Donating to charity should be easy. Donating is. Making sure the donation is all "tax-ready" is a bit more challenging. Like a lot of things in the military, disciplined record keeping will make things go smoothly.
In the military we become accustomed to clear cut rules and procedures. The tax code is "not so much". One of the areas that can be a little confusing is the transfer of funds due to inheritance and the taxation of those funds.
When you start your post-military retirement career, your income can go up quite a bit. That can trigger new taxes. Two of the insidious ones are the Net Investment Income Tax and the Additional Medicare tax.
When you're on Active Duty, you can pretty much put your Roth IRA contributions on autopilot. Once you retire from the military, that won't necessarily be the case.
If you're a Retired Senior Military Officer or NCO, there is more than a slim chance that you could receive equity compensation like Restricted Stock. If you do receive Restricted Stock, you might want to make an 83(b) election. What is it?
The law covering how inherited IRAs are treated has been in existence for more than 4 years. The rules that cover them haven't been written/finalized until now. And... they're not simple.
Turning your residence into a rental is challenging from a tax perspective. That is even more so for Active and Retired Military Members. They need to watch out for and be aware of the rules for non-qualified use of a primary residence.
There are a lot of advisors that "hate" annuities. But they can have their place in a financial plan. One possibility is inside a trust.
Getting ready to retire from the military? Missed our Live Chalk Talk on Watching out for these Tax Tripwires? Here's your second chance.
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