Choosing between a solo 401(k) plan and a Simplified Employee Plan, or SEP IRA,  depends upon the income and goals of the self-employed individual, along with how much flexibility is desired when making contributions to the retirement plan.

More small business owners are expected to qualify for the qualified business income (QBI) tax deduction if they itemize their income taxes with the OBBBA changes. This includes Airbnb owners. The challenge will be either for the Airbnb owner to qualify as a ‘trade-or-business’ but then he/she must expect to pay Social Security and Medicare taxes as a trade-off to claiming the QBI deduction, or the owner must elect to fall within the IRS’s safe harbor, which entails detailed record-keeping, logs, and documenting at least 250 hours a year devoted to the Airbnb activity.

Many courts seem to be reluctant to enforce a in terrorem, or no-contest, provision in a Trust or Will. While no-contest provisions are generally intended to prevent challenges to the validity of a trust instrument, all too often the no-contest provision is written very broadly with sweeping language that seeks to cover all post-mortem actions in the probate court.

Trump Accounts are a new opportunity to save for children. Making a Trump Account a ‘sort of’ traditional IRA, with some (but not all) IRA rules applicable will probably cause a lot of confusion when it comes to the tax consequences of contributing to a Trump Account and taking distributions from a Trump Account. The rhetorical question always will linger- is the hassle worth it? All I know is that I have typed the word Trump at least 60 times in this missive, so at least I’ve made at least one person we know very happy.

Special distribution rules apply when a spouse dies naming his/her surviving spouse as the IRA’s designated beneficiary. A surviving spouse has options, especially so after the SECURE 2.0 Act. Note a rollover election is irrevocable. These new rules may not make much difference if the surviving spouse is close to his/her required beginning date, but for younger surviving spouses, these changes can make a big difference in when and how much required minimum distributions will have to be taken.

There are five documents that a child should sign before he or she goes off to college. Having a child sign these legal ‘tools’ will relieve some of that parental anxiety and probably also give the child (although he or she won’t admit it) some level of comfort that, if needed, Mom or Dad can get involved to help solve a problem.

The OBBBA make saving for retirement easier with more after-tax income available for those savings, thanks to new income tax deductions. However, converting a traditional IRA to a Roth IRA might be more challenging decision to make when the phase-out rules for these new deductions are considered.

Section 70114(a)(b) provides that starting in 2026 the definition of ‘losses from wagering transactions will include any allowable deduction tied to a wagering activity but limits deductions to 90% of the loss amount, capped by gambling winnings. Congress estimates that with this change in allowable deductions from gambling, $1.1 billion will be generated over the next 8 years.

Planning strategies for charitable deductions to optimize a donor’s tax benefits going forward will turn on if the individual itemizes his/her tax deductions, or does not itemize his/her tax deductions, keeping in mind that about 90% of individuals do not itemize their income tax deductions.

While cutting taxes for seniors is a good thing, it is not the same thing as eliminating taxes on Social Security, as claimed in the Social Security Administration’s recent letter to millions of recipients. Sadly, the SSA appears to have conflated two issues [a tax deduction and impact on Social Security] for political purposes (surprise, surprise) which in turn creates unrealistic expectations for many seniors who live on fixed incomes and rely on the government benefits for their existence.