November 23, 2020

2020 Taxes Changes

2020 Taxes Changes attacks freight train is bearing down on your retirement to protect yourself you'll have to harness the power of zero hello there David McKnight here with the power of zero show hope you're doing great thanks for. Carving off a little portion of your day to learn more about the power of zero paradigm once again. I am the best-selling author of the power zero look before you lurk, and the volatility shield and I'm happy to report that coming in January of 2021 I've just signed a, acceptance offer with penguin Random House to do a follow up book on the power of zero it's going to really draw everything, into one unified strategy so that you understand exactly how all your money is going to be worked working in a cohesive and unified. Way to get you to the zero percent tax bracket to help you mitigate tax rate risk longevity risk in a very very satisfying, and unified way so you're really gonna want to look out for that unfortunately these things just. Take a really long time I'll probably have the book finished in the next couple months it's already completely outlined I know. Exactly what every chapter says but. Penguin Random House they're their big five publisher and they move at a snail's pace which I suppose is good because they don't want to just throw something out there after having worked on, it for a month they're very methodical they want to make sure that everything's perfect before they they roll it out, to the world so be looking for that January 2021 of course I'll be podcasting about. A lot of what we talk about on that book between now and then if you are looking for copies of my book and. My of any of my books be its power of zero look before you lurk or volatility shield, you can get those at powers your calm forward-slash books power zero for its power to zero calm forward-slash, books i would really love it if you gave me a follow, on twitter it's at McKnight & Co at McKnight and Co and last but not least would love it if you, put some reviews of books online they really do help they really do help people who are checking our books out online understand, that they need to take our book seriously because there are a lot of positive reviews oh one other thing Doug orchard. The director of powers you know the text rain is.

Coming is rolling out his his offer to be able to buy bulk amounts of streaming's of the movie you can buy four hundred at a time for five dollars per, per stream you can post those on your website you can send. Them out to friends or clients or what have you and they can actually listen or watch the movie and as they watch the movie your your view count goes. Down then he lets you know when you hit about 50 or so you, can go to the tax train calm the attacks train calm to learn more about that well we are in the new. Year and with the new year of course come important changes to, the IRS tax code to income contribution limits to sorry income limits to contribution limits of all the various thresholds that we have to know about when it comes to power to your plan, and remember when it comes to the power of zero you, have to know what these different thresholds are because you could violate a threshold on the one hand that forces you to. Pay attacks on the other hand so you'd have to be keenly aware. Of all these little pitfalls that are more like landmines really that are scattered all over the place of course we're helped here to help you circumnavigate those those pitfalls in those landmines first of, all let's start off with the Roth IRA. The the new income contra the income threshold at which point your.

Ability to contribute to Roth IRAs gets phased out it's now for a single person it's 124 to 139 and for a married couple it's 196 to 206, hundred ninety six thousand two hundred six thousand now remember how this works is let's say your married couple and you, have income 201,000 modified adjusted gross income okay and because you're halfway through that phase-out range remember. It's 196 to 206 you are 5,000 into that $10,000 phase-out range your ability to contribute to the Roth. IRA gets cut in half okay both for you and for your spouse so instead of being able to contribute the $7000 you and your spouse would only be able to contribute $3500 each. That's how that phase-out works so just be aware, of that as you're contemplating I know it's it's tough to even figure out ahead of time what's your contribution limit or what your income is going, to be in a given year that the nice part about the Roth IRA is you have up until April 15th of the following, year to figure out if, you're going to contribute okay so you can get a fair idea of what your modified adjusted gross income is going to be and whether you're violating any of these thresholds, or not I wish I could say it we're that easy for the Roth conversion with the Roth. Conversion you have to decide whether you're going. To do it before December 31st and if you sort of guesstimate and and and sometime in January said man I wish I didn't do that you can no longer go back in time and change that, you can no longer go back and modify your tax return and recharacterize that Roth conversion. So you have the you have the onerous task of trying to figure out if, a Roth conversion is number 1 something you should do number 2 up, to what income tax bracket should you be converting in order to maximize that that Roth conversion in any given year ok let's. Move on to 401ks this has changed a little bit you can now if you're younger than age 50 you can now contribute 19500, which is up from nineteen thousand and twenty nineteen or you can contribute twenty six thousand dollars if you're over age 50 that's up from 25 in 20:19. So these are positive things especially when you consider that that applies to the Roth, 401k as well you can now contribute massive amounts of money to these tax-free vehicles which I'm obviously encourage.

That you do I'm as you know a big fan of Roth IRAs Roth 401 k's Roth conversions anything with the word Roth in, them I think is something. You should take a look at given what we talked about last week we're marching into a financial apocalypse I don't want to over try to overstate my case here but. We are marching into a future that looks very very grim very very daunting and very very sobering and the least you can do is try. To protect yourself from the impact of tax rate risk because tax.

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