Social Security Administration. Medicare Part B premiums are often deducted directly from Social Security checks. Beneficiaries can also request to have Medicare Advantage or Part D premiums deducted from Social Security benefit payments, according to Mary Johnson, an independent Social Security and Medicare analyst. Income changes may prompt higher taxesSocial Security beneficiaries may request to have withholding for federal taxes deducted from their benefit payments. Social Security benefits are taxed on a formula called combined income — the sum of adjusted gross income, nontaxable interest and half of Social Security benefits.

Persons: Joe Elsasser, Mary Johnson, Jim Blair, Brian Vosberg Organizations: Getty, Social Security Administration, Social Security, Medicare, Centers, Services, Social, Premier Social Security Consulting, Security, Vosberg Wealth Management Locations: Glendora , California

☆ Roth conversions are up in 2024 — but it's not always a 'slam dunk,' accountant says
▼ + stars: | 2024-05-28 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

Roth individual retirement account conversions are up in 2024 — but there are key things to know before converting funds, experts say. There was a 44% year-over-year increase in the number of Roth conversions during the first quarter of 2024, according to data from Fidelity Investments. Roth conversions transfer pretax or nondeductible individual retirement account funds to a Roth IRA, which provides future tax-free growth. However, "it isn't a slam dunk for everyone" because it takes time for tax-free growth to exceed your upfront tax bill, said Marianela Collado, a certified financial planner and CEO of Tobias Financial Advisors in Plantation, Florida. Here’s how much you can saveInvestors need "sufficient assets" outside of retirement accounts to cover the upfront tax bill, warned Collado, who is also a certified public accountant.

Persons: Roth, Marianela Collado, Collado, You'll Organizations: Fidelity Investments, Roth IRA, Financial, Finance, Medicare Locations: Plantation , Florida

☆ Here’s where to invest your cash to save on taxes in 2024
▼ + stars: | 2023-12-04 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

"While any additional income earned from higher yields is taxed at a progressively higher rate, IRMAA applies as a surcharge," he said. "This means that even $1 of additional income could trigger higher premiums." With terms ranging from one month to one year, most Treasury bills, known as T-bills, are currently paying well over 5%, as of Dec. 4. However, T-bills offer a tax benefit over products like high-yield savings, certificates of deposit or money market funds: no state or local taxes on earnings. T-bill interest is still subject to federal income taxes.

Persons: Eric Audras, Mullikin, Catherine Valega Organizations: PhotoAlto, Getty, Medicare, Green Bee Locations: Boston, TreasuryDirect

☆ Retirees will pay more for Medicare Part B premiums in 2024. What to know about managing those costs
▼ + stars: | 2023-11-06 | by ( Lorie Konish | ) www.cnbc.com time to read: +1 min

Social Security beneficiaries will soon get notices showing exactly how much money to expect in their monthly checks for 2024. Those recipients are slated to get a 3.2% boost to their benefits starting in January with the 2024 annual cost-of-living adjustment. One factor that will affect exactly how much beneficiaries receive is their Medicare Part B premium, which is typically deducted directly from Social Security checks. More from Personal Finance:Will Social Security be there for me when I retire? Standard monthly premiums are slated to rise by $9.80 per month to $174.70 in 2024, from $164.90 per month this year.

Organizations: Social Security, Finance, Will

☆ Year-end tax strategies may affect how much retirees pay for Medicare. Here's what to know
▼ + stars: | 2023-10-12 | by ( Lorie Konish | ) www.cnbc.com time to read: +4 min

The change will result in an estimated Social Security retirement benefit increase of more than $50 per month, on average. The average monthly retirement benefit for workers will be $1,907, up from $1,848 this year, according to the Social Security Administration. "But remember, depending on your income, you may also be paying a lot more for Medicare," Franklin said. Medicare Part B premiums are based on incomeMedicare Part B covers physician services, outpatient hospital services, some home health care services, durable medical equipment and certain other services not covered by Medicare Part A. Medicare Part B premiums for 2024 have not yet been announced. This strategy may help reduce adjusted gross income and future Medicare premiums, Franklin said.

Persons: Mary Beth Franklin, Franklin, Roth Organizations: Social, Social Security Administration, Social Security, CNBC, Medicare Locations: Franklin

☆ Paying Extra for Medicare? See If You’re Due a Refund
▼ + stars: | 2023-08-25 | by ( Laura Saunders | ) www.wsj.com time to read: 1 min

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. https://www.wsj.com/personal-finance/taxes/irmaa-medicare-surcharge-refund-rebate-4ca564ea

Persons: Dow Jones

☆ As a record 8.7% Social Security cost-of-living increase starts in 2023, here's what beneficiaries should look for in annual statements
▼ + stars: | 2022-12-11 | by ( Lorie Konish | ) www.cnbc.com time to read: +4 min

Kathrin Ziegler | Digitalvision | Getty ImagesMonthly Part B premium payments are often deducted directly from Social Security checks. Due to the lower 2023 premiums, beneficiaries are poised to see more of the 8.7% increase in their monthly Social Security checks. "Of course, the economy is inflated at a frightful rate, but this represents the value of cost-of-living adjusted benefits from Social Security," Freitag said. What to look for in your Social Security statementJustin Paget | Digitalvision | Getty ImagesIf you're wondering how much more you stand to see in your checks, the personalized letter from the Social Security Administration will give you a breakdown of what to expect. Of note, you do not necessarily have to be receiving Social Security checks now to benefit from the record 2023 increase, Blair noted.

☆ Higher-income Medicare beneficiaries may face smaller premium surcharges in 2023. Here are tips for reducing or avoiding those extra amounts
▼ + stars: | 2022-09-29 | by ( Sarah O'Brien | ) www.cnbc.com time to read: +5 min

Shapecharge | E+ | Getty ImagesIf you're a higher-income Medicare beneficiary, you may be paying less in extra premium charges in 2023 than you were this year. The higher your income, the higher the charge. "You pay a little more now to avoid higher tax brackets or IRMAA brackets later on," Meinhart said. RMDs are amounts that must be withdrawn from traditional IRAs, as well as both traditional and Roth 401(k) accounts, once you reach age 72. For investments whose sale you can time, it's also important to remember the benefits of tax-loss harvesting as a way to minimize your taxable income.

☆ New retirees may face surcharges for Medicare premiums. Here's how to appeal paying extra if your income has dropped
▼ + stars: | 2022-09-22 | by ( Sarah O'Brien | ) www.cnbc.com time to read: +2 min

Ronnie Kaufman | DigitalVision | Getty ImagesHow much Medicare surcharges could cost youFor 2022, IRMAAs kick in for individuals with modified adjusted gross income of more than $91,000. Based on this year's standard monthly premium of $170.10, that results in IRMAA-affected beneficiaries paying premiums ranging from $238.10 to $578.30. This year, 5.3 million Medicare beneficiaries paid Part B IRMAAs and an estimated 6.8 million will do so in 2023, according to the latest Medicare trustees report. For Part D, 4.5 million beneficiaries are subject to IRMAAs this year and an estimated 5.8 million will pay the surcharge in 2023. Wait for a 'benefit determination letter' before appealingIf you think your new income would result in paying no surcharge or at least paying less, it's worth appealing.

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