Author - Jim Blankenship, CFP®, EA

1
How to Bypass Mandatory Withholding on a 401(k) Distribution
2
The Earnings Test is Specific to the Individual
3
How to Interview Your (Potential) Financial Adviser
4
IRAs: Roth or Traditional?
5
What to Do if You’re a Victim of Tax Fraud

How to Bypass Mandatory Withholding on a 401(k) Distribution

Just ferinstance, let’s say you need to take a withdrawal from your 401(k) plan – and you’re eligible, either by way of your plan allowing in-plan distributions or the fact that you’re already retired (but you still have the money in your former employer’s 401(k) plan). But here’s the rub: when you take a distribution from a 401(k) plan, the IRS requires that the plan administrator withhold 20% from the distribution. If it’s a significant amount being withheld, it can be a long time before next April when you file your tax return to get the withholding refunded (as long …

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The Earnings Test is Specific to the Individual

This topic comes from a reader, J., who asks the following question:

My wife is 62 and she works a part-time job earning around $23k per year. She is planning to retire in June, and so her total earnings for the year will be approximately $11,500. She would like to begin taking Social Security benefits right after her retirement.

The question is this:  will her earnings test be based upon her “individual” earnings, or on the higher combined earnings of the two of us (I am still working, earning in excess of the earnings test amount)? Since her earnings of

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How to Interview Your (Potential) Financial Adviser

As individuals need help with their finances and investments they will likely turn to the help of a qualified professional. Their future financial adviser may come via referral from a trusted friend or family member, or through an extensive Internet search. The following is a list of questions (and answers to look for) that individuals can ask their potential adviser to see if he or she is likely to be a good fit and more importantly, act in the client’s best interest.

  1. Are you a fiduciary?

If yes, move to question 2. If no, thank them for their time and …

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IRAs: Roth or Traditional?

The question comes up pretty often: when contributing to an IRA, should you choose the Roth or Traditional? I often approach this question in general with my recommended “Order of Contributions”:
  1. Contribute enough to your employer-provided retirement plan to get the company matching funds. So if your employer matches, for example, 50% of your first 5% of contributions to the plan, you should at least contribute 5% of your income to the plan in order to receive the matching funds.
  2. Maximize your contribution to a Roth IRA. For 2015 that is $5,500, or $6,500 if you are age 50 or
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What to Do if You’re a Victim of Tax Fraud

Hopefully this will never happen to you but in the unfortunate event you become of victim of tax fraud there are some steps that you can take to help alleviate the concern that someone has stolen your identity to file a fraudulent tax return in order to receive the refund.

Generally, the first sign of fraud appears when you try to file our return electronically. Most e-file providers receive acknowledgements from the IRS that the return was successfully e-filed. If a return is rejected, a code will return with the rejection indicating what the issue is. For example, a sign …

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