Inflation has been a dark cloud over the economy for a few years now. But even the darkest cloud must have at least a little bit of silver lining – and the IRS has adjusted income tax brackets for 2024 upward by 5.4%, based on the consumer price index (CPI).

2023-2024 Income Tax Brackets

Income Tax Brackets – 2023 – 2024:

  Income Thresholds
  Individuals Married Filing Jointly
Income Tax Rate 2023 2024 2023 2024
37% $578,126 $609,351 $693,751 $731,201
35% $231,251 $243,726 $462,501 $487,451
32% $182,101 $191,951 $364,201 $383,901
24% $95,376 $100,526 $190,751 $201,051
22% $44,726 $47,151 $89,451 $94,301
12% $11,001 $11,601 $22,001 $23,201
10% $11,000 or less $11,600 or less $22,000 or less $23,200 or less

Standard Deduction:

Standard DeductionThe standard deduction is also increased – for individuals, to $14,600 for 2024 from $13,850 for 2023; for married joint filers to $29,200 for 2024 from $27,700 for 2022. Taxpayers over age 65 can claim an additional standard deduction amount of $1,950 for single filers and $1,550 for an individual joint filer.

Gift & Estate Exclusions:

Gift & Estate ExclusionsThe annual gift tax exclusion will rise to $18,000 from 2023’s $17,000 limit.

The estate tax threshold will increase to $13,610,000 per individual from $12,920,000 in 2023.

Alternative Minimum Tax:

AMTThe Alternative Minimum Tax (AMT) exemption for 2024 is increased to $85,700 from $81,300 in 2023 for individuals, and to $133,300 from $126,500 in 2023 for married couples filing jointly. Phase out begins at $609,350 for individuals and $1,218,700 for married joint filers, compared with $578,150 and $1,156,300 in 2023, respectively.

Final Thoughts

Tax Planning
These, of course, are only some of the significant changes the IRS has announced for 2024. Most tax credit limitations have been increased for 2024, though some items are by statue not indexable to inflation.

In addition, if you itemize, we want to remind you that one of the provisions of 2017’s Tax Cuts and Jobs Act (TCJA) was to remove the limitation on itemized deductions. Take advantage of this lesser-known benefit while it lasts!

There may be additional opportunities to leverage these increases to find you ways to keep even more of your hard-earned money – consult with your virtual CFO or financial planner to develop the best strategy (or strategies) for you and your family.

If you are interested in developing new tax planning and estate strategies for 2024, or updating your existing plans, please click here to email us directly – we are here to help .

Until next time –



We hope you have all enjoyed carnival season, and will through its culmination with tomorrow’s Mardi Gras.

Mardi Gras can happen any Tuesday between February 3 and March 9. This is because it is tied to Easter, which in the canonical calendar is celebrated the first Sunday following the first full moon after the Vernal Equinox. In between these two celebrations is the season of Lent, of repentance, atonement, and fasting.

Some claim Mardi Gras – and Carnival season – descends from such pagan traditions as Saturnalia and Lupercalia (this last was a Roman festival celebrated on February 15), and incorporated, as many pagan holidays were, into the Christian religion and calendar. The word “carnival” does derive from the Medieval Latin carnelevamen, roughly translating to “doing without flesh,” as in those days Lenten fasting meant no eating of warm-blooded animal protein for the duration of the season.

It is certain, though, that in 1582, under Pope Gregory VIII, Mardi Gras was established as part of the canonical calendar, and that it has been celebrated in New Orleans, in one form or another, since at least the 1730s.

Of course, this is a special time for us in New Orleans. We take our kids to the parades to watch their eyes get bigger as the floats go by, collect throws, attend historic balls.

We feast, we make merry.

We also put things off, sometimes. And one of the things we may be putting off is thinking about our income taxes.

So, just a gentle reminder – after Ash Wednesday, please get us your personal and business tax information as soon as you can, so we can get to work for you.

How does your family celebrate this very, very New Orleans holiday?

Click here to email me directly – I’d love to know your traditions.

Until next time –



On Tuesday, January 16, 2024, Chairman Jason Smith (R-Missouri) of the House Ways and Means Committee and Chairman Ron Wyden (D-Oregon) of the Senate Finance Committee announced agreement on a ~$78 billion deal for tax relief, both for businesses and families.

On Friday, January 26, 2024, the Ways and Means Committee approved the resulting bill, with a vote of 40-3, and on Wednesday, January 31, the House of Representatives passed it, 357-70. The legislation would amend, in part:

Business’ Research & Development (R&D) Expenses:

R&D Expenses
Prior to enactment of the TCJA, Section 174 of the Internal Revenue Code (IRC) enabled businesses to deduct 100% of R&D expenses in the year they were incurred.

After the enactment of the TCJA, – i.e., under the law at present – most R&D expenses incurred for tax years beginning after December 31, 2021, must be amortized over a 5-year period (15 years in cases where certain R&D or experimental expenses are attributable to foreign research), beginning at the midpoint of the tax year in which the expenditures were made or incurred.

The proposed changes would restore R&D expenses to full deductibility in the year the expenditures were made through the tax year ending December 31, 2025 – including, retroactively, tax years 2022 and 2023.

According to the R&D Coalition, a cross-industry partnership among small, medium, and large business concerns, every $1 billion spent on R&D supports ~17,000 U.S. jobs earning ~$1.4 billion.

Industries Benefitting from R&D Tax Relief:

One of the beauties of R&D tax relief is that many industries will benefit. Some R&D-heavy industries are:

  • Technology & software
  • Manufacturing
  • Pharmaceuticals and biotechnology
  • Agriculture
  • Construction

Business Interest Expense Limitation:

Business Interest Expense Limitation
IRC Section 163(j) limits the deduction of certain business interest expenses. Prior to 2017, these limitations were largely in place to prevent multi-national entities from shifting earnings to lower-tax jurisdictions from higher-tax jurisdictions. The applicability of Section 163(j) was limited only to certain entities and under specific conditions.

However, the TCJA made significant changes to Section 163(j), applying limitations to the deductibility of business interest expenses to all U.S. businesses, starting with tax year 2018.

The Tax Relief of 2024 proposes to restore a less restrictive limitation on business deductions for net interest expense, returning to a 30 percent limit based on EBITDA (earnings before interest, taxes, depreciation, and amortization) rather than EBIT (earnings before interest and taxes); the tighter limitation based on EBIT took effect beginning in 2022, and the proposal would allow companies an election to use the looser limitation for 2022 and 2023 and require the EBITDA-based limitation for 2024 and 2025.

100% Bonus Depreciation:

100$ Bonus Depreciation
Under the TJCA, qualified property placed into service after September 27, 2017 and before January 1, 2023 (January 1, 2024 for certain longer-production property and certain aircraft) were eligible for 100% bonus depreciation in the year the property was put into service.

This bonus depreciation was to phase down by 20% each tax year beginning with 2023. The bonus depreciation was to have been as follows:

  • 2023 – 80%
  • 2024 – 60%
  • 2025 – 40%
  • 2026 – 20%
  • 2027 – 0%

Under the proposed bipartisan tax relief, as proposed, the 100% bonus depreciation would be extended to include property placed into service after December 31, 2022 and before January 1, 2026 (January 1, 2027 for the longer-production property and aircraft as noted above).

Other Notable Business Tax Relief Provisions:

These include:

Increased Limits on Expensing Depreciable Bonus Assets:

Depreciable Bonus Assets
IRC Section 179 permits expensing the cost of qualifying property rather than recovering the cost via depreciation. Under current law, the expensing of such costs was capped at $1 million per tax year for tax year 2018, and was limited to cover qualifying property costing $2.5 million per year. These amounts were adjusted for inflation; the expense for 2023 was limited to $1.16 million, and the cost total qualifying property limited to $2.89 million.

The proposed tax relief would increase the expensing of qualifying property for 2024 to $1.29 million, with a cost cap for such property of $3.22 million. These amounts would be inflation-adjusted for tax years after 2024.

Increase in 1099-NEC and 1099-MISC Reporting Threshold:

1099 Threshold
For tax years beginning after December 31, 2023, the threshold for requiring the issuance of 1099-NEC and 1099-MISC forms would rise from $600 to $1,000 (which we think almost everyone we know would be glad of!).

There is, of course, much more in the tax relief proposal, including an expansion of the child credit and increased funding for low-income housing, among other items.
The proposed tax relief is in theory effectively revenue-neutral, its costs to be offset by changes to the Employee Retention Tax Credit (ERC).

Final Thoughts

There is much still to be worked out, and we will wait with interest for further details as they emerge. There is at this point some pushback in the Senate against the delicate balance of competing interests, and there is no guarantee the House bill will result in enacted legislation.

However, we think this would be a step in a good direction for the nation and the economy – in other words, for all of us. And there is a lot here that businesses can, should all the business-friendly provisions of the proposal be enacted into law, leverage to their benefit – it wouldn’t hurt to consult your CPA now, rather than waiting, particularly if there may be a need to amend prior-year tax returns.

Having passed in the House Ways and Means Committee by a vote of 40-3 on Friday, January 26, 2024, the bill for tax relief has moved to the full House of Representatives for a vote.

Stay tuned for further information as it becomes available.

If you would have any questions concerning how one or more of these provisions could be leveraged to your business’ benefit, please click here to email us directly – we are always here to help you!

Until next time –



The IRS has increased retirement plan contribution limits for 2024, adjusted for inflation (it’s a tiny scrap of silver lining, but let’s be thankful for it anyway).

The 2024 contribution limits are:


Traditional and Roth: the 2024 annual contribution limits rise to $7,000 from $6,500 for those under 50, while those age 50+ can contribute an additional “catch-up” of $1,000 per year, for a total contribution limit of $8,000. Note that this limit applies to all IRAs held by a single taxpayer, not each individual IRA – i.e., if you want to contribute to more than one IRA in 2024, the total amount contributed cannot be more than the limit for your age ($7,000 or $8,000, depending on whether you are over or under 50).


The contribution limit for 2024 (made by the employer on behalf of an employee) is the lesser of 1) 25% of the first $345,000 of compensation (with some minor adjustments), or 2) $69,000 per employee (an increase from the 2023 limit of $66,000). No catch-up contributions are permitted.


The 2024 maximum contribution will rise to $16,000, up from $15,500 for 2023. If you are over 50, a catch-up contribution up to $3,500 – unchanged from 2023 – is permitted.

Employer-Sponsored Retirement Plans:

The 2024 contribution limit for 401(k), 403(b), and most 457 plans will rise from $22,500 in 2023 to $23,000 for employees under 50. For those over 50, a catch-up contribution up to $7,500 annually is permitted – no change from 2023 – allowing you to contribute up to $30,500, assuming your employer-sponsored retirement plan is structured to allow catch-up contributions.

We strongly recommend contributing the full amount available to you into your retirement account(s) – as close to the limits as possible, if you can’t absolutely max out.

Further, we would advise checking into all retirement options available through your employer – public schools, colleges, universities, churches, hospitals, and other tax-exempt organizations may offer more than one option, including 401(k), 403(b), and/or 457 plans, and may also allow you to participate in and contribute to more than one employer-sponsored plan – e.g., offering you both a 401(k) and a 403(b) plan.

If you have both a 401(k) and 403(b) plan account, be aware that the total annual contribution to these employer-sponsored retirement plans is $23,000 for 2024 – or $30,500 if you are over 50. However, it may still be a good idea to have more than one employer-sponsored plan account, especially if one or more of the plans does not allow catch-up contributions. In such a case, you can contribute the amount of your catch-up to the second retirement plan account – the IRS permits you to treat this additional contribution as a catch-up for their purposes, even if your plan does not.

However, if your employer offers you both a 401(k) plan and a 457 plan, a deferred compensation plan, you can contribute $23,000 to each plan in 2024, not counting catch-up contributions. If you have this option available, and are over 50, you can contribute up to $30,500 tax-deferred to each account for 2024 – $23,500 plus $7,500 in catch-up. This would mean that, for those over 50, a total tax-deferred contribution of $61,000 can be made for 2024.

Final Thoughts

Retirement Plans
There are certain strictures and limits on income eligibility to be able to fully deduct contributions from your taxable income for some retirement plans. Consult your virtual CFO or financial advisor to ensure you get every possible benefit you are legally entitled to.

If you have any questions on leveraging these new contribution limits to maximize your retirement assets, reduce your tax liabilities, and plan for a secure and happy retirement, our vCFOs / financial planners are always here for you.

Please click here to email us directly – let us know how we can help .

Until next time –



As virtual CFOs, we meet a lot of business owners, obviously. Many of them are eager to grow their businesses. Some, but not all, owners of small and medium-sized businesses have the best mindset for growth – and those who don’t have that mindset can acquire it if they want to.

You Have to Decide

Some business owners truly enjoy being a one-person operation. It provides a certain control that many entrepreneurs are comfortable with. You know your own capabilities, you are the ultimate known quantity in a team member. There is not a thing in the world wrong with staying in that lane!

But, bear in mind that not every hat you will have to wear will fit your head equally comfortably. You, and only you, will be responsible for:

One-Man Shop, or Growth?

  • Sales and marketing, which, while two prongs of the same fork, are two different tasks with their own responsibilities.
  • The work you are marketing and selling – every bit of it. You have no-one to delegate to.
  • Your bookkeeping (this is a bigger job than you might imagine, when you consider you will be making deposits, scheduling payments, reconciling bank and credit card statements, updating customer and vendor accounts, etc., etc., etc.).
  • Fielding telephone calls, and returning calls to those who’ve left voice messages.
  • Monitoring and replying to emails.
  • Dealing with at least some of your IT needs and issues.
  • Handling all customer service – not just the work itself, but the effort that is always needed to ensure a customer is satisfied, feels that their worries have been heard and their needs will be met.


Your other option as a closely-held business owner, is, rather than to remain a rugged individualist, to choose a team approach (see below).

I Want to Grow! How Do I Start?

First things first – in order to grow in a directed and focused way, which will lead to the fulfillment of your goals, you need:

I Want Growth!

  • A clear culture for your business, based upon your core values, and a clear understanding of whom you want your business to serve.
  • A vision of where you want to take your business – that’s your overall goal.
  • A strategy designed to get you there – the interim goals – monthly, quarterly, annually, which will mark your progress.
  • A plan for implementation to ensure those goals are met. We strongly recommend monthly or at least quarterly goals, to be reviewed at the end of the period, so that you can analyze your progress.


You’ll keep tracking that progress as you move from one goal to the next, monitoring where you are, where you need to get to as the next stage, and making sure you know what steps will get you there.

Build a Team

To best scale your business up, you need one thing further, and it’s absolutely key. You need a team to help you achieve your ultimate goal, and you want the very best team you can assemble to help you do it.

Build Your Team!

Because that goal is going to require that your mind is available for big-picture thinking. You can’t be mired in the details of reconciling your operating account (focusing in) and look to the horizons for opportunities (focusing out) at the same time.

That is the difference between working in your business and working on your business. Your team is there to do the former, while you devote your efforts to the latter.

The work gets done, the clients are happy, and you are out there promoting the business and seeking out new ways to grow. Your team grows, both in numbers and personal development, as its members take on more and more responsibility and more and more work comes in to be delegated. Everyone benefits you, your clients, and your team!

Final Thoughts

A one-person shop is great. So is growing a business. It is for you alone to decide what you want, what you are best at, what fulfills your life and brings you joy.

Solving Others' Problems
Also, and this is my own take, applicable (or not, as you please) to all business owners – if you are going to run a business, no matter its structure or purpose, you are going to be making your living solving other people’s problems. My experience is that, if you embrace that as purpose, you will achieve better business results than if you are merely looking for the money brought in.

Maybe that is because focusing on the work, rather than the reward, making that the center of your mindset, means the client’s needs come first. And a client who feels heard and helped, who feels it matters to you that their needs are met, is likelier than not to come to you when a new need arises.

Interested in scaling your business? Give us a call and let RFG’s team be part of your own – we can help you grow, and would love to do just that!

Please click here to email us directly – let us know how we can help you.

Until next time –



One of the things we do as virtual CFOs is look at cash flow. Cash is the lifeblood of any business, and its proper cash flow management is key to your business’ health and growth.

How Do You Monitor and Manage Cash Flow?

A business’ cash flow must be looked at in view of the specifics of the individual concern, the industry, etc., but there are a few things every business owner should do:

Monitor Cash Flow

  • Reality-based monthly budgets and forecasts should be prepared.
  • Review these against your business’ actual results regularly – at least quarterly, monthly if possible, and update your budgets and forecasts as indicated going forward.
  • Create a dashboard to track your business’ cash flow across all accounts, as well as your receivables and payables, and review these weekly, if not daily.

Keep Separate Bank Accounts

Keeping cash in separate accounts for separate uses is a good way to keep track of funds, and ensure you segregate your funds so that they’re only used for the right purposes:

Keep Separate Bank Accounts

  • Keep an operating account for customer payments and expense outlays. This may or may not include your payroll – many companies find that a separate payroll account is very helpful, but not all smaller businesses will need this.
  • You should also have a money market account, and make automatic, regularly scheduled deposits to it. You can add extra funds to your money market account when you have an especially good month, quarter, etc. A money market account for your business is very much like your own personal savings account – it’s there for emergencies, for carefully considered business investments, and other expenditures outside the normal day-to-day operations of your company. In addition, many money market accounts are currently paying ~5%, which is an added bonus for your business.
  • An account for employee bonuses can be useful – and, as a side note, bonuses can be an excellent way to attract and retain the kind of talent you want in your business.
  • Especially if you are a sole proprietor, a separate account for your own income tax liabilities (which must be paid with estimated quarterly tax payments) is also a good idea.
  • If your business owns any rental property, that income and related expenses should be segregated into an account dedicated to the purpose.


Don’t Finance Clients’ Business Operations

Again, your company’s cash is its lifeblood. When you do work upfront and get paid after completion, you are effectively financing your clients’ businesses at the expense of your own – which is not what they pay for with your services – unless you are a bank, lending money at a market rate of interest.

To help minimize this, you have some options:

Get a Retainer!

  • Get a retainer from your client before commencing work – this makes for fairer timing between the work being done and payment being received.
  • If you don’t get a retainer, specify that your invoices are due upon receipt.
  • At the very least, ensure that your billing and payment terms are clearly communicated to your clients, and that the clients understand them.
  • Give clients, upfront, an estimate of the likely cost of the work to be done.
  • Consider charging interest on invoices with payments not made according to your agreed-upon payment terms (this doesn’t work for every business, but if it does, it’s a tool you can use).


It is key to get all provisions for retainers, estimated costs, and billing and payment terms down in writing, in a document (e.g., an engagement letter, a proposal, etc.) which is signed by both you and your client.

Pay Yourself First!

Pay Yourself First!
Meeting payroll is the first responsibility of every business owner – but make sure you are at the top of that payroll. Every worker is worthy of his/her hire (replace them if they are not!), and you are no less a worker your business – nor any less worthy – than your team members. If it weren’t for you and your business, their jobs wouldn’t exist.

Of course, these are only suggestions with general applicability – for specifics relevant to your unique business, give us a call and find out how our virtual CFO services, whether comprehensive or limited in scope, can help you take charge of your business’ cash flow.

Please click here to email us directly – let us know how we can help you.

Until next time –



1040-ESWhile inflation will have a positive impact on your 2024 retirement contribution limits, and possibly your income tax bracket (watch for our posts on these topics in the coming weeks), there’s one inflationary factor pertinent to income taxes that’s a pure negative for those who didn’t make sufficient estimated quarterly income tax payments, as well as those who have under-withheld their tax payments via their employers.

A Pay-As-You-Go (or Pay-As-You-Earn) System

In the United States, taxpayers are required to pay taxes during the year as they earn and receive income.

  • If you work for an employer, your salary or wages are taxed according to the W-4 you file with your employer annually. If you receive bonuses or commissions, you may want to recalculate and file a new W-4 during the year, to ensure you are not underpaying your tax liabilities.
  • If you are self-employed, or have income not subject to withholding, such as interest, dividends, and/or capital gains, you may be required to file estimated quarterly tax payments to avoid being assessed interest (or a penalty) on the amount you underpaid for the quarter.

What is the “Penalty,” Really?

PenaltyThe underpayment penalty for estimated taxes is, in actuality, interest charged on tax underpayments in a given quarter. The rate at which this “penalty” is calculated is equal to the federal short-term interest rate plus 3%, and is recalculated by the Internal Revenue Service (IRS) each quarter. The IRS calls this assessed interest a penalty, despite it being calculated as interest.

Rising Interest Rates Impact Everything

Rising Interest RatesAnd this includes the interest rate (penalty) assessed for underestimating your total annual federal income tax liabilities when paying your income taxes, whether via employers’ tax withholding or quarterly estimated tax payments. This penalty is assessed on the amount by which you underestimated/underpaid your federal income tax liability for the quarter in question:

  • For 2021, the rate, which is based upon the federal short-term interest rate plus 3%, stood at 3%, as it had since the second quarter of 2020.
  • During 2022, the rate for the first quarter remained 3%. However, the rate increased by 1% each quarter thereafter for the year, ending at 6% for the fourth quarter of 2022.
  • For 2023, the rate rose in the first quarter to 7%, and for the fourth quarter, the rate is 8%. The last time the interest rate (penalty) for underpayment of federal income taxes was this high, the period in question covered the third quarter of 2006 through the fourth quarter of 2007.
  • For fiscal year 2022, the IRS assessed over $1.8 billion in penalties for estimates tax underpayments on ~12.2 million individual income tax returns.
  • The estimated income tax payment for the fourth quarter of 2023 is due on Tuesday, January 16, 2024 (Monday, January 15, is a federal holiday, celebrating Martin Luther King, Jr.’s birthday).

How to Avoid IRS-Assessed Interest on Underpayment of Your Income Taxes

PaymentThe best way to ensure you aren’t assessed interest (penalty) for underpayment is – don’t underpay! Of course, that’s easy to say, and harder to ensure, especially if your income fluctuates over the year. We recommend you seek the guidance of your CPA, and provide him/her with all relevant data, including paystubs, cash receipts, investment account statements, etc.

However, there are a couple of methods which simplify paying your estimated taxes, also known as “safe harbor” provisions. If:

  • Your final individual income tax return shows taxes due of less than $1,000,
  • You paid the lesser of 90% of the income tax liability for the current year, or 100% of the income tax liability for the prior year, or
  • You are a high-income individual, earning an adjusted gross income (AGI) of $150,000, or $75,000 for married taxpayers filing jointly, and paid 110% of the income tax liability for the preceding tax year,


You may not be liable for an income tax underpayment penalty.

Can an Assessed Interest (Penalty) on Underpayment of Income Taxes be Removed or Reduced?

Under certain circumstances, the answer may be “yes.” There are certain circumstances which the IRS recognizes as potentially or actually beyond a taxpayer’s control, which may make it difficult to meet estimated income tax payment obligations in a timely manner. In such cases, the IRS may reduce or rescind the assessed penalty. Some of these circumstances include:

  • If you (or your spouse, if you file jointly), retired during the prior two years and had reached the age of 62, and had reasonable cause (such as the serious illness or death of an immediate family member, or other unforeseen situation) to underpay your estimated taxes, or to pay estimated taxes late (such as , you may be eligible for penalty relief.
  • If you had most of your income tax withheld early in the year, rather than spreading it out equally, a quarterly interest assessment (penalty) for underpayment of estimated tax may qualify for relief.
  • If the underpayment resulted from a casualty (such as your home being damaged by fire), a local natural disaster, or other unusual circumstance under which the imposition of interest on the underpayment of income tax (penalty) would be considered unfair (by the IRS, or as specified under specific official authorization(s) to provide such relief).

Final Thoughts

Again, we strongly urge you to seek the guidance of your CPA. S/he can help you most accurately determine your estimated income tax liabilities and provide estimated payment amounts. If your income derives from multiple sources, and especially if it comes from various different types of income (e.g., salary or wage earnings, income from outside your employer-paid salary or wages, and/or investment transactions whereby capital gains or losses are realized), your CPA can help you navigate the various tax withholdings, estimated tax payments due, and liabilities involved.

Do you wonder whether you might be underpaying your income taxes? Call RFG – we are tax experts, very old hands at calculating estimated income tax and estimated income tax payments, and ready to be at your service!

Or, click here to email us directly – helping you is why we are here!

Until next time –



The new year is coming fast, and the old on its last legs. Thinking about that reminded me of Marcus Aurelius’ famous quote, “Memento mori,” which reminds us what being mortal means.

And none of us has managed to figure out how to get younger.

This year, instead of charging off with resolutions to do, let’s instead make a resolution to think.

About how we want to spend the rest of our lives.

About what that would look like.

About what that would feel like.

And how we might make it all happen for ourselves.

Only then can we really make the meaningful, mindful resolutions which will help get us there.

Let’s take stock of what matters most to us (and our goals are as individual, as unique, as each of us is).

Where, how, with whom, doing what, do we want to spend the rest of our limited time on this earth?

How do we get to the point where we can say, with truth, “I did what I could with what I was given to work with?”

Most of us need to work, but we can make sure that work is worthy of our time, our focus, our efforts, our energy.

And let’s not neglect our passions – we are drawn to do things for a reason, and I think we should respect that, even if the reason isn’t something we can easily decipher.

If we have a strong desire to paint pictures, to write books, let’s do that, and honor this crucial part of ourselves.

But let’s approach it – all of it, our vocations and avocations, our family lives, our friendships – mindfully, intentionally, so that we ensure no year of our lives fritters itself away and leaves us no closer to our ultimate goals.

In other words, let’s, all of us, make 2024 count!

Please click here to email me directly – I’d love to know your goals, your thoughts, and your plans.

Until next time –

Peace, happiness, prosperity, and fulfillment in 2024,


We’d like to discuss Roth IRAs, this week, and their advantages and disadvantages.

Roth IRAs

As most of you know, for Roth IRAs:

  • Contributions are made in after-tax dollars.
  • Distributions from a Roth IRA, if taken after age 59½ and providing the assets have been held for at least 5 years in that Roth account, are entirely free of income tax liability.
  • There are no required minimum distributions (RMDs) for the original account owner; therefore, the assets can continue to grow after retirement, with no tax liability to the account owner.

As with all IRAs, a Roth IRA with a properly designated beneficiary or beneficiaries does not go through the probate process.

Who is Eligible for a Roth IRA?

That’s a question with a two-part answer.

  • To be eligible to open or contribute to a Roth IRA, you must earn less than $153,000 as an individual, or less than $228,000 for married couples who file jointly (2023 limits).
  • However, if you are over the thresholds above, you have the option of converting part or all of your current IRA-held assets to a Roth IRA.

What Happens When You Convert to a Roth IRA?

The principal event triggered by converting a traditional IRA to a Roth IRA is the recognition of the pre-tax dollars you contributed to your retirement accounts as current taxable income – so these conversions may in some cases best be done in stages or tranches, so as not to incur a huge tax liability all at once.

Why Might You Want to Convert to a Roth IRA?

Traditionally, IRAs have been considered a great way to reduce taxes overall, as contributions are made with pre-tax dollars, and in the general way of the world, a retiree’s income tax bracket usually drops a level or two. Therefore, post-retirement withdrawals from your IRA would in theory be taxed at a lower rate than you would have incurred on those funds if you had not made the tax-deferred contributions to your IRA.

And Roth conversions are not for everyone. But, if you are more than 5 years away from retirement, have a high income and a healthy balance in your tax-deferred IRA, and expect your income tax rate to rise in the coming years, a Roth conversion of all or part of your current IRA-held assets might be for you.

Remember, tax rates may increase in the near term, given:

  • The current economic climate.
  • The Federal budget deficit.
  • The looming Presidential election coming in roughly 12 months.
  • Income tax rates are in fact on course to revert to the levels in effect prior to the enactment of the Tax Cuts and Jobs Act (TCJA) effective January 1, 2026.

So you may not find that your post-retirement tax bracket is not lower, or not much lower, than your tax bracket during employment, although Congress may act to extend the TCJA tax cuts for individuals.

What Are the Upsides to Converting to a Roth IRA?

Some of the benefits include:

  • Distributions taken after age 59½ from a Roth IRA are tax free, unlike tax-deferred IRAs, provided the assets have been be held in the Roth IRA for five years. Earlier withdrawal of these funds results in a 10% tax penalty – but no income tax liability.
  • The original owner of a Roth IRA is not required to take minimum distributions (RMDs), unlike tax-deferred IRAs from which RMDs must be taken starting the year after you reach age 73, with a hefty 50% penalty if you don’t. So, you can effectively make a tax-free gift of a Roth IRA to your heirs in entirety, if you so choose.
  • Distributions are also tax-free to certain beneficiaries, such as your spouse, over their lifetime.
  • Other beneficiaries, including minor children, can also take tax-free distributions from the Roth IRA, though adult non-spousal beneficiaries, including children once they reach the age of majority, must in most cases take distribution of their entire portion over 10 years.
  • Converting to a Roth IRA can reduce your estate taxes by the amount of income tax you paid in connection with the conversion. The estate exemption for 2024 of $13.61 million for individual tax filers ($27.22 million for married taxpayers who file jointly) is, like other provisions of the TCJA pertaining to individual income taxes, set to drop to an estimated ~$6.8 million for individuals or ~$13.6 million for married couples as of January 1, 2026.
  • Another benefit of converting your tax-deferred IRA to a Roth IRA is that, by naming your child (or children) as beneficiaries, you can effectively make a tax-free gift to them, without the necessity of filing a Gift Tax Return.

What are the Downsides?

There are some drawbacks to converting to a Roth IRA:

  • The most obvious is that you will have to pay income tax on the full amount of retirement assets converted – and you will need the cash available to pay these taxes from a source outside your retirement account(s). However, if you are considering converting to a Roth IRA, you may want to consider doing so before the TCJA tax cuts expire.
  • Since the value of the assets converted is considered taxable income in the year you convert, you could find yourself in a higher income tax bracket this year, and pay higher taxes on all your current-year income – if you aren’t already in the highest bracket. We recommend you consult closely with your financial advisor when considering a Roth conversion, so that you are fully informed and there are no surprises.

If you are considering converting retirement assets to a Roth IRA, and want to understand the potential impact on your income tax liabilities, please click here to email me directly – I am here to help.

Until next Wednesday –



Read our prior posts relevant to Roth IRAs:

SECURE 2.0 Enacted – Key Highlights
Roth IRAs: To Convert, or Not to Convert?
Roth Accounts – New Proposed Limitations Explained