Retirement Guys: Make life’s changes less taxingWritten by Nolan Baker Mark Clair | | email@example.com
Spring is officially here. After the winter that the majority of Americans just went through, it couldn’t come soon enough. Although it may look more like winter than spring outside, the meteorologists are confident that a change in the weather is coming.
The mounds of snow are melting and we are slowly but surely seeing the grass that has been dormant for several months. Before we know it, there will be daffodils and pansies blooming all around us. As for me, Nolan, I really enjoy spring. It signals the start of the boating and golf season.
With spring comes an urge for change. It gives us the urge to step outside, take the dog for a walk and have some fun.
This time of year, a lot of people are thinking about change. Perhaps it’s time for a career change. It could be time to start a business or take a new position at another company. It could be time for a move to a new state. Perhaps someone may be getting ready to move to Toledo to enjoy our affordable housing and live closer to family. It could be a local resident ready to downsize and move to a lake house or somewhere warmer. If you are considering any of these changes, take some time to review our pointers on proper tax planning. These pointers listed below may help make those changes less taxing.
Home sales gain exclusion
I must admit, after going through the record cold and snowfall this past winter, hitting the beach to enjoy the sounds of the ocean sounds pretty appealing. Maybe you have the itch to move somewhere warmer. Retirement can also be a time that families consider downsizing their homes and try to figure out where to spend their retirement years.
Selling a home that has appreciated in value can be a way to realize those dreams. An individual can exclude up to $250,000 of gain on the sale of their home. A married couple does not have to pay federal income tax on up to $500,000. A few requirements to avoid this tax are (1) the owner must have owned the property for at least two of the past five years and (2) it must be their primary residence. If you are considering this option, talk with your accountant to learn more.
Moving expenses deduction
Maybe you aren’t at retirement age just yet, but could use a change of scenery. If that’s the case, and the move is job-related, the moving expenses might be tax deductable. I would advise someone moving due to a job change to keep a log of all expenses. Once the move is complete, the list can be reviewed by a tax preparer to see if anything can be used as a deduction. In general, expenses such as packing and shipping costs, storage fees for up to 30 days and travel expenses are typically deductible. To retrieve a complete list of deductions, please visit IRS Publication 521 at www.IRS.gov.
The Retirement Guys recently interviewed Carolee Duckworth and Marie Langworthy, who are the authors of “Shifting Gears To Your Life and Work After Retirement.” An interesting fact found in their book is that over the past decade those aged 55 to 64 have the highest rate of entrepreneurship. The time might be now for those ready for a change in life and looking to start their own business.
We’d like to encourage you to embrace your new adventures in retirement, whatever they may be. It’s also important to remember to save for the future as well. A great way to do this, which may possibly provide you a tax benefit, is to set up a self-employed retirement plan. Depending upon what type of retirement account, an investor may contribute and deduct up to $57,500.
For more information about The Retirement Guys, tune in every Saturday at 1 p.m. on 1370 WSPD or visit www.retirementguysnetwork.com. Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. NEXT Financial Group, Inc. does not provide tax or legal advice. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537. (419) 842-0550.
Tags: arolee Duckworth and Marie Langworthy, boating, Golf, Home sales gain exclusion, Moving expenses deduction, proper tax planning, Self-employed retirement, spring, tax deductable, “Shifting Gears To Your Life and Work After Retirement”