Category: Financial planning
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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…