In Part 1 of this series, we took a deeper dive into IRMAA planning and minimizing tax on your Social Security benefits. You play a large role in shaping your retirement years in terms of lifestyle and financial health. Think of taking advantage of the many techniques to lower your tax during your retirement years as another aspect of self-care. By treating your financial health and well-being as carefully as you treat your mental and physical well-being, you can ensure that you have resources to attain your financial goals and support yourself in the style for which you’ve planned. In my practice, I see a wide range of client behavior surrounding retirement – from no planning to thoughtful, long-range planning. Looking ahead, whether you’re working with your tax professional and financial team or whether you’re planning on your own, pays off enormously. Please read on for some additional tips and techniques for tax savings involving charitable giving, Roth IRA conversions, and minimizing capital gains taxes – and two more examples.

To the non-crypto enthusiast, the term “airdrop” may conjure an image of a pallet of relief supplies parachuting in from above. In the cryptocurrency world, the term has a very different meaning, but conjures the same mental image. In the simplest terms, a crypto airdrop is a token that appears in your wallet without being purchased, although in some cases additional actions may be necessary to facilitate the transfer of the asset. An airdrop can take several different forms, the most basic of which is an unsolicited token that simply shows up in your wallet. This is typically done as a marketing campaign, to try to expand the user base of a new project. Generally, only a nominal amount of the token is distributed. Many times, this type of airdrop is done maliciously as part of a phishing or dusting attack. The vast majority of these airdrops are unwanted; they function as cryptocurrency’s version of “junk mail.” Other airdrops are used to reward users of a particular protocol for their past behavior. Typically, this will take the form of a governance token or some other newly minted token. Occasionally, the new token will automatically be deposited in the recipient's wallet, but most of the time the user will need to connect their wallet to a website and actively claim the reward. You may also be required to pay a gas fee to enable the transfer. Many airdrops of this type contain tokens of substantial value, so proper determination of when receipt takes place and what the fair market value (FMV) is can have considerable impact to tax. While the two previous examples are the most common form of airdrops, they are not limited to the above. In practice, any unsolicited token received is generally considered an airdrop. This can also apply to non-fungible token (NFT) and game-based environments. Small differences in the facts and circumstances of the airdrop may have outsized impacts on taxability and your planning opportunities. Keep reading to learn more.

An employee handbook is usually designed to cover everything a new hire needs to know to get started at their job. Depending on the size of the company “everything a new hire needs to know” can be either a vast amount of information or a much smaller amount. Many small, closely held businesses may not have an employee handbook because they don’t feel they are large enough to warrant it or they (mistakenly) believe that necessary information is getting communicated effectively and consistently to all staff members. Often having an employee handbook isn’t something most businesses think about until it’s too late (for example, when an employee files a lawsuit for discrimination or a worker’s compensation claim). Even businesses that have an employee handbook may not give it much thought once it has been developed. But developing and maintaining a useful employee handbook is just good business. Why? The employee handbook explains a company’s culture and values and is a valuable reference tool for employees looking for information on company policies. It can save management time (and money) and can help to prevent or mitigate legal issues for the company.

Question: I have a fully depreciated rental property that I purchased more than 40 years ago. What are some tax planning strategies I should consider? Answer: Congratulations! You defied the odds and the thousands of advertisements claiming that real estate investing is an easy way to get rich. But now that your precious “paper losses” a.k.a. depreciation is long gone, it’s time to search for a new way to create tax advantaged income. There are some fun ways to “re-depreciate” your investment again, and even put some of those carryovers to use. But before jumping into tax, let’s also consider your investment returns since you achieved this milestone. One issue I see many real estate investors face is that they tend to be short-sighted with their goals. You might, initially, have a goal to get rental income sufficient to cover your mortgage payments. You might have a longer-term goal of eventually having rental income pay off your mortgage. Often, when either of these events occur, I notice some investors sit back to enjoy their success. While success specifically means something different for everyone, from a wealth and tax perspective it is important to also evaluate your choices and returns on your investment. Examining the cash-on-cash return on investment is especially important for real estate investors who may not consider more than their initial down payment as their own investment. In addition, identifying loopholes which allow you to re-depreciate your property can also create significant tax benefits you cannot afford to miss. Keep reading to learn more…