Comments

  1. says

    Nobody really wants to raise taxes on the “middle” or semi-upper class, so the government is going to continue to find ways to increase taxes with most people not knowing.

    This rule change. Getting rid of the mortgage interest deduction…talks about not allowing charitable contributions to be deducted.

    It’s all ridiculous. The fact is that taxes will go up one way or another. It’s just how they package it.
    WorkSaveLive recently posted..Recipe: Black Bean, Rice, and Corn BurritosMy Profile

    • Average Joe says

      Jason, it reminds me of the boiling frog analogy. Nobody feels a thing as the water gets hotter and hotter.

    • Average Joe says

      You’re correct in one way, SB, but this is a different animal. Here’s what I mean:

      People DO have a $5M unified tax credit exemption for estate and gift taxes. That covers any estate tax liability, and as you’ve said, passes items “tax free” (as far as estate tax goes).

      However, this is an INCOME tax, which is a different beast. Money inside an IRA is taxed when it leaves the tax shelter.

      Estates suffer a DOUBLE whammy because they’re hit with estate and income tax. In fact, the funny part? Estate taxes are levied on the gross amount, before income taxes are applied, allowing the government to tax money that’s already being paid to them to cover other taxes.

    • TheOtherGuy says

      Well, Hunter, therein lies part of the issue: If they’re going to sneak in and take away this little break – how long before they realize the Roth concept is flawed too and take that away? Plus, one of the benefits of leaving a Roth IRA to a beneficiary is that money continues to grow tax-free forever; so even though they require RMDs from Roth IRAs for beneficiaries, the RMD amount is so small – the Roth can be left growing tax free for a long time; if they shorten that to 5 years, then that money will be out of that tax-shelter much sooner.

Trackbacks

Leave a Reply

Your email address will not be published. Required fields are marked *


5 + = 6

CommentLuv badge