Don’t Overpay Your Taxes: Giving Thanks for Tax Planning Show Notes

Welcome to Episode 77 of The Guided Retirement Show. I’m your host, Dean Barber. We have a little bit of a different format for our podcast today. I’m going to get into today’s topic of not overpaying your taxes and giving thanks for tax planning, but I first want to talk about Thanksgiving in general.

There are so many things to be thankful for. I’m thankful to live in the greatest country in the world. There are so many opportunities that we all have. I’m thankful for the 35 years that I’ve been helping people get to and through retirement. Also, I’m thankful for all the advanced technology that allows me and my team to help so many more people than we ever thought possible.

Dean Is Thankful for Helping People to Not Overpay Their Taxes

I can also say that I’m thankful for the IRS and our government officials for creating an uber complex tax code. Our confusing tax code gives me and our tax team job security. That’s a little bit tongue in cheek, but so many people overpay their taxes every year and don’t even know it. They’re not overpaying their taxes because they have a tax return that has been prepared improperly. They’re overpaying their taxes because they’re missing opportunities.

Once one of our CFP® Professionals has completed your financial plan, one of our CPAs will review your financial plan for tax savings opportunities. The idea is to create a long-term, forward-looking tax strategy to help you pay as little tax as possible over your lifetime. We’re passionate about you not overpaying your taxes.

Have You Considered Qualified Charitable Distributions?

This is also that time of year when we start to think about our friends and family and how grateful we are for all the loved ones around us. And we start thinking about our charitable intentions and ways that we want to give back our community or special interests. Remember that if you’re giving to charity and are over 70½, the best way you can give is through a Qualified Charitable Distribution (QCD). With a QCD, the charity gets money directly from your IRA. When you give money directly from your IRA, that money that’s coming out doesn’t show up on your tax return.

Yes, Your Social Security Income Is Taxable

You might ask, “What’s the big deal about that, Dean?” Well, the big deal is that if you’re taking Social Security—which at 70½, you will be—any distributions that come out of your IRA can cause more of your Social Security to become more taxable. Distributions coming out of your IRA can also put you up into the next tax bracket, causing capital gains that would be tax-free to become taxable.

By giving through your IRA by way of a QCD, that IRA doesn’t show up on your tax return and the charity gets the money. You don’t get a deduction for it, but it’s even better than a deduction. Why? Because it doesn’t show up at all on your tax return. That sounds like a helpful way to not overpay your taxes, doesn’t it?

If you do QCDs and you’re new to doing QCDs, you need to remember that when you get your 1099-R from your custodian that your IRA is held, it’s not going to show your QCD there. So, you need to get documentation and get that to your tax professional so that they know what portion of your distribution went directly to charity. Then, they mark it on your tax return, but it doesn’t show up at all.

QCDs Can Help with Not Overpaying Your Taxes

Many of our clients are charitably inclined. They’ve been blessed and have done so well f
or themselves over their lifetimes and now give back to communities, churches, or other charitable causes that are near and dear to their heart. So, I’ll repeat. If you are over 70½, the most effective way that you can give to charity is through a QCD, especially with the new standard deductions being as high as they are under the current tax code.

There are many other charitable ways that you can give. You can see how QCDs and other charitable giving options fit within your financial plan by using our financial planning tool. This is the same financial planning tool that our CFP® Professionals use with our clients, and you can use it at no cost or obligation. Begin building your plan from the comfort of your own home by clicking the “Start Planning” button below.

START PLANNING

If you are interested in speaking with one of our CFP® Professionals or our CPAs, you can schedule a 20-minute “ask anything” session or complimentary consultation with them. They can meet with you in person, virtually, or by phone.

Giving Thanks for the Ability to Have Clarity, Confidence, and Control in Retirement

I’m so thankful to share my knowledge and educate you when it comes to all facets of financial planning. That includes tax planning and helping you to not overpay your taxes. But there’s so many other facets of financial planning as well. That includes risk management, estate planning, controlling risk in your investments, and making sure that you don’t run out of money over your lifetime. Our financial planning tool is designed to do all those things—setting you on a course for a successful retirement. And you can do it with clarity, confidence, and control.

I’m also thankful for my family and the health of my family. And again, we live in a great country. It’s easy to lose track of that if you watch the news. There are all kinds of negative things that are always being spun around out there. But step back for just a little bit. Take this time of year to reflect on how great we have it in the United States of America. Be proud to be a part of our great country.

I want to again thank all our listeners. Please make sure to share this episode and all our episodes with your friends, family, co-workers, and people that you think could benefit from some great financial education. We want all of you to live your one best financial life.

Don’t Miss the Last Episode of Season 7 of The Guided Retirement Show

I want to remind everyone that our next episode will be our last episode of the season. In tradition, what we usually do for the last episode of the season is answer your questions. And, of course, we’re always here to answer your questions. But this time, we’re going to flip it on its head for the final episode of the season. We’re going to give you 20 questions that you should be asking your financial advisor right now. So, make sure that you catch Episode 78, and thanks again for listening to The Guided Retirement Show.

Learn More About Modern Wealth Management

Sign up for our weekly newsletter which includes educational articles, videos, and more. It arrives in your inbox every Tuesday morning to keep you up-to-date.

Investment advisory services offered through Modern Wealth Management, Inc., an SEC Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.