by Amanda O'Brien | Accounting News, News, Newsletter, Retirement, Retirement Savings
Key Takeaways:
- Building an income plan starts with comparing anticipated expenses to guaranteed income (Social Security, pensions) to find the gap your portfolio needs to cover.
- Investing doesn’t stop at retirement — dividing money by when you’ll need it lets short-term funds stay conservative while long-term money keeps growing.
- Traditional 401(k)/IRA withdrawals are taxed as income, Roth withdrawals are tax-free, and RMDs begin at age 73 (75 for those born in 1960 or later).
- Healthcare and long-term care can become major retirement expenses — options range from self-funding to long-term care insurance to hybrid life insurance policies.
- A will, medical power of attorney, and updated beneficiary designations round out a plan that protects both your savings and your family.
The Building Blocks of a Retirement Plan That Actually Lasts
Building a retirement plan involves more than allocating part of your paycheck to a 401(k). Once you’re out of the workforce, you need a plan for turning your savings into income, investing for the years to come, managing taxes, and covering healthcare costs. Here’s what you need to have in place to feel more prepared for what’s ahead.
Build an Income Plan
Start by determining your anticipated monthly expenses (housing, food, insurance, travel, etc.). Compare those expected expenses with guaranteed sources of income, such as Social Security and a pension. The difference between guaranteed income and anticipated expenses is the amount your savings will need to cover.
If you spend $7,000 a month and get $3,500 in guaranteed income, you’ll need $3,500 from your portfolio. Once you know that number, consider which investment accounts you’ll use to cover the gap.
At this stage of planning, some workers decide to delay Social Security to qualify for a larger monthly benefit or adjust their retirement date to improve financial stability.
Create an Investment Plan
Some people mistakenly think investing ends in retirement, but your money may need to support you for decades, so long-term growth is still important.
However, retirement can also change how much risk you can afford. Consider dividing your money according to when you’ll need it. You could hold money for short-term expenses in lower-risk options while keeping money for the future invested for long-term growth.
Taxes Should Be Part of Your Plan
Your investment accounts are all taxed differently. Withdrawals from traditional 401(k)s and IRAs are counted as regular income and generally taxable. Roth withdrawals are tax-free. Regular brokerage accounts are taxed at lower capital gains rates.
Then there are Required Minimum Distributions (RMDs). Starting at age 73 (75 if you were born in 1960 or later), these mandatory withdrawals can increase your taxable income and push you into a higher tax bracket.
One way to possibly get ahead of that is a Roth conversion, which could help some retirees reduce future RMDs and create tax-free retirement income. But you generally owe income tax on the amount converted, so timing is important. The best time to do this is usually early in your retirement, before Social Security or RMDs begin. If you’re considering a Roth conversion, talk to a tax professional who can help you determine the best timing for you.
Where you hold different investments also matters. Choosing which investments to keep in each type of account can help you pay less in taxes over time. A tax professional can help you sort this out, too.
Prepare for Healthcare Costs
Healthcare can become one of the biggest retirement expenses. Do you know how you’ll get coverage if you retire before Medicare eligibility? Do you know what you’ll pay once Medicare begins? How will you make sure you’re not overpaying for premiums?
Your income can affect Medicare premiums, so managing your taxable income can help keep them down.
According to the U.S. Department of Health and Human Services (HHS), most Americans will need some form of long-term care, and those costs can be substantial. Your options include setting aside enough funds to self-fund care, purchasing long-term care insurance, or considering a hybrid life insurance policy that includes long-term care benefits.
None of these options are one-size-fits-all. The right fit depends on your age, health, and finances.
Get Your Legacy and Estate Plan in Order
This is about making things as easy as possible for the people and loved ones you leave behind. Make sure you have the basics done: a will, a medical power of attorney, and designated beneficiaries on every account. Update these documents after any major life changes, store them securely, and make sure your family knows where to find them.
Creating a comprehensive retirement plan will help your savings last longer, and you’ll feel more confident about the financial future you’ve spent years preparing for.
by Amanda O'Brien | Accounting News, News, Newsletter, Retirement, Retirement Savings
Key Takeaways:
- A Roth conversion moves money from a traditional account into a Roth, taxed now in exchange for tax-free growth and withdrawals later.
- Converting during a temporarily lower-income year, such as between jobs, can let you convert at a lower tax rate.
- A “conversion ladder” — converting smaller amounts over several years to stay within your current bracket — typically beats converting all at once.
- Converting in your peak earning years, or when it would push you into a higher bracket, often doesn’t make sense.
- Because Medicare Part B/D premiums are based on income from two years earlier, a large conversion can quietly raise your Medicare costs.
If you have money in a traditional IRA or 401(k), you’ve probably wondered how much of those savings will eventually go to taxes. A Roth conversion can help reduce future taxes and build a source of tax-free income, but you generally need to pay taxes now to get those benefits later. Here’s a breakdown of the factors at play in determining if this could be a smart move.
What Is a Roth Conversion?
A Roth conversion moves money from a traditional retirement account into a Roth account. You pay taxes on that money now, at today’s rates. In exchange, that money grows tax-free from then on, and you never pay taxes on it again, not even when you withdraw it. Roth IRAs also don’t require the owner to take required minimum distributions (RMDs). Tax-free growth sounds like the right idea, but it isn’t always the best move.
When a Roth Conversion Could Make Sense
A Roth conversion could be the right move when your income is temporarily lower than usual. For example, if you’ve had a slow income year or you’re between jobs, this could be an ideal time to convert some traditional retirement savings at a lower tax rate.
A conversion may also make sense if you expect tax rates to be higher in the future or want to reduce future RMDs. Having money in both traditional and Roth accounts can also give you more control over taxable income during retirement.
Should You Convert Everything at Once?
Converting a traditional IRA all at once could trigger a substantial tax bill and push you into a higher tax bracket. Instead, converting smaller amounts over several years is typically a better move.
A common strategy known as a “conversion ladder” is to convert enough each year to take advantage of your current tax bracket without unnecessarily pushing income into a higher one.
Work with a tax professional to figure out how much you can convert each year without risking a jump to a higher tax bracket.
When You Might Want to Skip a Roth Conversion
If you’re currently in your peak earning years and sitting in a high tax bracket, or if the conversion could push you into a higher tax bracket than your current one, it may not make sense.
Keep in mind that you’ll need to pay the tax bill. Ideally, this should come from savings outside your retirement account. If you use retirement funds to pay the taxes owed, you’ll put a dent in your investments, and you could incur additional tax consequences.
The Medicare Trap
If you are approaching or already enrolled in Medicare, something to keep in mind is that a Roth conversion can quietly raise your premiums.
Medicare Part B and Part D premiums are based on your income from two years earlier. A large Roth conversion adds to your taxable income, which can increase your Medicare premiums. This is exactly why smaller conversions spread over a few years tend to work better for people in or near retirement.
A Roth conversion can be one of the smartest pathways to create tax-free retirement income, but it can also be an expensive mistake if you do it at the wrong time or with the wrong amount. A tax professional can help you assess your income needs, goals, and timeline if you’re considering a conversion.
by Amanda O'Brien | Accounting News, News, Newsletter, Tax
Key Takeaways:
- The OBBBA made most 2017 TCJA tax cuts permanent, avoiding a scheduled tax increase in 2026.
- New “no tax on tips” (up to $25,000) and “no tax on overtime” (up to $12,500) deductions are now in effect.
- The Child Tax Credit rose to $2,200 per child, and new “Trump Accounts” let families save for kids under 18.
- 100% bonus depreciation is now permanent, giving businesses an immediate deduction on qualifying equipment.
- The tax cuts are partly funded by Medicaid and SNAP cuts, including new work requirements.
One Year of the OBBBA: What It’s Meant for Your Wallet
The One Big Beautiful Bill Act (OBBBA) made some of the biggest tax changes in years, and one year after Trump signed it into law, many Americans are still figuring out what it means for their finances. Here’s a look at some of the law’s biggest financial effects.
The 2017 Tax Cuts Preserved
The tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) were set to expire at the end of 2025, but the OBBBA made most of them permanent, so the current tax brackets and lower individual tax rates remain in place. Without the OBBBA, taxes would have increased for many households starting this year.
The standard deduction also got a small bump. For the 2025 tax year, it was $15,750 for single filers and $31,500 for married couples filing jointly. That amount will adjust each year for inflation.
New Tax Breaks for Workers and Seniors
The OBBBA introduced “no tax on tips” and “no tax on overtime.” Eligible workers can now deduct certain tip and overtime income, up to a specific amount. The tip deduction applies to up to $25,000 in qualifying tip income. The overtime deduction is capped at $12,500 and only covers the extra pay earned from working overtime, not regular wages. Both deductions gradually phase out at higher incomes.
Seniors also received a temporary tax benefit. Taxpayers age 65 can deduct up to $6,000 from their income through 2028 ($12,000 for a married couple). This deduction also phases out at higher income levels.
Larger Child Tax Credit and New Investment Accounts for Kids
The child tax credit was previously set to decrease from $2,000 to $1,000, but the OBBBA increased it to $2,200 per child. This amount will be adjusted for inflation going forward.
Another new feature of the OBBBA is the creation of “Trump Accounts,” a new kind of savings account for kids under 18. Parents and other adults can contribute up to $5,000 to an account annually.
Trump accounts are meant to encourage long-term saving by allowing money to be invested for a child’s future. And children born between January 1, 2025 and December 31, 2028 qualify for a one-time $1,000 deposit from the federal government. Money in Trump accounts can’t be touched until the child turns 18.
Business Tax Breaks Continue
The OBBBA extended or restored several tax provisions that encourage companies to invest in equipment, technology, and research. 100% bonus depreciation is now permanent, letting businesses deduct the full cost of qualifying equipment purchases immediately instead of spreading it out over years. The idea here is to encourage business expansion, job creation, and economic growth.
Medicaid and SNAP Spending Cuts
The price of the tax cuts in the OBBBA was paid, in part, by cuts to Medicaid and SNAP. The changes include stricter eligibility and work requirements for some recipients, along with other policy changes intended to reduce federal spending over time.
Supporters argue that these reforms encourage workforce participation and improve the long-term stability of these programs, but critics warn that it could make it harder for some low-income Americans to access healthcare and food assistance.
One year in and the OBBBA is shaping household finances with lower taxes, larger deductions, and expanded tax credits. And businesses have renewed investment incentives. But some families are adjusting to changes in Medicaid and SNAP. The long-term impact of the OBBBA will become clearer as time goes on.
by Amanda O'Brien | Accounting News, News, Newsletter, Small Business, Tax
Few things create more stress for a small business owner than receiving a notice from the IRS. A tax debt can quickly become overwhelming, but the worst thing you can do is nothing.
The good news is that IRS debt doesn’t have to derail your business. The key is tackling the problem before it grows larger.
Sticking Your Head in the Sand Only Makes the Problem Worse
The IRS charges interest and penalties that compound over time. By ignoring manageable debt, you’re allowing it to balloon into something much more difficult to handle.
In some cases, the IRS may file tax liens, levy bank accounts, or withhold certain income. Even if those consequences seem far away, waiting too long limits your options and can make negotiations more difficult. If you owe back taxes, taking action sooner almost always means paying less in the long run.
Organize Your Financial Records
Before you can fix the problem, you need to understand it. Start by pulling together your financial records: tax returns, payroll records, expense receipts, profit and loss statements, bank statements, invoices, and any correspondence you’ve received from the IRS.
Having accurate records can help you understand how much you owe. And if the IRS requests documentation, you’ll be ready.
Work with a Tax Professional
Seek out a qualified tax professional who specifically understands IRS debt resolution. A Certified Public Accountant (CPA) or a Certified Tax Resolution Specialist (CTRS) can review your situation, explain your options, and communicate with the IRS on your behalf. Depending on your circumstances, they may help establish payment plans, request penalty relief, or identify programs that could reduce the overall amount you owe, like an Offer in Compromise.
Not all tax situations require professional help, but seeking guidance early can help prevent bigger problems later. And you can stay focused on running your business.
Communicate with the IRS
The IRS responds better to taxpayers who stay in contact than those who avoid communication. If you receive a notice, respond by the deadline, even if you don’t have all the information yet. A simple acknowledgment lets them know you’re responsive, and it can buy you time.
If you can’t pay your full balance, ask about a payment plan. The IRS offers installment agreements that let you pay down your debt in monthly payments. This at least keeps penalties from piling up and shows the IRS that you’re working to resolve the issue.
Create a Plan Moving Forward
Resolving back taxes is crucial, but you also need to come up with a plan to prevent future tax problems.
Review your booking systems, set aside funds for future tax obligations, and make sure estimated tax payments and payroll tax deposits are paid on time. Regular meetings with an accountant or tax advisor can also help identify issues before they become serious.
by Amanda O'Brien | Accounting News, Business Growth, News, Newsletter, Small Business
What builds customer loyalty? Sure, clever campaigns, major sales, and successful product launches can build loyalty, but more often, real loyalty is built in quieter ways. It’s built over time through small, everyday actions that prove your reliability and consistency.
When you do what you say you’re going to do, day in and day out, it builds deep trust. The work customers rarely see often shapes their experience with your company or brand. This is invisible execution. It’s your quiet superpower, and it’s why strong operations matter.
Read on as we go over the small, behind-the-scenes actions that build a loyal customer base.
Reliability Builds Trust
Reliability creates a strong competitive advantage for small businesses. When customers know they can count on you to deliver, they stop comparing alternatives every time they need a product or service your company provides.
Consistently meeting expectations creates trust. Return calls quickly, deliver orders on time, show up when scheduled, keep projects on track, and communicate delays or roadblocks before the client has to ask.
Over time, as customers learn to count on you for consistency, you quietly and steadfastly build trust.
Supply Chains: The Invisible Thread of Customer Satisfaction
Supply chain disruptions don’t just happen to giant corporations. If you own a local coffee shop and run out of espresso, your customer feels the impact immediately. This is why supply chain reliability is huge.
Unlike major corporations, small businesses don’t need a massive coordination team, but you do need insight into your operations. Track inventory patterns, keep solid relationships with suppliers, and have backup options at the ready to minimize disruptions. And choose vendors who care about reliability as much as you do.
Solve Problems Before Customers Notice Them
The best businesses don’t just react to problems. They actively anticipate them before they happen. They look ahead to find potential shortages, price spikes, or shipping delays. This is the behind-the-scenes work that customers may never see, but it’s the work that builds loyalty.
When you maintain relationships with suppliers, you know when something will be scarce and can plan for alternatives early.
When you track sales, you know which specific products sell better during certain seasons and can plan inventory in advance.
When labor shortages are creating bottlenecks, you can adjust schedules before the pressure builds.
Being proactive means most customers will never see the work behind those decisions, and that’s the goal.
Smooth Operations Create Room for Growth
When internal operations run smoothly, you create the perfect conditions for faster growth. Think about how much time and energy is wasted when you’re constantly putting out fires. Before you know it, your whole day can get derailed. But when your daily operations run like clockwork, you and your team can focus on long-term goals, new opportunities for expansion, and strengthening customer relationships. Growth becomes more manageable because the foundation is stronger.
The Little Things Add Up to Create a Business to Rely On
Building customer loyalty isn’t complicated when you focus on the quiet discipline of planning and preparation. Customers may never see your internal hiccups or the behind-the-scenes work that keeps the business moving, but they definitely feel it. When orders arrive on time, when products are always available, when teams show up as scheduled, and when customers feel heard and supported. It’s these small actions repeated consistently over time that keep customers coming back.
