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If you could change one tax law to benefit yourself in retirement, what would it be? One, and one only.
Myself, I would like to be able to contribute to an IRA or RothIRA without earned (working) income.
I don't want to go work at a part-time job just to be able to put money away into a retirement account.
Anything that counts as Taxable Income should count.
I think that the total amount of Social Security that was withheld from your income (and which you already paid income tax on) should not be counted as income or taxed. The income tax should begin when your benefit exceeds what was deducted from your wages or paid as self-employment tax over your working life-time.
I wouldn't want to change a single tax law to "benefit myself". That is one of the big problems with out society; we have become selfish and self-entitled. Any change in tax law should be for the purpose of making the whole system better and benefitting society. And there is plenty of room for such changes, although it is a fiendishly complex subject, and not the subject of this thread anyway.
Required minimum distribution from a 401(k) or IRA should be taxed at capital gains rate, not ordinary income tax rate. Most of the value of the withdrawal for us, when we have to start taking it in a few years, will be the appreciation of the asset. IOW, capital gains. But because the original contribution wasn't taxed, the whole kit and kaboodle is ordinary income for tax purposes when it comes out. (Unless I'm really confused and/or misinformed.)
I think the whole 401(k)/IRA thing has been a big bamboozle on those of us who maxed out our pre-tax savings. In retrospect, I wish we had contributed just enough to get the full company match, and invested the rest after-tax. The capital gains rate is a lot lower than our ordinary income tax rate, even in retirement. We're penalized because we made some really smart investment choices.
If you could change one tax law to benefit yourself in retirement, what would it be? One, and one only.
Myself, I would like to be able to contribute to an IRA or RothIRA without earned (working) income.
I don't want to go work at a part-time job just to be able to put money away into a retirement account.
Anything that counts as Taxable Income should count.
I can dream, right?
1 tax law?
repeal the 16th Amendment.
if that would have already happened, I could have retired 5 years ago.
Adjust the capital gain on a house sold that was purchased many years ago to reflect inflation.
For example, it's entirely possible that a house bought in 1970 for $100,000 is worth $600,00 now.
According to inflation conversion charts that would be a wash.
However, the IRS says you can only exclude $250,000(single) or $500,000 (married).
If an investment property, none of it is exempt even though the inflation factor is the same.
Treat all tax payers the same.
If you earn the income, you pay the tax.
It shouldn't matter if you have 10 children or no children.
It shouldn't matter if you have a spouse or not (no matter what gender the spouse is).
Just treat all people the same.
After 70 and still working shouldn't have to continue to pay SS taxes.
IIRC, Ted Cruz included something similar to this in his recent proposal to reform Soc Sec. Actually, I think it was starting at age 62. Allegedly this would increase job opportunities for the un/underemployed younger generations as well, because... he said so?
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I can dream, can't I?
