How to Avoid the Annuity Death Benefit Tax

How to Avoid the Annuity Death Benefit Tax

The annuity death benefit tax applies to death benefits paid to a beneficiary. However, there are ways to avoid paying it. One way is to name a charity as the beneficiary. Donations made to such charities are tax-free. Spouses and children are not exempt from the tax. How to Avoid the Annuity Death Benefit Tax … Read more

Payment to Spouse of Deceased Employee

Payment to Spouse of Deceased Employee

There are specific rules for making payments to a surviving spouse of a deceased employee. The surviving spouse must submit an affidavit, which must be filed with the employer and probate court. The affidavit must contain specific wording and specify the monetary limits. See also: How Much Does the Average Person Need to Retire? IRS … Read more

How Much Does the Average Person Need to Retire?

how much does the average person need to retire

A new survey by Charles Schwab found that the average American needs $1.7 million to retire. Unfortunately, most people don’t reach this goal. According to the study, more than half of American workers contribute 10% or less to their 401(k)s. Luckily, there are plenty of resources to help you make the most of your retirement … Read more

Non-Qualified Annuity Death Benefit Taxation

Non-Qualified Annuity Death Benefit Taxation

A non-qualified annuity is one that is purchased using pre-tax funds. The earnings and principal will be taxed at your normal income tax rate. On the other hand, when you withdraw a death benefit from a qualified annuity, the earnings and principal will be taxed at the highest rate. See also: Variable Annuity Death Benefit … Read more

Variable Annuity Death Benefit Taxation

Variable Annuity Death Benefit Taxation

Variable annuities can be owner-driven or annuitant driven. In both cases, the death benefit is paid when the owner or annuitant dies, whichever is earlier. For instance, assume that Mary is the annuitant. When Mary dies, Ed will receive at least $100,000. The death benefit is taxable. See also: Adjusted Basis of Home Sold IRS … Read more

Adjusted Basis of Home Sold

Adjusted Basis of Home Sold

If you have recently sold a home, you should adjust the basis of the home sold to reflect the improvements you made. To find this out, you can look up the sales price online, or contact your realtor or broker. If you do not have a record of the sale, you can check the county … Read more

IRS Cost Basis of Home

Capital Gains Tax and the Cost Basis of Home

The cost basis of a home is based on the original cost of the house and includes certain settlement and closing costs. It also includes the cost of improvements and additions to the home that add to its value and extend its useful life. While improvements and additions increase the tax basis of a home, … Read more

Limitations of the IRS Step-Up in Basis

Limitations of the IRS Step-Up in Basis

The IRS step-up in basis allows you to increase the basis of certain assets and defer the tax on any gains that result. However, there are certain limitations. For example, if you own community property or have low-basis capital assets, you cannot claim the step-up basis. See also: Tax Benefits of Stepped-Up Basis Inherited Property … Read more

Tax Benefits of Stepped-Up Basis Inherited Property

Tax Benefits of Stepped-Up Basis Inherited Property

If you have inherited property, you can take advantage of a stepped-up basis. If the property has a stepped-up basis, you will receive a tax deduction if you sell it for less than its stepped-up basis. However, you must be aware of the tax implications of this benefit. See also: Roll-Up Death Benefit Riders Enhanced … Read more

Variable Annuity Stepped-Up Death Benefit

Variable Annuity Stepped-Up Death Benefit

Stepped-up death benefits are offered by some variable annuities. These benefits are based on the highest value of the account during a given time period. These benefits are generally higher for higher-risk annuities. They can also be provided annually. This type of benefit is available for variable annuities and fixed-indexed annuities. See also: Roll-Up Death … Read more

Roll-Up Death Benefit Riders

Roll-Up Death Benefit Riders

A roll-up death benefit rider is an insurance policy that guarantees a minimum rate of growth. The rider ensures that the initial deposit will grow annually. A basic death benefit product will pay out the maximum value of the fund unit at time T (net of fees), and the amount will be based on R … Read more

Enhanced Death Benefit Rider Annuity

Enhanced Death Benefit Rider Annuity

If you’re looking to increase your death benefit, you may want to consider an enhanced death benefit rider annuity. These products have different features, and the details of the rider may differ depending on your state. Some important factors to consider include the minimum death benefit amount, step-up provision, and whether the product has a … Read more