Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Instead of converting the entire 401(k) assets to a Roth IRA within a year, clients may want to consider spreading the conversion over several years to minimize the impact on their income taxes, according to Kiplinger. A Roth conversion is a wise move if clients are currently in a low tax bracket and face the possibility of getting bumped up to a higher one when they start taking distributions. -- Kiplinger
Clients may want to invest in taxable and tax-advantaged accounts for greater flexibility when tapping their retirement savings, according to MarketWatch. Advisors can help clients understand the terms and importance of their investments and strike a balance in allocating their assets in taxable and tax-advantaged accounts. -- MarketWatch
Clients can minimize their tax burden by deferring some of their income into next year, according to Medscape. They also may want to raise their retirement savings rate. Clients who own businesses may also boost their spending and have the amount included in their itemized deductions on their returns. Other tax-saving strategies are tax-loss harvesting and charitable donations. -- Medscape
Clients who are retiring have several options, including 529 Plans and ESA Coverdell accounts, that can save them on taxes, according to The Christian Science Monitor. Investing in municipal bonds, real estate and annuities can also help reduce the tax burden on retirement savings. Other tax-friendly investment options for retirement savers are master limited partnerships, whole life insurance, index funds and exchange-traded funds. -- The Christian Science Monitor