Author: WP ADMIN
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The Curious Case of OBBBA Tax Savings
The 2025 One Big Beautiful Bill Act (OBBBA) reform was intended to make one of the biggest changes to Social Security taxation in decades. Most commentary focuses on the headline feature – eliminating the taxation of Social Security benefits for the majority of retirees – but the real story sits deeper in the details. OBBBA…
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Tax Gain Harvesting: Extreme Caution at Long Horizons
Many investors have heard of tax-loss harvesting, but its lesser-known cousin – tax gain harvesting (TGH) – is often misunderstood. While it might sound appealing to sell appreciated assets to reset your cost basis, the reality is that: over long investment horizons, harvesting gains can actually reduce your after-tax wealth unless your current tax rate…
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IRS Notice 2022-6: Missing Annuity Payment-Timing Convention Creates Systemic 72(t) Penalty Risk
We submitted this letter to the Taxpayer Advocate Service (TAS) systemic issue reporting process, a legitimate, formal channel to bring this problem to the attention of the IRS The ambiguity in IRS Notice 2022-6 regarding the payment timing, annuity-immediate (end-of-year) vs. annuity-due (beginning-of-year), creates significant risk for taxpayers using the Fixed Annuitization Method for substantially…
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PSA: we tested the top 6 “72(t) calculator” results on Google. All of them fail the IRS’s own reference examples.
If you’re planning early retirement with a 72(t) SEPP distribution, you need accurate calculations. We researched the topic and discovered that every popular calculator we tested produces incorrect results when compared to the IRS’s own published examples. The IRS Reference Example: What we found testing the top page Google results: Why this matters: 72(t) is one…
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Understanding 72(t) SoSEPP Distributions
For many investors, tapping retirement funds before age 59½ normally means a 10% early withdrawal penalty. But the IRS provides us with an exception: Sequence Of Substantially Equal Periodic Payments (SoSEPPs) under IRC §72(t). If you follow the rules carefully, you can set up penalty-free withdrawals before age 59½. This post explains who can use…
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How Roth Conversions Affect ACA and IRMAA Subsidies
When planning a Roth conversion, it’s easy to focus only on the income tax impact. But if you’re on ACA health insurance or Medicare, the conversion can also trigger changes in your ACA subsidies and IRMAA surcharges. In this example, we’ll quantify: Problem Setup We compare two scenarios: Our goal is to measure how much…
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A Guide to U.S. Income Categories for Tax Planning
When it comes to tax planning, not all income is created equal.Two people could both “earn” $100K a year and still end up paying very different amounts in federal and state taxes – simply because of what type of income it is. At Princeton Asset, we think the first step to building a bulletproof tax…
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IRA to ROTH conversion: The Basics
Roth conversions are often used as a retirement tax planning tool. They offer the opportunity to pay taxes now – often at a lower rate – in exchange for tax-free withdrawals later in life. In this post, we’ll walk through the standard, conventional guidance for when and why to convert funds from a traditional IRA…
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A Beginner’s Guide to Investment Account Types
When it comes to investing, choosing the right type of account is just as important as choosing what to invest in. Investment accounts come in several forms, each with its own rules, tax implications, and best-use scenarios. Whether you’re saving for retirement, a child’s education, or simply building wealth, understanding the types of accounts available…
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Healthcare costs: IRMAA premiums
If you’re enrolled in Medicare, you may have encountered the term IRMAA – the Income-Related Monthly Adjustment Amount. This additional premium can significantly impact your Medicare costs, but understanding how it works and knowing about potential discounts can help you better manage your healthcare expenses. What is IRMAA? IRMAA is an extra charge added to…