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Tackling Taxes in '26: How They Can Be Used as a Blueprint · Money In Motion with Klaas Financial

• 0:00
  Speaker 1: And our phone lines are open for you right now
• 0:02
  Speaker 1: at six oh eight three two one thirteen ten. That's
• 0:05
  Speaker 1: six oh eight three two one thirteen ten gets you
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  Speaker 1: right on the air with our retirement planning professionals from
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  Speaker 1: Class Financial, joined this week by Eric Schwartz and Jenny Doity.
• 0:15
  Speaker 1: Of course, you can learn more about Eric, Jenny and
• 0:18
  Speaker 1: the whole team at Class Financial on their website.
• 0:20
  Speaker 2: It's a great one.
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  Speaker 1: Class Financial dot com. That's Class klaas Financial dot com.
• 0:26
  Speaker 1: From the website. Not only again can you learn more
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  Speaker 1: about the team. You can learn more about Coss Financial.
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  Speaker 1: You can listen back to this and previous shows podcast.
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  Speaker 1: You can also schedule a complementary conversation right online at
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  Speaker 1: clossfinancial dot com. Or you can give them a call
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  Speaker 1: six oh eight four four two five six three seven.
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  Speaker 1: No charge for that initial gets no your appointment tech
• 0:45
  Speaker 1: Coss Financial. It will be complementary to you again their
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  Speaker 1: number six oh eight four four two five six three seven.
• 0:52
  Speaker 1: I be talking this week about the difference between tech
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  Speaker 1: filing and tax planning, which is uh uh. They are
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  Speaker 1: obviously very much related, but there is a big, big difference.
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  Speaker 1: Before we get rolling though, on this week's conversation. Let's
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  Speaker 1: welcome in our retirement planning professionals from Class Financial, Eric
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  Speaker 1: Schwartz and Jenny Doty.
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  Speaker 2: Eric, how you doing this morning?
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  Speaker 3: I am doing great, Sehn, how you doing today?
• 1:15
  Speaker 2: I can't complain at all. Jenny, great to have you back.
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  Speaker 4: How have you been, Hi, it's good to be here.
• 1:22
  Speaker 4: I've been well.
• 1:22
  Speaker 3: Thank you.
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  Speaker 2: It's great to have both of you along.
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  Speaker 1: And as mentioned, we're going to be talking about kind
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  Speaker 1: of turning your tax return into a blueprint for next
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  Speaker 1: year and a successful year on that front. Will do
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  Speaker 1: that in just a moment. Before we start that conversation, though, Eric,
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  Speaker 1: let's take a look back at last week's show. Of course,
• 1:38
  Speaker 1: each and every week a chance to win a fantastic
• 1:40
  Speaker 1: prize from our friends at Class Financial. This week, no exception,
• 1:43
  Speaker 1: a twenty five dollars gift card from Amazon with the
• 1:47
  Speaker 1: Class Quiz question week we will do one later this morning.
• 1:50
  Speaker 1: Tell you a little bit about the details later on
• 1:52
  Speaker 1: the program, but I will tell you listen closely because
• 1:54
  Speaker 1: just about every show the question answer come up. And
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  Speaker 1: before we start talking taxes, Eric, let's actually roll back
• 1:59
  Speaker 1: to last week's show, get the question and answer there
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  Speaker 1: as well.
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  Speaker 5: Absolutely Thank you everybody as always for listening and for
• 2:07
  Speaker 5: those who are calling in with answers to our questions.
• 2:10
  Speaker 5: Congratulations to William who was our winner from last week.
• 2:14
  Speaker 5: And last week's question was true or false? Timing the
• 2:17
  Speaker 5: market is easy to do and should be implemented as
• 2:20
  Speaker 5: a long term investment strategy, and the answer to that
• 2:24
  Speaker 5: is false.
• 2:25
  Speaker 1: It feels like it's a Homer Simpson quote. I could
• 2:30
  Speaker 1: just see a little bubble with Homer saying that. Lenya, Absolutely,
• 2:34
  Speaker 1: it was a great program as always, and make sure
• 2:37
  Speaker 1: if you haven't had a chance Checkoutclassfinancial dot com.
• 2:39
  Speaker 2: You do that, you can listen back to that podcast
• 2:42
  Speaker 2: right there.
• 2:42
  Speaker 1: So on today's show, we're going to be talking about
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  Speaker 1: tax returns and you know how this year, the twenty
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  Speaker 1: your most recent one, can be used as a tax
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  Speaker 1: and financial planning tool. And Eric, what do you mean
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  Speaker 1: when you say that, Like, when we talk about using
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  Speaker 1: your tax return as a financial planning tool.
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  Speaker 2: What's going on there?
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  Speaker 5: It's a great question, Sean. I think it's not the
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  Speaker 5: first thing that comes to mind when when people think
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  Speaker 5: about tax season or their tax forms, but when we're
• 3:10
  Speaker 5: talking about tax filing versus tax planning, they are related
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  Speaker 5: in that if we are doing a good job of
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  Speaker 5: tax planning, it's hopefully going to make our tax filing
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  Speaker 5: a much more or a much less painful process. I
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  Speaker 5: was going to say much more enjoyable process, but that's
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  Speaker 5: certainly not it. You know, we typically think of the
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  Speaker 5: tax return as a compliance requirement that kind of pops
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  Speaker 5: up this time of year, and today we're going to
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  Speaker 5: be We're going to be describing several components of or
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  Speaker 5: lines on your tax return that can give you some
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  Speaker 5: very helpful information to consider as you meet with your
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  Speaker 5: financial advisor during the year. And to do that, I
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  Speaker 5: brought my colleague Jenny Doty on the show today. She
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  Speaker 5: is a tax specialist here at CLOSS and she's going
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  Speaker 5: to be offering her perspectives on the topic.
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  Speaker 3: So, Jenny, thank you for being here today.
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  Speaker 4: Thanks for having me Sean, and I'm really glad to
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  Speaker 4: be here today in part of this conversation. Yes, so,
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  Speaker 4: while in my experience most people don't look very far
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  Speaker 4: into their tax return, I think a short review of
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  Speaker 4: the document would be extremely helpful. So today I hope
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  Speaker 4: that we can illuminate a few entry points to a
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  Speaker 4: broader inside of the useful information that your twenty twenty
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  Speaker 4: five tax return will contain. So to start off, let's
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  Speaker 4: go straight to taxable income. This is reported online fifteen
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  Speaker 4: of your Form ten forty, and the number in that
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  Speaker 4: line already reflects many adjustments to the total income that
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  Speaker 4: you've reported in your tax return, including whether you took
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  Speaker 4: the standard deduction or itemized your deductions. It also would
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  Speaker 4: already take into account many of the tax law changes
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  Speaker 4: that went into effect last July, such as what we're
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  Speaker 4: calling the Enhanced Senior Deduction and those so called no
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  Speaker 4: tax on tips and no tax on overtime deductions. Nevertheless,
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  Speaker 4: this number taxable income, it determines your tax brackets, and
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  Speaker 4: it's the number used to calculate your tax liability. So
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  Speaker 4: by being able to compare your twenty twenty five taxable
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  Speaker 4: income to the twenty twenty six are current year tax brackets,
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  Speaker 4: you can identify how much room, so to speak, remains
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  Speaker 4: in your current tax bracket. So, to give you an example,
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  Speaker 4: if you are near the top if your twelve percent,
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  Speaker 4: if you're near the top of the twelve percent or
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  Speaker 4: the twenty two percent ordinary income tax bracket, you could
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  Speaker 4: evaluate whether deferring some twenty twenty six income into the
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  Speaker 4: next tax year would be a good idea to avoid
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  Speaker 4: being pushed pushed into a higher tax bracket. At the
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  Speaker 4: same time, you can review if accelerating your tax deductions through,
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  Speaker 4: for example, a donor advised fund might make sense in
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  Speaker 4: your overall tax and financial plan. Conversely, if your twenty
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  Speaker 4: twenty five taxable income reveals that there is still quite
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  Speaker 4: a bit of room until you reach the next highest
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  Speaker 4: tax bracket, it may be that bringing more income into
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  Speaker 4: this calendar year could be a smart move. Let's take
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  Speaker 4: an example, So if line fifteen taxable income shows your
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  Speaker 4: shows you are in a lower than expected bracket, twenty
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  Speaker 4: twenty six could be an ideal year for a roth
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  Speaker 4: Ira conversion. You can fill up, so to speak, your
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  Speaker 4: current tax bracket by converting just enough to keep your
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  Speaker 4: taxable income below the next threshold. Furthermore, taxable income also
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  Speaker 4: determines your tax rate for long term capital gains, So
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  Speaker 4: if your income is low enough to qualify for that
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  Speaker 4: zero percent rate, which means in twenty twenty six that
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  Speaker 4: your taxable income would be below forty nine four hundred
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  Speaker 4: and fifty dollars for singles or ninety eighty nine hundred
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  Speaker 4: dollars for married filing joint filers, you could strategically sell
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  Speaker 4: appreciated assets this year without paying federal capital gains tax.
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  Speaker 2: Oh, that would be very very good to be able
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  Speaker 2: to do.
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  Speaker 1: As we talked this morning with Jenny Doty and Eric Schwartz,
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  Speaker 1: our retirement planning professionals from Glass Financial talking taxes this week,
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  Speaker 1: specifically using your your current taxes to of course help
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  Speaker 1: use as a blueprint for future tax returns and twenty
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  Speaker 1: twenty six tax success as well. Joran, if you've got
• 7:11
  Speaker 1: a question for Eric and Jenny, we've got a line
• 7:13
  Speaker 1: open for you right now at six oh eight three
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  Speaker 1: two one thirteen ten. That's six oh eight three two
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  Speaker 1: one thirteen ten.
• 7:19
  Speaker 2: We'll get you right on the.
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  Speaker 1: Air with our retirement planning professionals from Coss Financial speaking
• 7:23
  Speaker 1: of class financially. You can learn more about them right
• 7:25
  Speaker 1: online Costs Financial dot com. That's coss k l aa
• 7:29
  Speaker 1: s Financial dot com. Telphy number for the office right
• 7:31
  Speaker 1: here in Madison six oh eight four four two five
• 7:34
  Speaker 1: six three seven. Don't forget no charge for that initial
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  Speaker 1: get to know your appointment ak Coss Financial. It will
• 7:40
  Speaker 1: be complementary to you again, their number six oh eight, four, four, two, five, six,
• 7:45
  Speaker 1: three seven. We're going to talk AGI adjusted gross income.
• 7:48
  Speaker 1: We'll do that and more next as Money in Motion
• 7:51
  Speaker 1: with Coss Financial continues right here on thirteen ten. WIBI
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  Speaker 1: talking this week taxes, tax filing, and of course tax planning.
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  Speaker 1: You just don't want to report. You want to use
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  Speaker 1: that to improve an opportunity to use your twenty twenty
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  Speaker 1: five tax return and turn that into a blueprint for
• 8:06
  Speaker 1: twenty twenty six success. And great first segment. There was
• 8:11
  Speaker 1: a lot of information in there, really useful stuff. Don't
• 8:14
  Speaker 1: forget if you ever miss part of the program. I
• 8:17
  Speaker 1: know obviously in the morning sometimes we step out, grab
• 8:19
  Speaker 1: a cup of coffee, drop the kiddos, a grand kiddos
• 8:21
  Speaker 1: off at school, and we're a little conversation going on
• 8:24
  Speaker 1: and we're like, hey, well I miss something. You can
• 8:26
  Speaker 1: always get caught up at Clossfinancial dot Com. That's Coss
• 8:29
  Speaker 1: k l a as Financial dot com talking again this
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  Speaker 1: week about tax planning and I think taxes, I think
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  Speaker 1: about my adjusted gross income and let's talk Eric about
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  Speaker 1: taxable income.
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  Speaker 2: But what about your AGI? Where does that come into
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  Speaker 2: play here?
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  Speaker 5: It's a good question, and this will be I think
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  Speaker 5: one of many acronyms that we reference on the show.
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  Speaker 5: Adjusted gross income, which is known as AGI for short,
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  Speaker 5: is reported online eleven of your form ten. So we're
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  Speaker 5: talking a lot about the ten forty today. So this
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  Speaker 5: is I think what most people think of when they
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  Speaker 5: think of their tax return, So their actual form that's
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  Speaker 5: showing all their income and eventually how much they owe
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  Speaker 5: for taxes. This is calculated prior to taxable income, and
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  Speaker 5: it can be used by several institutions to determine your
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  Speaker 5: eligibility or the cost for participation in many government and
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  Speaker 5: non governmental programs. Think of examples here, think of like
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  Speaker 5: your Medicare Part D and Part D premiums, financial aid
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  Speaker 5: at universities or for state and federal health insurance marketplaces.
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  Speaker 5: The other one you may hear referenced related to AGI
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  Speaker 5: is your modified adjusted gross income or your MAGI. So
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  Speaker 5: that's essentially just adjusted gross income with a few a
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  Speaker 5: few items added back in. Now on the tax return,
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  Speaker 5: there are deductions that are computed both before and after
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  Speaker 5: the AGI number is determined, So it's helpful to work
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  Speaker 5: with a professional to help you discover the options you
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  Speaker 5: might have to lower your AGI. If you're concerned about
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  Speaker 5: qualifying for a specific program or benefit, and this is
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  Speaker 5: something we do with clients all the time, especially folks
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  Speaker 5: who are retired but maybe not yet eligible for Medicare.
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  Speaker 5: So let's look at an example here. Some of the
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  Speaker 5: big tax changes in twenty twenty six really relate to
• 10:23
  Speaker 5: eligibility for the Advanced Premium Tax Credit, which is the
• 10:27
  Speaker 5: subsidy that the government sends to health insurance companies to
• 10:31
  Speaker 5: lower the out of pocket health insurance premium costs that
• 10:34
  Speaker 5: taxpayers pay during the year.
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  Speaker 3: We had a whole.
• 10:39
  Speaker 5: Conversation about this. I think we had a government shutdown
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  Speaker 5: related to this. So the catch with the subsidy is
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  Speaker 5: that while taxpayers can receive the benefit of the lower
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  Speaker 5: premiums during the calendar year, if your adjusted gross income
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  Speaker 5: is above a certain figure at tax time, you have
• 10:56
  Speaker 5: to then pay back up to the entire years worth
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  Speaker 5: of subsidy with the filing of your tax return. So
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  Speaker 5: that can be several thousands of dollars on top of
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  Speaker 5: your normal taxes due, which can be really really hard
• 11:10
  Speaker 5: to work through at tax time. And the hardest part
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  Speaker 5: about this is the tax The hardest part about the
• 11:16
  Speaker 5: tax credit is that you don't know whether or not
• 11:18
  Speaker 5: you're going to qualify for it until you actually complete
• 11:20
  Speaker 5: your tax return, for example in twenty twenty six for
• 11:25
  Speaker 5: the twenty twenty seven tax filing season. So unless you
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  Speaker 5: do some quality tax planning and adjusted gross income that
• 11:32
  Speaker 5: reaches over four hundred percent of the federal poverty level
• 11:36
  Speaker 5: for the size of your tax family, basically can disqualify
• 11:39
  Speaker 5: individuals for health insurance subsidies. And that is why we
• 11:42
  Speaker 5: love to work with people in advance to build what
• 11:46
  Speaker 5: we expect their income to look like for the year,
• 11:48
  Speaker 5: so they can be estimating as closely as possible for
• 11:51
  Speaker 5: those premium subsidies.
• 11:52
  Speaker 1: You know, and any other walk of life, it'd be
• 11:54
  Speaker 1: shocking to hear about the complexity of it. Now we're
• 11:57
  Speaker 1: dealing with the irs, so maybe not as surprising, but
• 12:00
  Speaker 1: it is really really complicated stuff.
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  Speaker 2: Eric, what else?
• 12:04
  Speaker 1: What else do we need to know on this front?
• 12:08
  Speaker 1: Or excuse me, Jenny, I apologize, Jenny. What else do
• 12:11
  Speaker 1: we need to know in this area?
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  Speaker 3: Oh?
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  Speaker 4: Well, I would say that in our conversations with working
• 12:16
  Speaker 4: age clients, we often look at their pay stubs, as
• 12:21
  Speaker 4: many employers offer tax free benefits to their employees that
• 12:24
  Speaker 4: many people don't realize have significant tax ramifications, so making
• 12:29
  Speaker 4: sure you're familiar with your employer's benefit options and signing
• 12:32
  Speaker 4: up for those tax advantaged programs like a Flexible Spending
• 12:35
  Speaker 4: account or a health Savings account since we're on the
• 12:38
  Speaker 4: topic of talking about health insurance at the moment, Those
• 12:41
  Speaker 4: things can go a long way to lower your adjusted
• 12:43
  Speaker 4: gross income. This is because the amounts you and your
• 12:46
  Speaker 4: employer contribute to an FSA or an HSA are excluded
• 12:50
  Speaker 4: from your taxable compensation. But another way, these amounts never
• 12:54
  Speaker 4: really even make it onto your tax return, much less
• 12:56
  Speaker 4: into your gross income or your taxbile income figures.
• 13:00
  Speaker 2: That is pretty pretty interesting stuff.
• 13:03
  Speaker 1: Talking this morning with Jenny Doty and Eric Schwartz of
• 13:05
  Speaker 1: class Financial online class Financial dot com. That's coss k
• 13:09
  Speaker 1: l a A s Financial dot com talkin text is
• 13:12
  Speaker 1: this week not just current taxes, but using current current
• 13:16
  Speaker 1: filings to look forward to the future. And of course,
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  Speaker 1: uh use it as a blueprint for your for your
• 13:21
  Speaker 1: success next year. And and Eric am I am I
• 13:24
  Speaker 1: correct in assuming that kind of the street pre tax benefit.
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  Speaker 1: It also applies when contributing to your to your company
• 13:31
  Speaker 1: four oh one K or your out of those four
• 13:33
  Speaker 1: o three b's.
• 13:35
  Speaker 5: Well, Sean, I think we've we've known each other now
• 13:37
  Speaker 5: long enough for you to know that I'm probably going
• 13:39
  Speaker 5: to say it depends here, but.
• 13:43
  Speaker 3: It certainly does.
• 13:45
  Speaker 5: And you know there's generally there's generally two ways to
• 13:48
  Speaker 5: contribute to these type of qualified retirement plans. So, thinking
• 13:51
  Speaker 5: again the four one K or four oh three B
• 13:54
  Speaker 5: space that you mentioned, you can either use pre tax
• 13:57
  Speaker 5: dollars or dollars that have already been taxed. Okay, so
• 14:01
  Speaker 5: pre tax is dollars that you are deferring tax on
• 14:05
  Speaker 5: until later, okay, So you get to lower your taxable
• 14:08
  Speaker 5: income with those dollars or what are known as Wroth contributions,
• 14:12
  Speaker 5: which we've talked about many, many times on the show,
• 14:15
  Speaker 5: which you are paying taxes on now in exchange for
• 14:19
  Speaker 5: tax free growth on those dollars. So if you're looking
• 14:25
  Speaker 5: at contributing to your employer plan again on that pre
• 14:28
  Speaker 5: tax basis, then you are also realizing a tax benefit
• 14:31
  Speaker 5: upfront with those Wroth accounts you are you're getting you're
• 14:36
  Speaker 5: not getting a tax benefit now, but you are getting
• 14:40
  Speaker 5: that tax free growth. So, especially if you have a
• 14:42
  Speaker 5: lot of years for those dollars to be invested, you
• 14:45
  Speaker 5: can get a big benefit from from making those WROTH contributions.
• 14:50
  Speaker 3: In my work as a financial planner, I spend a
• 14:53
  Speaker 3: good deal.
• 14:53
  Speaker 5: Of time with clients examining kind of the appropriate type
• 14:57
  Speaker 5: of contribution and whether or not we might want to
• 15:00
  Speaker 5: mix mix pre and post tax contributions based on the
• 15:05
  Speaker 5: current highest marginal income tax bracket that the household is facing,
• 15:10
  Speaker 5: and you have to also compare that to what you
• 15:13
  Speaker 5: think the highest marginal income tax bracket might be for
• 15:16
  Speaker 5: them in the future.
• 15:18
  Speaker 3: So, if taxable income or AGI.
• 15:21
  Speaker 5: Are high relative to the client's facts and circumstances, if
• 15:25
  Speaker 5: you increase your pre tax contribution to an employer's qualified
• 15:29
  Speaker 5: retirement plan, and to be clear, it doesn't have to
• 15:33
  Speaker 5: be a qualified retirement plan, it could be an individual
• 15:37
  Speaker 5: retirement account a traditional IRA as well. You can directly
• 15:41
  Speaker 5: reduce these income figures and the corresponding amount of taxes
• 15:45
  Speaker 5: do while potentially building your wealth. So you may have
• 15:49
  Speaker 5: people may hear others say and clients say this to
• 15:51
  Speaker 5: me all the time. Well, I met with my accountant
• 15:54
  Speaker 5: and they said, I need to put three thousand dollars
• 15:56
  Speaker 5: into a traditional IRA because it's going to save me
• 15:58
  Speaker 5: a whole bunch of money in taxes. This is exactly
• 16:01
  Speaker 5: what we're what we're thinking about when it comes to
• 16:04
  Speaker 5: these pre tax contributions.
• 16:05
  Speaker 1: It's always good to have options and of course different buckets.
• 16:08
  Speaker 1: So we talked this morning with Eric Schwartz and Jenny
• 16:11
  Speaker 1: Doity of COSS Financial. A lot of really good information. Again,
• 16:15
  Speaker 1: this program is one of those where there's really really
• 16:17
  Speaker 1: good stuff and a lot of great content. You're definitely
• 16:19
  Speaker 1: going want to listen back. If you head on over
• 16:21
  Speaker 1: to classfinancial dot com. That's coss k l aa S
• 16:24
  Speaker 1: financial dot com. You can listen back and subscribe to
• 16:27
  Speaker 1: the podcast right online. You can also schedule a complementary
• 16:30
  Speaker 1: conversation right from the website class financial dot com. Or
• 16:33
  Speaker 1: you can pick a phone call the office right here
• 16:35
  Speaker 1: in Madison six oh eight four four two five six
• 16:38
  Speaker 1: three seven. No charge for that initial get to know
• 16:40
  Speaker 1: your appointment at Coss Financial. It is complementary to you
• 16:43
  Speaker 1: again their number six oh eight four four two five
• 16:45
  Speaker 1: six three seven. Well into our conversation with Eric and
• 16:48
  Speaker 1: Jenny next as Money in Motion with Coss Financial continues
• 16:51
  Speaker 1: right here on thirteen to ten. Wuiba talkin tax is
• 16:54
  Speaker 1: this week on the program. If you miss any part
• 16:56
  Speaker 1: of the show Don't Forget Classfinancial dot Com. That's claw
• 17:00
  Speaker 1: us k l a as Financial dot Com talking this
• 17:03
  Speaker 1: week with Eric Schwartz c FP and Jenny Dotie, who
• 17:07
  Speaker 1: is a EAE again EA, which is an enrolled agent, Correct.
• 17:12
  Speaker 3: Jenny, that's correct agent.
• 17:15
  Speaker 2: Hey, a tax.
• 17:15
  Speaker 1: Specialist and for people are going I know, as Eric
• 17:18
  Speaker 1: mentioned the previous segment, your industry Loves abbreviations a number
• 17:22
  Speaker 1: of years ago was probably ten years ago. Now we
• 17:25
  Speaker 1: did a show all about all the different designations, what
• 17:28
  Speaker 1: they mean, all that all that stuff, and it's a fascinating,
• 17:32
  Speaker 1: fascinating world and how important all those all those different
• 17:35
  Speaker 1: things are and what they all mean and really really
• 17:37
  Speaker 1: important conversation this week as we talk taxes and looking
• 17:41
  Speaker 1: to a successful twenty twenty six and Jenny, as we
• 17:44
  Speaker 1: talk about different tools out there, are there other ones
• 17:46
  Speaker 1: out there for folks when they want to maybe to
• 17:49
  Speaker 1: look to maybe lower their adjusted gross income and taxable income.
• 17:54
  Speaker 4: Certainly, certainly there are, and I guess in particular for
• 17:58
  Speaker 4: this moment, I would like to mention that one that
• 18:01
  Speaker 4: applies for taxpayers aged seventy and a half or older.
• 18:04
  Speaker 4: It's called a qualified charitable distribution. An acronym here that
• 18:09
  Speaker 4: we use is QCD. It's one of the most effective
• 18:13
  Speaker 4: tools for lowering taxable income by directing up to one
• 18:19
  Speaker 4: hundred and eleven thousand dollars a year, it's a very large,
• 18:22
  Speaker 4: generous window per person per year from a traditional IRA
• 18:28
  Speaker 4: directly to a five ZHO one C three charity and
• 18:31
  Speaker 4: not for profit. The distribution that amount is excluded from
• 18:36
  Speaker 4: your taxable income entirely. So now some of you remember
• 18:40
  Speaker 4: that the required minimum distributions used to begin at age
• 18:45
  Speaker 4: seventy and a half as well. However, that age has moved,
• 18:48
  Speaker 4: so for those born in the nineteen fifties, you required
• 18:51
  Speaker 4: minimum distribution age is likely seventy three. If you were
• 18:56
  Speaker 4: born in nineteen sixty or later, it's seventy five. Well,
• 18:59
  Speaker 4: it's fusing that Congress didn't align these dates. It actually
• 19:04
  Speaker 4: creates a window starting at age seventy and a half
• 19:07
  Speaker 4: where it can use a qualified charitable distribution to reduce
• 19:11
  Speaker 4: your IRA balance tax free before you are even forced
• 19:15
  Speaker 4: to take out those minimum distributions. So just remember, because
• 19:19
  Speaker 4: a QCD is already tax free, you can't double dip,
• 19:23
  Speaker 4: which means you can't exclude the money from your income
• 19:26
  Speaker 4: and then claim it as a deduction in your tax return.
• 19:31
  Speaker 4: You're essentially bypassing the tax return process entirely by making
• 19:36
  Speaker 4: the qualified charitable distribution. So if you're considering this, touch
• 19:40
  Speaker 4: base with your tax professional to ensure that the transfer
• 19:43
  Speaker 4: is handled directly by your IRA custodian and documented accurately.
• 19:47
  Speaker 3: On your tax return.
• 19:49
  Speaker 4: So about that documenting it accurately. New on the twenty
• 19:53
  Speaker 4: twenty five form ten forty is a checkbox online for
• 19:57
  Speaker 4: for a QCD indicating that some of your IRA distributions
• 20:02
  Speaker 4: were excluded from your income. So the actual dollar amount
• 20:05
  Speaker 4: of the gift won't have its own dedicated box on
• 20:08
  Speaker 4: the form. Instead, you'll see the total amount that you
• 20:11
  Speaker 4: took out online four A, but a much smaller tax
• 20:15
  Speaker 4: bill amount or potentially much smaller tax bile amount online
• 20:18
  Speaker 4: four B, and the gap between those two numbers could
• 20:22
  Speaker 4: often be where your tax savings live.
• 20:25
  Speaker 1: That is really interesting, and Jay, well, let's take her
• 20:27
  Speaker 1: down the home stretch. Anything else folks should know before
• 20:31
  Speaker 1: we finish up this week.
• 20:33
  Speaker 4: Perhaps one more thing I do want to mention a
• 20:35
  Speaker 4: small but common hang up when it comes to tax
• 20:37
  Speaker 4: preparation in the years when clients transition from W two
• 20:41
  Speaker 4: income to retirement income sources. So commonly, during this period,
• 20:45
  Speaker 4: your income landscape is fundamentally altered. Gone are those steady
• 20:50
  Speaker 4: wages with an automatic W two withholding of taxes. Instead,
• 20:55
  Speaker 4: income sources typically shift to a variety of sources like pensions,
• 21:00
  Speaker 4: social security benefits, and investment income. And with this, many
• 21:04
  Speaker 4: of these income streams either lack mandatory withholding or they
• 21:08
  Speaker 4: default rates that are much lower than is appropriate for
• 21:11
  Speaker 4: your circumstances, which potentially leads to an unwelcome tax bill
• 21:15
  Speaker 4: or under underpayment penalties that you could experience come tax time.
• 21:21
  Speaker 4: So by looking at your twenty twenty five tax liability
• 21:24
  Speaker 4: and your sources of income, retirees are almost retirees can
• 21:28
  Speaker 4: proactively submit forms like the W four to specify your
• 21:31
  Speaker 4: withholding preferences. So specifically, compare your total tax liability which
• 21:36
  Speaker 4: is online twenty four of your ten forty with your
• 21:39
  Speaker 4: actual withholdings from your form's W two and ten ninety nine,
• 21:43
  Speaker 4: and your estimated tax payments which you'll see online twenty
• 21:46
  Speaker 4: five and twenty six. If you own additional tax or
• 21:49
  Speaker 4: received a large refund, you can make adjustments if that
• 21:53
  Speaker 4: might be needed.
• 21:54
  Speaker 2: That is, these are really important pieces of information.
• 21:57
  Speaker 1: A lot of great stuff this week as we talk
• 21:59
  Speaker 1: with our retirement planning professionals from Class Financial, Eric Schwartz
• 22:03
  Speaker 1: and Jenny Dowdy. Don't forget doti Excuse me, I knew
• 22:06
  Speaker 1: I was going to get it at least once.
• 22:07
  Speaker 2: Don't forget.
• 22:08
  Speaker 1: You can learn more online Cossfinancial dot com. That's Coss
• 22:11
  Speaker 1: k l a a s Financial dot com. Great website
• 22:15
  Speaker 1: and resource. We also have an opportunity if you ever
• 22:17
  Speaker 1: have a question, you can call during the show, or
• 22:19
  Speaker 1: you can submit a question right online to be answered
• 22:22
  Speaker 1: and our Money in Motion listener question corner. Again that
• 22:24
  Speaker 1: available to you at Cossfinancial dot com. You can also
• 22:28
  Speaker 1: schedule a complimentary conversation right from the website or you
• 22:31
  Speaker 1: can call the office right here in Madison at six
• 22:33
  Speaker 1: oh eight four four two five six three seven. No
• 22:36
  Speaker 1: charge for that initial gets to know you appointment tech
• 22:38
  Speaker 1: COSS Financial. It will be complementary to you again their
• 22:41
  Speaker 1: number six oh eight four four two five six three seven.
• 22:44
  Speaker 1: You could want to hold on to that telephon number
• 22:46
  Speaker 1: as well. Because it's time now for the Coss Quiz
• 22:48
  Speaker 1: question the week. It works like this, In just a moment,
• 22:50
  Speaker 1: I'll ask you the class quiz question week. You will
• 22:52
  Speaker 1: then have thirty minutes from the and today's program to
• 22:54
  Speaker 1: call the COSS Financial Office right here in Madison at
• 22:56
  Speaker 1: the number six oh eight four four two five six three.
• 23:00
  Speaker 1: If you are the first call the correct answer, you
• 23:02
  Speaker 1: win this week's prize, which is a twenty five dollars
• 23:04
  Speaker 1: gift card to Amazon. This week's class quiz question the
• 23:08
  Speaker 1: week is this. QCB is an acronym for what three
• 23:13
  Speaker 1: words regarding distributions from your traditional IRA to a five
• 23:18
  Speaker 1: oh one C three charities telephone number four four two
• 23:22
  Speaker 1: five six three seven. First call correct answer win that
• 23:24
  Speaker 1: twenty five dollars gift card to Amazon.
• 23:27
  Speaker 2: Again.
• 23:27
  Speaker 1: That's also classed financial office right here in Madison, that
• 23:30
  Speaker 1: number six so eight four four two five six three seven. Eric, Jenny,
• 23:34
  Speaker 1: always great chatting with both of you guys. Have a
• 23:36
  Speaker 1: great day and we'll do it all again real soon.
• 23:38
  Speaker 3: Thanks Sean, thank you.
• 23:40
  Speaker 2: Have a great day.
• 23:40
  Speaker 1: And we've got doctor Marty Greer fresh back from Westminster
• 23:44
  Speaker 1: some big news. We'll get that from doctor Greer next
• 23:46
  Speaker 1: on thirteen ten wib E