Tax Strategies To Protect Your Future

• Consider an IRA for children with earned income.
  
  
• Determine which type of IRA is best for you, establish an account before the end of the year, and make your contribution before the due date of your tax return to obtain a current year deduction.
  
  
• Be mindful of distributions from your IRAs. Before age 59½, withdrawals are generally subject to penalty. And, once you reach age 70½, you must take required minimum distributions (RMDs). How much you must withdraw is based on your account balance and life expectancy.
  
  
• Think about the best ways to gradually transfer your estate tax-free. Consider establishing a gifting program under which you and your spouse transfer a combined $30,000 each year to any number of recipients.
  
  
• Make sure your spouse owns sufficient assets to take full advantage of your potential estate tax exemption if he or she predeceases you. Make gifts to your spouse that qualify for the marital deduction, if necessary.
  
  
• Contribute the maximum amount allowable to a tax-deferred retirement plan, including "catch-up" contributions if you are 50 or older.
  
  
• Create a business succession plan. For succession planning ideas, click here.
  
  
• Set up a trust to meet your long-term financial goals.
  
  
• Consider your life insurance needs in light of the estate and gift tax changes. Life insurance can provide a valuable hedge if you die before the estate tax unified credit increases sufficiently to shelter your estate from taxation.