If you have access to a 401k brokerage window, you have an incredible tool to diversify your 401k holdings and help you reach your target asset allocation. A brokerage window–sometimes known as a self-directed brokerage account or SDBA–gives you access...
Continue reading...Why I Left My 401(k) With My Former Employer
When you leave one job for another, you are often advised to take your 401(k) with you, either by rolling it into an IRA or by rolling it over to your new employer’s 401(k) plan. By rolling it into an...
Continue reading...Understanding IRA Contribution Limits
Understand IRA contribution limits so that you can get the full benefit from IRA contributions without exceeding the limits and facing tax penalties.
Continue reading...What Is A Backdoor Roth IRA?
A backdoor Roth IRA is a technique for high-income earners to work around the income limits on IRA contributions. This allows them to continue to contribute to an IRA even though their income is above the limits imposed by the...
Continue reading...Watch Out For The Pro Rata Rule
If you’re considering a backdoor Roth IRA contribution, you have to watch out for the pro rata rule. Otherwise, you can end up with a tax mess on your hands. Most people make only tax-deductible contributions to their traditional IRA...
Continue reading...Deduct Capital Losses From Ordinary Income
In another post, I’ve written about using capital losses to offset capital gains to help manage your income tax bill. But, to a limited extent, you can deduct capital losses from ordinary income. This can be useful if your ordinary...
Continue reading...What Is Asset Allocation?
Asset allocation is simply the distribution of your investment assets across the spectrum of asset classes. For example, you may be invested equally in stocks, bonds, certificates of deposit, and gold coins. In this case, your asset allocation is: 25%...
Continue reading...Understanding Wash Sale Rules
Wash sale rules are designed to prevent you from taking “too much” advantage of temporary dips in the stock market to generate capital losses that you can deduct on your income tax return. Essentially, they are designed to keep you...
Continue reading...What Is Tax Loss Harvesting?
One of the features of the federal income tax code is that it allows you to use capital losses to offset capital gains, and in some cases, ordinary income. Doing this allows you to lower your taxable income and therefore...
Continue reading...What Is My Capital Gains Tax Rate?
As with ordinary income, there are multiple rates for capital gains taxes. Your capital gains tax rate is a function of (a) how long you held the investment and (b) your total taxable income. Short-term Capital Gains vs. Long-Term Capital...
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