Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
5 high-yield muni bond funds to combat Brexit fears: The U.K.'s vote to leave the European Union has prompted investors to allocate a substantial portion of their assets to municipal bonds, which offer tax-free income, according to Nasdaq. Munis are a big hit among investors because they attempt to provide high yields that are exempt from federal taxes. Income from these high-yield bonds also is not taxed in several states. -- Nasdaq
Divorcing? Take advantage of the tax-free home sale gain: A couple considering divorce may want to sell their home first to qualify for a tax savings of up to $500,000, which they can't claim after the legal split, according MarketWatch. Aside from the ownership, use, and joint-filer tests they need to pass, the couple should also make sure they are still legally married at the end of the year when they sell the property to be eligible for the exclusion. If they are divorced at the end of that year, they may file separate returns and claim only $250,000 if both of them have a stake in the house, or only the sole owner of the house will qualify for the tax break. -- MarketWatch
Your guide to annuities: variable annuities: Variable annuities differ from mutual funds because variables offer tax-deferred growth on earnings, according to Motley Fool. However, variable annuities do not offer other tax advantages found in before-tax retirement accounts, such as tax-deductible contributions. Clients are advised to consider variable annuities only after they have maxed out their before-tax retirement accounts. -- Motley Fool
Different types of retirement accounts: As employee pension plans gradually disappear, the federal government is using tax breaks to prompt Americans to save for retirement, according to NerdWallet. IRAs are among the tax-advantaged savings vehicles that offer tax-free earnings. In a traditional IRA, contributions are tax-deductible but distributions are taxed in retirement, while a Roth IRA is funded with after-tax dollars but distributions will be non-taxable. Employer-sponsored retirement plans, such as 401(k)s and 403(b)s, are also designed for retirement saving. These plans accept tax-deferred contributions, offer tax-free earnings, and have higher contribution limits compared with IRAs. -- NerdWallet
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access