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How to Avoid NJ Exit Tax

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Federal income taxes are the same for every state. The only difference is how much money you make and what tax bracket you fall in.

State taxes are a completely different story because each state has its own rules. New Jersey is a perfect example with their “Exit Tax”. In this article, we’ll talk about ways to avoid NJ exit tax.


 

What’s the deal?

When you sell your NJ home and then move out of state, you have to pay the NJ exit tax.

When you sell a home, regardless of the state you live in, you have to pay tax on any gains you made. How much tax you pay depends on how long you owned and lived in the home.

According to NJMoneyHelp.com, “On June 29, 2004, New Jersey enacted P.L. 2004, Chapter 55, which requires sellers of real estate who are not residents of New Jersey to make an estimated income tax payment on the gain from the sale.”

It has nothing to do with selling and moving out of state. It’s just about selling the home and paying taxes on any gains made at the time of closing. The rule was enacted to ensure that NJ would receive the taxes owed on the property regardless if the seller was an NJ resident or not.

If you do not fill out one of the forms (see below) and pay the estimated taxes owed, the deed may be rejected.

Exemptions

There are 1 of 4 forms that you need to file when selling a home in NJ. Form GIT/Rep 3 Seller’s Residency Certification/Exemption – has 8 exemptions. The first applies to NJ residents. The remaining exemptions are listed below:

  • Real property was used as a principal residence and qualifies under IRC Section 121 of the Internal Revenue Code which excludes up to $500,000 of gain for married taxpayers, $250,000 for single taxpayers. Remember this does not include vacation or investment homes.
  • Addresses a mortgagor conveying the property to a mortgagee in foreclosure.
  • Seller is a governmental agency.
  • Seller is not an individual, estate, or trust, i.e. corporation, partnership, etc…
  • Total consideration is $1,000 or less
  • Gain from the sale will not be recognized if qualified under Sections 721 (contribution to a partnership), 1031 (like-kind exchanges), 1033 (involuntary conversions) and non-non-like kind property received
  • Transfer is by an executor/administrator of an estate pursuant to decedent’s Will

If one of these exemptions doesn’t apply to you, then you’ll have to pay tax on the proceeds and fill out Form GIT/Rep 1 or 2.

Conclusion

There are several ways to avoid NJ exit tax, but if you don’t qualify for one of those ways, make sure you fill out one of those forms and pay the taxes due.

Related Reading:

Should You Report Income From the Sale of Your Home on Your Income Taxes?

How is Passive Income Taxed?

Why Financial Literacy is Important

When are Per Diem Payments Taxable?

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Per diem payments are used when businesses have employees that travel. These payments are designed to relieve the employee from certain costs associated with traveling. Particularly meals and incidentals (ground travel, laundry, room service, etc.), and lodging.

This is great for both the business and the employee, but there are certain situations when per diem payments are taxable. In this article, we’ll explore exactly when an employee will pay per diem tax.

Two types

There are two types of per diem payments, meal-only, and meal and lodging. The names imply their use. One pays for meals, the other pays for meals and lodging.

It’s important that we specify the meals must be “non-entertainment related” meals.

Stipulations

As with many parts within the tax code, per diem rules are very specific. Meals and lodging have different rates.

Also, different cities have different rates. These differences are typically relegated to “big cities” and “small cities”, with bigger cities getting the larger rates. This is referred to as the high-low method. Businesses may also make payments based on the state in which you travel.

The per diem payments must be equal to or less than the federal allowable limit (depending on what method is selected). The employee is responsible for filing an expense report within 60 days. The expense report needs to include, date and location of the trip, purpose of the trip, and lodging receipts (if the meal-only option is selected).

You’re not allowed to “transfer credits”. What’s meant by this is if you use less on your lodging than is allotted, you can’t use the excess on food, or vice versa.

Tax Consequences

As I mentioned in the introduction, per diem payments can have tax consequences.

  • If per diem payments over the limit are taxable on the employee’s wages
  • If an expense report isn’t filed, or the filed expense report doesn’t include the required information, those per diem payments become taxable to the employee.
  • If the employer allows you, the employee, to keep whatever you don’t spend.

If you travel for business and receive per diem payments, just make sure you keep good records, and you hang onto your receipts. It’s better to have too much information than not enough.

Related reading:

Some Often Overlooked Tax Deductions for Busines Owners

Top 5 Overlooked Tax Deductions You Should Be Using

Why Financial Literacy is Important

 

*Be advised: Securities America and its representatives do not provide tax advice. Please consult a tax professional for specific information regarding your individual situation.

Should You Report Income From the Sale of Your Home on Your Income Taxes?

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is money from the sale of your house considered income

The United States tax code is complex. Many taxpayers have trouble figuring out what does and doesn’t need to be reported as income, particularly if the money is related to the sale of personal property. In many cases, the value of a person’s home goes up in the years after they buy. When this occurs, there is a financial gain from the sale, creating a profit. If you’re asking yourself, “Is money from the sale of your house considered income?” here’s what you need to know.

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Why Your Will Should Be Up To Date

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With the Coronavirus making its way through countries and countless healthcare systems, it’s a good opportunity to check in with everyone about their will and general estate planning.

We’ve written a couple of posts about the finer details of estate planning, but one of the most important things you can do is make sure that you have an updated will.

Beneficiaries

A beneficiary is anyone that will receive an asset, or assets when you pass away. You will have beneficiaries listed on your retirement accounts and life insurance policies. They can also be added to brokerage accounts via a Transfer on Death (TOD) designation.

It’s important to note that beneficiary designations and TOD designations bypass probate. The assets that the deceased owned at the time of death do not need to go to court. They go directly to the beneficiary (beneficiaries) listed on the account.

So…why is it so important to keep your beneficiaries up to date? The obvious answer is because life changes all the time.

Life Changes

People get married, divorced, re-married, etc. People have kids or marry someone that already has kids. The more grim circumstance is when a beneficiary predeceases you. It’s unfortunate, but something that does happen.

When you assign beneficiaries, there is often a box you can check labeled “per stirpes”. This simply means that if one of your beneficiaries passes before you do, that beneficiaries portion would be received by their children instead.

Not only can changes take place with your beneficiaries, but they can also change with the people you’ve entrusted with your estate. Roles like the power of attorney and executor.

Again, people can pass away before you and/or relationships can fall out of favor.

When it comes to your assets, those change often too. Good or bad years in the stock market can see drastic fluctuations in portfolio value.

Moving will change your residence, but it can also change your net worth depending on the value of your new home and how much you owe on that home. Remember Finance 101? Net worth = assets – liabilities?

Consequences

There could also be consequences for not having an updated will. The wrong beneficiaries could receive assets. Your power of attorney could be your brother and not your sister.

You actually have a much higher net worth than you thought, so now your heirs will have to pay estate taxes. Had you known that, you could have taken advantage of the gift tax exclusion and shared your wealth in order to bring your net worth down to avoid taxes.

To sum things up, you need an updated will because the items within it are going to change…plain and simple.

Related Reading:

How Long Should You Keep Financial Records After Death?

Your Estate and Your Family

Where Your Property Goes When You Die

401k Withdrawal Taxes and Penalties

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The 401k has grown in popularity over the last couple of decades because pensions have all but vanished; as a result, strategies around taking withdrawals and how to limit taxes and penalties are extremely prevalent.

In this article, we’re going to discuss the common penalties and taxes, and some of the strategies you can deploy to reduce them.

When a penalty typically applies

In almost all cases, a penalty applies if you withdraw from your account before the age of 59 ½. This is a 10% tax penalty. (Be advised: All withdrawals are subject to ordinary income taxes)

There is also a tax penalty if you fail to withdraw your Required Minimum Distribution (RMD). This applies to individuals over the age of 70 ½. This penalty, however, is 50% of the amount you should’ve withdrawn.

There are several exceptions, however.

Additionally, with the new Secure Act, there have changes to required minimum distributions, contributions, and others. For more information, click here.

When you are exempt from penalty

  • Withdrawal after 59 ½
  • Left employer after 55
  • Left employment in public safety after 50
  • Death distributions: your beneficiary is able to take distributions without penalty, regardless of their age
  • Totally and permanently disabled as defined by the IRS
  • 72t rule – Agree to withdraw the same amount for a fixed period of five years or until you turn 59 ½, whichever is greater.
  • Unreimbursed medical expenses: You’re allotted to withdraw the unreimbursed medical expenses minus 10% of your adjusted gross income
  • If you over contribute to your retirement plan for the year, you’re allowed to withdraw the excess without incurring a penalty.
  • IRS Tax Levies
  • Divorce: Depending on your state and how you settle the divorce with your former spouse, he/she can withdraw their respective portion without penalty
  • Roth conversion: you pay taxes on the conversion, but there is no 10% tax penalty

*All exceptions may have certain requirements that need to be met to qualify for the exemption. Please check with your 401k Plan Administrator and Financial Advisor regarding your personal situation.

Taxes

With regard to tax-saving strategies on 401k withdrawals, there are no short-cuts or exceptions like there was for the penalty section.

The best way to save money on taxes when taking distributions is to be strategic.

If the expense you are withdrawing for is something that can be planned ahead of time, determine your current tax bracket, figure out how much you’ll need at that future date, and withdraw slowly over time (how much you withdraw depends on how soon you’ll need it).

For example, if you are in the 22% tax bracket, are $10,000 from going into the next bracket, and need $40,000 for a down payment in 4 years, then withdraw just under $10k each year.

This assumes that your income and tax bracket will stay the same.

Another way to go about it is to utilize Roth conversions. If the intention is to minimize or eliminate your tax liability for retirement, do a Roth conversion every year. Just be mindful of where you are in your current bracket, so you aren’t bumped into the next one.

In this example, however, it can be counter-intuitive because in most cases, your tax bracket in retirement is lower than it was while you are working. This is commonsense, though. You’re making less, so logically you would be in a lower bracket.

With regard to taxes, it comes down to math. If you need to withdraw from your 401k, crunch the numbers and figure out how you can do that while limiting your tax exposure.

Related reading:

How to Save Money Effectively

Business Retirement Plan Guide

*Be advised – Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Why I Love The Roth IRA

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The Roth IRA started in 1997 and it changed the retirement savings game.

It’s probably my most recommended retirement savings vehicle, other than your employer-sponsored plan of course. You have to get that match!

The Roth IRA can be your primary retirement account or a nice complement to a work-based plan.

Here’s why I love the Roth IRA.

Tax-free withdrawals! That’s right, if you save for retirement using the Roth IRA, you get to take that tax-deferred (don’t pay taxes while money grows) savings out of your account without paying taxes.

While you’re working, you generally have two options (besides contributing to your 401k or Simple IRA) do I contribute to a Roth IRA or a Traditional IRA? The amount of money you make plays a little bit of a factor, as the Roth IRA has an income limit ($137,000 – single, $203,000 – married filing jointly).

However, a back-door contribution is available. That’s where you make a contribution to a traditional IRA and roll the money from there into a Roth IRA. Be advised: You’ll be taxed at the time of the rollover.

That aside, contributions to a traditional IRA are tax-deductible (an income limit applies here). Conversely, contributions to a Roth IRA are not tax deductible.

Here’s why I like to recommend the Roth. I’d save for retirement, without getting that tax-deduction and pay $0 taxes upon withdrawal in retirement. At that point in time, your ability to earn more money is either dramatically reduced or gone completely.

It’s at this point when you need that money the most. I’d rather pay for it now and benefit from it later.

With all that said, I suppose I should list all the characteristics of a Roth IRA.

  • For 2019, the contribution limit is $6,000. If you are 50 or older, you can contribute an extra $1,000. Be advised: these contributions limits change often. Consult the IRS website for up to date information.
  • Because the money in the account was already taxed, there are no mandatory withdrawals. Uncle Sam got his cut already so you can let that baby grow for as long as you want.
  • If you withdraw before 59 1/2, you’ll pay a 10% tax penalty
  • There are exceptions to this penalty, however.
    • Death
    • Disability
    • Use up to 10% on your first home purchase
    • Pay for higher education
    • Medical costs are more than 7.5% of your AGI
    • Can pay health insurance premiums if you’re unemployed
    • The IRS has a tax levy against you
  • You can make contributions for the prior “tax” year up to April 15th.
  • If you withdraw your savings within 5 years of your first contribution, you’ll pay some taxes on your withdrawal.
    • Note: The 5-year clock starts ticking on January 1st of the year you made your first contribution

Conclusion

As I said, the Roth IRA is a great savings vehicle. Whether you use it on its own or use it as a complement to an employer-sponsored plan, it has a place in everybody’s retirement plan.

One last thing I want to mention. My reasoning behind why I recommend the Roth IRA so often is my personal belief. Please use your situation and your money/retirement philosophy when making this decision. It also pays to talk to a professional to see what they’re thoughts are, as well.

A Few Tax Tips Suitable for Anyone

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Seeing as how next Monday is tax day, I thought it would be fitting to write about taxes. This article will have little to do with income taxes, however.

Instead, I’ll be focusing on the taxability of retirement accounts and brokerage accounts.

Qualified Accounts

A qualified account is pretty much anything that has a tax advantage. Tax advantage simply means that the investments inside the account grow tax-deferred – you aren’t taxed on the growth within the account, and/or the money can be withdrawn tax-free.

There are several different kinds of qualified accounts. Instead of listing them all, I’m going to list a few of the common ones and link to an article containing all the accounts and what they’re about.

  • 401k – The most common employer-sponsored retirement account. It’s not offered by all employers, but the money going into the account is pre-tax. Additionally, the money grows tax-deferred. However, when withdrawn, the money is taxable as income according to your tax bracket.
  • Traditional IRA – This is an individual retirement account. This type of account is contributed to using post-tax money, but most people are able to deduct the contribution on their taxes. However, there is a level of income when you no longer qualify for that deduction. The money is taxable when withdrawn as income.
  • Roth IRA – Also an individual retirement account, but with three key differences. One, the money that’s contributed is not tax-deductible. Two, the money is tax-free when withdrawn. Three, not everyone is eligible to open a Roth IRA once a certain level of income is reached.

Each of these plans has unique characteristics and rules. I encourage you to give this article a read to learn more about them. (Note: income eligibility for IRAs is listed in this article)

Non-qualified accounts

No bells or whistles. These accounts are designed to hold your cash, securities, and give you the ability to invest and trade.

Qualified accounts do the same thing, but have tax-advantages. Non-qualified accounts don’t.

There are usually two types of accounts: individual and joint. An individual account is for one person. A joint account is for two or more.

With a non-qualified account, there are two things you have to pay attention to.

  • Capital gains/losses – A capital gain is when you sell an investment for more than what you paid for it and a capital loss is the exact opposite. A capital gain comes in two variations. Short-term, which is when you held an investment for less than one year and is taxed at your income tax bracket. Long-term, when you held an investment for longer than one year and is taxed at a reduced tax rate.
  • Dividends/interest – These are paid by the company or fund and are taxed as income.

Tax return as savings

The last thing I wanted to talk about is your tax return and how you use it/view it. There are three types of returns. When you owe, when you break even, and when you get money back.

What I try to do, and what I generally recommend people do, is get as close to breaking even as you can. This just means you paid about the exact amount in taxes that you should have. No more, no less.

Here’s when I’m okay with people getting money back.

As a collective, we are horrible at saving money. The statistics show it. Now if you go through the year and pay more taxes than you need to and want to use that tax return as a makeshift savings account, then have at it.

My philosophy is if it helps you save money and it works for you, then do it. Some people need that type of set up.

Regular savings account don’t work for everyone because often, they are able to access the money whenever they want/need to. If you’re using your tax return as your savings vehicle, you don’t have that opportunity.

Conclusion

Love it or hate it, taxes are a part of life, and they won’t go away. There are certain strategies and certain accounts you can utilize to help make them more manageable/bearable.

If you’d like to learn more about anything discussed here and for my disclosures, visit my company’s website!

 

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Resisting Temptation: 5 Smart Ways to Use Your Tax Refund

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By trusting instinct and intuition, the right decision can become obvious from the wrong one. But desires are hard to resist. Now that your tax refund is sitting in your account, don’t let temptation overrule a smart monetary choice, and follow what your financially responsible gut tells you to do. Use five percent of your refund for a fun purchase, and feel good about investing the remaining 95 percent in any of the following:

Build Your Savings

The broken record singing “build your savings” is as tiresome as the one saying “eat a healthy breakfast.” But really, build a savings. Ideally, an emergency fund should support three to six months worth of necessary living expenses. Last year about 49 percent of employees lacked a personal safety net, according to Forbes. Use your refund to establish a savings account, and then use an app such as Saving Made Simple to help make saving a financial habit.

Get Reliable Transportation

“Car maintenance avoidance” is a real syndrome. It stems from the fear of taking your car into an auto repair shop for a brake check and coming back with 10 other costly repairs. Cushioned with your refund, a brake check shouldn’t be so daunting.

Proper maintenance helps improve the reliability, safety and longevity of your vehicle. Brake pads, rotors and tire replacements are worth the cost. After an inspection, you may even decide that buying or leasing a new car is a better investment than a repair spree. For example, use a $2,000 refund for a down payment to reduce monthly payments. A higher refund used as an initial down payment while signing can also leverage a better lease deal.

Improve Your Credit Score

Your credit score is a measurement that indicates whether you’re a good candidate for a mortgage, a loan or a credit card. The score also helps lenders determine the interest rate to charge you. A higher score provides you with better rates and more favorable terms.

Consider using your tax refund to pay off a credit card and substantially reduce your debt; it can boost your credit score, explains The Nest on Budgeting. Improve your credit by keeping the account open and lowering your credit card utilization rate, which is how much you charge/owe (outstanding balances) vs. your total available credit limit. The lower your utilization rate and balances, the higher your credit score. A utilization rate of below 20 percent is good and an average of 7 percent is best, according to FICO.

Pay off Debt

A tax refund can serve as a negotiation tool to achieve a settlement with a debt collector. Improve your financial management by offering the creditor an upfront lump sum in exchange for a smaller amount owed. Negotiate a lump-sum payment, and you could cut your debt significantly. While bargaining, exert power and hold firm. Know your rights and be aware of fictional scare tactics. Nolo, an online small business and legal website, offers a collection of articles on how to negotiate with creditors, handle tax consequences and strategize negotiations.

Make a Career Investment

Invest in your education and complete online courses to increase your future earning power and employee marketability. Expanding your skill set and advancing your education can also help you land a promotion or change careers.

Make sure that you choose a career that has a positive outlook in the future. For example, those who earn a Master of Administration degree will have multiple career paths available for them with each of them expected to experience significant growth in the coming years. These careers also pay very well, making it more likely that your investment will pay off in the end. Once you have your MBA, you can pursue jobs as a marketing manager, financial analyst, operations manager, or an IT expert, giving you a number of different options within an organization.

Last year, U.S. News & World Report broke down the cost of an online class. Writer Devon Haynie found three-credit courses that ranged between $935 and $1,320 for out-of-state students, and one community college class cost about $515. Also, university online courses cost between $300 and $400 per credit hour. While researching your options, also look for in-state colleges and apply to scholarships to keep costs even lower.

Use Tax Write-Offs to Start Your Business Off Right

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Small businesses provide 55 percent of all jobs in the United States, notes the SBA, proving the American dream is certainly alive and well. You might feel like competing with big business is not worth the hassle, but since 1990, big business has cut 4 million jobs, while small business has accounted for 23 million net new jobs since the 1970s.

But you know success does not come easy. There is always more to do and more to learn. Follow these stress-free measures to make a smashing debut as the most effectively managed small enterprise in America.

Startup Costs and Documentation

You do not need millions of dollars to start up your business. Once you have a concept in mind, create a plan for minimizing startup costs. The IRS recognizes the time and energy spent on creating a business and offers up to $5,000 in deductions for every $55,000 spent on organizing, planning and starting your business.

Be sure to keep accurate records so your deductions can be granted. Many people cringe at the prospect of documenting expenses for a business, in addition to personal expenses. Balancing your own budget is hard enough, and separating yourself from your enterprise can be daunting.

Separate Business Versus Personal Expenses

A simple solution to this common problem is creating a business expense account to track your expenditures. Certain credit card companies make this task easier by offering deals specific to small business owners. Every time you make a purchase for your business, use your business card and save yourself the hassle of juggling several bank accounts. Don’t make the mistake of combining personal expenses with your business endeavors and your purchasing history will speak for itself.

The Ticket Is Record-Keeping

Along with startup costs, there are other ways you can deduct expenses from your taxes. According to the IRS, you can write-off the business use of your home and vehicle. Some expenses, such as rent for an office, employee pay and even interest charged on money borrowed toward your business, are eligible for deductions. This is why it is profitable to keep accurate records of your transactions. Services like Intuit calculate federal and state payroll tax for you, so you’ll have a better idea of what to expect. When tax time comes, you can provide the proof needed to reap the benefits of being a small business owner.

The Public Has Spoken

Our economy depends on small business to survive. Pew Research group found 71 percent of the public held a positive view of small business, while only 25 percent thought of large corporations in the same light. Perhaps the American public is supportive of small business owners because they are like everyone else — working hard to make a living. There has never been a better time to be the owner of your own business. Go ahead, quit your day job and begin the journey of a lifetime— but don’t forget to keep your record books straight, as it will pay off in the end.

Taxes Suck! 7 Ways to Stick It To Uncle Sam

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Let’s admit it: everyone wants a lower tax bill.

Well, everyone wants the combo of mo’ money AND a lower tax bill.

Doesn’t that sound like a “have your cake and eat it, too” scenario?

Maybe. But then again….maybe not.

Too many people pay WAY too much money on their tax bill. Sometimes they pay more because of poor decisions, but often it’s just because they don’t understand how taxes work and where to look for awesome opportunities.

Here are seven of our favorites:

Do you work for the man? Try these:

Open a retirement plan and use it. The #1 way to grow your net worth and help your tax return is to stuff money into your retirement plan at work. If you’re eligible for a 401k, 403b or 457 plan, jump on that opportunity.

I’ve heard many “reasons” people don’t invest in their workplace plan. Here are a few:

I can’t afford it. Ask yourself this: how will I afford to retire when I have no money later. If you’re too poor to save now, what will you do if you can’t work later?

I don’t like my work, so I don’t want to put money in the 401k plan. Your work farms out the administration of the 401k plan to professionals. Use your workplace plan.

They don’t match. Matching contributions by your employer are gravy on top of an awesome tax shelter. Don’t worry about the match….get invested.

Take advantage of workplace pretax plans: Besides the retirement plan, there are other opportunities, such as HSA accounts. Some companies allow you to pay for everything from childcare to optical with a health spending account. Use as much of this as possible to score huge savings on these services. (If you’re in the 25% tax bracket and have a 5% state tax, you’ll save 30% on your childcare!)

Use bonuses and incentives wisely:

It’s a great day if you’re getting a stock award or bonus, but make sure you understand what you’re getting into tax-wise carefully:

Stock options or stock purchase plan: You’ll pay taxes on these plans when you sell. Having a tough year tax-wise? Don’t sell today. There’s also a HUGE difference between short term and long term capital gains rates. Wait until you’re paying the (significantly lower) long term rate before selling.

Bonus money: If you’re eligible for a big bonus but this isn’t a good year to sell, ask your boss if you can defer your bonus until the new year. Or, if you feel that your income will stay consistent, ask if you can break up a big bonus into two even halves to lower the tax impact. This strategy is best used if you’re getting a bonus at year-end (I hate deferring money in my pocket for several months….).

Have a budget? Try these:

Give to charities. Not only are you helping your community, but you’re putting money back in your pocket if you itemize. Cash gifts will obviously lower the amount of money you have overall, but gifts in kind, such as clothing, old automobiles, and items to 501c thrift stores can both lower your tax bill and remove clutter.

An increasing number of people are now donating larger items and receiving sizable tax deductions as a result. For example, if you have an old boat that you no longer use, making a sponsored boat donation could help you to save a significant amount on your taxes.

Donating a boat is a great thing to do on a number of levels, since the boat is then sold at auction with the proceeds going to charity. Then, for your donation, you receive a tax deduction that is equal to the value of the boat or the boat’s true value.

Claim ALL of your refinance costs. If you’re FINALLY taking advantage of low interest rates to refinance, remember that any points or closing costs you pay might be deductible also. Ask your tax preparer or read this IRS notice to see if you qualify.

Investments? Here are some:

Think about your dividends. I love dividends as much as the next guy, but a portfolio full of dividend-paying stocks in a non-qualified account can be a huge tax speed bump on your investment returns. If you aren’t spending the dividends today, purchase dividend-heavy investments inside of your IRA and use your non-IRA account to house more tax efficient investments.

Buy/sell creatively. If you’re finally selling your big winning stock, look for that stock in your closet that’s been horrible and has no prospects of coming back. You can cover up all of your capital gains with losses from losing stocks…and $3,000 more.

Photo: DonkeyHotey