Princeton Asset

Category: tax

  • The Curious Case of OBBBA Tax Savings

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    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…

  • Tax Gain Harvesting: Extreme Caution at Long Horizons

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    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…

  • IRS Notice 2022-6: Missing Annuity Payment-Timing Convention Creates Systemic 72(t) Penalty Risk

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    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…

  • How Roth Conversions Affect ACA and IRMAA Subsidies

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    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…

  • A Guide to U.S. Income Categories for Tax Planning

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    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…

  • Understanding the Child Tax Credit and Other Dependent Credit

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    Navigating the tax system can be complex, but understanding tax credits like the Child Tax Credit (CTC) and the Other Dependents Credit (ODC) can significantly impact your tax bill. This post clarifies these credits, detailing who qualifies and how they work, including the often-overlooked scenario of older, disabled dependents. Child Tax Credit: not only for…

  • Decoding your W2: a guide to understanding your wage and tax statement

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    The W-2 form – is a document we are likely to see at least once a year, but do you truly understand what it all means? This seemingly simple form is a crucial record of your earnings and taxes withheld throughout the tax year. Understanding the different boxes and codes on your W-2 is essential…

  • How to choose the right Tax Filling Status

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    As the tax season approaches, it’s essential to understand the different filing statuses available to you and how they can impact your tax liability. In this article, we’ll break down the five filing statuses: single, married filing jointly, married filing separately, head of household, and qualifying surviving spouse. We’ll also discuss how to choose the…

  • Smart Tax Planning: how our “Income Tax Calculator” can help (01/25 release)

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    Introduction: Tax planning is a critical part of financial success. Whether you’re working, investing, or preparing for retirement, understanding how taxes impact your income is essential. Princeton Asset’s Income Tax Calculator is designed to help users gain deep insights into their tax situation by offering a comprehensive and customizable approach to tax estimation. Key Features…

  • United States: a brief capital gains tax history

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    Introduction: Capital gains taxes, a subject of much debate and often misunderstood, have a long and complex history in the United States. Far from being a static concept, the way we tax profits from investments has changed dramatically over the decades, reflecting evolving economic theories and political priorities. Let’s take a look… Early Days and…