Updated Friday, September 4, 2015 as of 8:29 AM ET

Tax Planning Tips for Dividend Stocks

With domestic stocks well into the sixth year of a bull market, investors may want to shift their focus.

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Comments (2)
Married couples over 65 can have $ 96,000 of Gross Income and still be at the upper limit of the 15% tax bracket which is $ 73,800 of Taxable Income. (The standard deduction is $ 14,800 plus $ 8,000 for their two personal exemptions which would bring their taxable income down to $ 73,200.) Also, 15% of their Social Security benefits are not included in the Gross Income figure, which could be at least another $ 5,000 of un-taxed gross income.

If their taxable income will be significantly below the 15% limit, they should seriously consider doing ROTH CONVERSIONS from their traditional IRAs, especially between 65 and 70. These can be taxed at 15%, especially if this is done in conjunction with deferring Social Security benefits until 70, and after 70 1/2 their required minimum distributions from their remaining IRA will be less than otherwise. And, best of all, the future income and growth in the ROTH IRA will never be taxed to the surviving spouse or the heirs. Finally, this approach will avoiding ultimately taxing these IRA distributions at 25% or more, which will be the tax bracket of the single surviving spouse, and ultimately the heirs. dlzallestaxes@msn.com
Posted by DAVID L Z | Wednesday, August 13 2014 at 5:04PM ET
That Roth play is being used more and more by advisors around the country. The Tax Planning movement is alive and well with advisors whom are paying attention!
Paul D. Bangor Maine
Posted by paul d | Thursday, August 14 2014 at 4:17PM ET
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