The Estate of The Union Season 4|Episode 2 is out now! In this episode of the ESTATE OF THE UNION, Brad Wiewel is going to discuss gifting to grandchildren – is it a blessing or a curse?
As a great general rule, people who have grandchildren are entranced by them! They typically have plenty of photographs to share and stories to tell. These kids are perfect and always will be – right?
In this edition of the Estate of the Union bought to you by Texas Trust Law, Brad Wiewel has some advice for grandparents which may seem to be contrary to the general idea that making substantial gifts to those adorable grandkids is always the right and proper thing to do. Maybe Brad is getting a little bit jaded as he ages, or maybe his advice is worth considering – you get to decide! Is gifting to grandchildren a blessing or a curse?
In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 4|Episode 2 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.
Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.
High-net-worth individuals and families often hold stocks, real estate, or other assets that have significantly increased in value over time. Selling these assets outright can trigger capital gains taxes, reducing the asset’s net value. However, strategic gifting—whether to family members or charities—can minimize tax liabilities for high net-worth families, while ensuring that wealth is transferred efficiently.
By understanding gift tax rules, charitable giving strategies and estate planning considerations, individuals can preserve more of their wealth while benefiting loved ones and the causes they care about.
Why Gifting Appreciated Assets Makes Sense
Gifting highly appreciated assets offers several financial advantages:
Reduces estate size – Helps minimize estate taxes by transferring wealth while living.
Avoids or reduces capital gains taxes – Capital gains taxes may be eliminated or deferred if an asset is gifted instead of sold.
Supports charitable causes – Donating appreciated assets directly to charities maximizes deductions, while providing financial support to nonprofits.
Leverages lower tax brackets – Gifting to beneficiaries in lower income tax brackets allows them to sell the asset with reduced capital gains exposure.
Careful planning ensures that these benefits are fully realized while complying with tax laws and avoiding unintended financial consequences.
Understanding Gift Tax Rules and Exemptions
The IRS imposes gift tax rules on high-value asset transfers. However, several exemptions allow for tax-free gifting.
Annual Gift Tax Exclusion
In 2025, individuals can gift up to $19,000 per recipient per year without triggering gift tax reporting. Married couples can combine their exclusions, allowing up to $38,000 per couple annually.
Gifting within these limits enables gradual wealth transfer without reducing the federal lifetime estate and gift tax exemption, which currently stands at $13.61 million per individual (subject to legislative changes).
Lifetime Gift and Estate Tax Exemption
Gifts exceeding the annual limit count toward an individual’s lifetime exemption, reducing the amount that can be passed estate-tax-free upon death. However, gifting assets while living can significantly reduce estate tax liabilities for individuals with estates exceeding the exemption amount.
Step-Up in Basis Consideration
Gifting appreciated assets can result in capital gains tax consequences for the recipient. Unlike assets inherited at death, which receive a step-up based on fair market value, gifted assets retain the donor’s original purchase price (basis).
For example:
If a parent purchased stock at $50,000 and it is now worth $250,000, gifting it to an heir would pass on the original cost basis of $50,000.
If the recipient sells the stock, they will owe capital gains tax on the $200,000 gain.
For individuals concerned about minimizing tax burdens for heirs, gifting certain assets while retaining others for inheritance may be the most tax-efficient strategy.
Charitable Giving Strategies for Appreciated Assets
Donating Stock Instead of Cash
One of the most tax-efficient ways to support a nonprofit is by donating appreciated securities directly. Doing so:
Avoids capital gains taxes that would apply if the stock were sold before donating.
Provides a full charitable deduction for the fair market value of the asset.
Maximizes the impact of donations, as the charity receives the full value without tax deductions.
For example, donating $100,000 in appreciated stock instead of selling it and donating cash could save $20,000 or more in capital gains taxes.
Charitable Remainder Trusts (CRTs)
A Charitable Remainder Trust (CRT) allows individuals to donate highly appreciated assets, while retaining an income stream during their lifetime. This strategy:
Defers capital gains taxes, allowing the trust to reinvest the entire asset value.
Provides a charitable tax deduction based on the present value of the donation.
Supports charities, while ensuring a lifetime income stream for the donor or beneficiaries.
CRTs are ideal for those who wish to benefit from their assets while making a long-term charitable impact.
Donor-Advised Funds (DAFs)
A Donor-Advised Fund (DAF) allows individuals to contribute appreciated assets, receive an immediate tax deduction and distribute funds to charities over time. DAFs provide:
Flexibility in choosing which charities to support over multiple years.
Tax-efficient giving by allowing donations to grow tax-free before distribution.
Simplified record-keeping for those making multiple charitable contributions.
DAFs are effective for individuals who want to maximize tax savings, while maintaining control over charitable donations.
Estate Planning Considerations When Gifting Assets
Gifting appreciated assets plays a key role in estate planning, reducing taxable estate size and ensuring smooth wealth transfer. An estate planning attorney can help:
Structure gifts to minimize tax burdens for both the donor and recipient.
Determine whether assets should be gifted outright or placed in a trust for greater protection.
Balance lifetime gifting with posthumous wealth transfer strategies.
For individuals with high-value estates, integrating gifting into a broader estate plan ensures optimal tax efficiency and legacy preservation.
Optimize Your Gifting Strategy with Estate Planning
Gifting highly appreciated assets requires careful planning to balance tax efficiency, wealth preservation and charitable giving. Whether you are donating assets, transferring wealth to family, or incorporating gifting into your estate plan, strategic gifting can minimize tax liabilities for high net-worth families. If you would like to learn more about gifting, please visit our previous posts.
The Estate of The Union Season 4|Episode 1 is out now! In this episode of the ESTATE OF THE UNION, Brad Wiewel is going to share with you how to SUPER STRETCH an IRA!
Here’s some background: Retirement accounts like IRAs, 401ks and 403bs are subject to a myriad of new rules on how fast the money needs to be distributed to a non-spouse beneficiary. While there are exceptions, for the vast majority of beneficiaries, the money must be emptied out in ten years, which means that those funds are going to be subject to taxes more quickly and now they are growing in a “taxable” environment.
Enter the Testamentary Charitable Remainder Trust (weird name, right?). As Brad describes it, this trust which can be part of a revocable living trust or a will, and it allows the ultimate beneficiaries (kids, etc.) to take the retirement account distributions over their LIFETIME (Super Stretch), not just ten years! Brad paints the BIG picture and gives enough details for it to make sense to you.
In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 4|Episode 1 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.
Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.
Many people give financial gifts to family members, friends, or charities, whether for milestone events, education, or estate planning purposes. While gifting is a generous act, certain gifts may trigger tax obligations. Understanding federal gift tax rules, annual exclusions and lifetime exemptions can help individuals structure their giving in the most tax-efficient manner.
What Is the Gift Tax?
The gift tax is a federal tax imposed on transfers of money or property made without receiving something of equal value in return. The person making the gift, not the recipient, is responsible for paying any applicable gift tax. However, most gifts fall within exemption limits, meaning few individuals owe taxes on their generosity.
How the Gift Tax Exclusion Works
As of 2025, individuals can give up to $19,000 per recipient per year without triggering gift tax reporting requirements. Married couples can combine their exclusions, allowing them to gift $38,000 per recipient tax-free.
For example, if a parent gives their child $19,000 in 2025, the gift is below the annual exclusion and does not need to be reported to the Internal Revenue Service (IRS). However, if the gift is $26,000, the excess $7,000 must be reported, though it may not necessarily result in tax owed.
Lifetime Gift Tax Exemption
In addition to the annual exclusion, individuals have a lifetime gift tax exemption, which allows them to give away a set amount over their lifetime without incurring taxes. In 2025, this exemption is $13.99 million per person (or $27.98 million for married couples).
If a gift exceeds the annual exclusion, the excess amount is deducted from the lifetime exemption. Only gifts that surpass this exemption trigger actual gift tax liability. Most people will never reach this limit, meaning they can give substantial amounts tax-free.
What Types of Gifts are Tax-Exempt?
Certain types of financial gifts are automatically exempt from gift tax rules, including:
Payments for Medical Expenses: Direct payments to medical providers for someone else’s healthcare are not considered taxable gifts.
Educational Tuition Payments: Direct tuition payments to a school or university (not including room and board) are exempt from gift tax.
Gifts to Spouses: Unlimited tax-free transfers can be made to a U.S. citizen spouse. Gifts to a non-citizen spouse have a lower annual exclusion limit ($190,000 in 2025).
Charitable Contributions: Donations to IRS-recognized charities are tax-deductible and do not count toward the gift tax exemption.
Reporting Large Gifts to the IRS
If a financial gift exceeds the annual exclusion, the giver must file IRS Form 709: U.S. Gift (and Generation-Skipping Transfer) Tax Return. Filing does not necessarily mean taxes are owed—it simply records the amount deducted from the lifetime exemption.
For example, if an individual gifts $30,000 to a child in 2025, the excess $11,000 is reported on Form 709. However, it is deducted from their $13.99 million lifetime exemption, leaving them with $13.979 million remaining. Taxes are only due if lifetime gifts surpass the exemption limit.
Tax Planning Strategies for Gifting
To maximize the benefits of financial gifts while minimizing tax exposure, consider these strategies:
Spread gifts over multiple years to take advantage of the annual exclusion each year.
Leverage direct tuition or medical payments to help loved ones without using up gift tax exclusions.
Utilize trusts for structured wealth transfers, such as irrevocable trusts for minor children or special needs beneficiaries.
Coordinate with an estate plan to gradually minimize estate tax liability by gifting assets.
The Role of an Estate Lawyer in Gifting Strategies
An estate planning attorney can help structure financial gifts to align with long-term wealth transfer goals while minimizing potential tax liabilities. Whether incorporating gifting into an estate plan or establishing trusts for heirs, professional guidance ensures compliance with IRS regulations.
Financial gifting allows individuals to share wealth, support loved ones and reduce potential estate taxes. By understanding gift tax rules and planning strategically, you can help structure tax-efficient giving that benefit both the giver and the recipient. If you would like to learn more about the gift tax, please visit our previous posts.
Grandparents often find immense joy in supporting their grandchildren, whether by funding education, contributing to major milestones, or simply providing for day-to-day needs. While these gestures can create lasting memories, an article from the AARP explains that financial missteps can lead to unintended consequences. Grandparents can balance generosity with financial security by understanding potential pitfalls and adopting thoughtful strategies. There are some common financial blunders grandparents should avoid with grandchildren.
Overextending Finances and Other Common Financial Mistakes Grandparents Make
One of the most common errors grandparents make is giving more than they can afford. This often happens out of a desire to help with significant expenses, like college tuition or housing. While the intention is noble, overcommitting financially can jeopardize retirement savings and long-term stability. Grandparents must evaluate their financial capacity before making significant commitments. Consulting with a financial advisor can clarify how much they can comfortably give without endangering their financial health.
Co-Signing Loans
Co-signing a loan for a grandchild, whether for a car, education, or personal use, can have serious implications. If the grandchild is unable to make payments, the financial burden falls on the grandparent, potentially damaging their credit score or creating unexpected debt. It’s essential to understand the risks before co-signing any financial agreement. Alternatives, such as contributing smaller amounts directly toward the loan, can provide support without the same level of risk.
Giving Unequally Among Grandchildren
Favoritism, whether intentional or perceived, can strain family relationships. For instance, funding one grandchild’s college tuition while offering no support to others can lead to resentment or conflict. To avoid these issues, grandparents should strive for fairness, considering equitable ways to help all grandchildren. Transparency about financial decisions and the reasoning behind them can also reduce misunderstandings.
Ignoring Tax Implications
Generous gifts can sometimes lead to unintended tax consequences. In 2025, the IRS allows individuals to gift up to $19,000 annually per recipient without triggering gift tax reporting requirements. Exceeding this threshold may require filing a gift tax return or result in tax liabilities. Grandparents should understand these limits and plan their giving accordingly. Contributions to 529 college savings plans or medical expenses paid directly to providers are additional tax-efficient options.
Failing to Prioritize Estate Planning
Large gifts made without considering overall estate planning goals can disrupt long-term plans or unintentionally disinherit certain heirs. Without proper documentation, disputes can arise among family members. Grandparents should incorporate financial gifts into their broader estate plans. Working with an estate planning attorney ensures that gifts align with their goals and minimize potential conflicts.
To avoid financial missteps, grandparents can adopt these thoughtful strategies:
Set clear boundaries and determine how much you can give without compromising your financial security.
Plan equitable contributions to ensure fairness among grandchildren, while considering individual needs.
Focus on education by contributing to tax-advantaged accounts, like 529 plans.
Pay for specific expenses directly to avoid triggering gift tax complications.
Work with financial and legal professionals to develop a giving strategy that aligns with long-term goals.
The Importance of Communication
Open communication with family members is key to avoiding misunderstandings or conflicts. Discuss your intentions and limitations with both your children and grandchildren, ensuring that everyone understands your approach to financial support. These conversations can strengthen family bonds and provide clarity about your financial role.
Balancing Generosity with Stability
Supporting grandchildren financially can be one of the most fulfilling aspects of grandparenting. Grandparents can avoid financial blunders with grandchildren by implementing thoughtful strategies that can provide meaningful assistance, while safeguarding their financial future. A balanced approach ensures that your generosity strengthens family ties without creating financial or relational strain. If you would like to learn more about estate planning for older couples, please visit our previous posts.
Charitable gift annuities can be a benefit to those seeking to donate to charities they care about. A Charitable Gift Annuity (CGA) donated to a qualified 501(c)(3) charity creates an immediate tax deduction for a portion of the contribution and a fixed income stream from the charity for as long as the grantor lives. With the minimum contribution usually $5,000, a CGA is accessible for many people seeking to create a legacy and lower taxes, according to a recent article, “How about a gift that pays you back?” from Los Angeles Daily News.
Who could benefit from a CGA?
A person who wants to give generously but is concerned about having enough income for the future.
Someone who needs a last-minute tax deduction and has already reached contribution limits for an IRA or 401(k) plan.
A philanthropic-minded person who wants to leave a large amount or all of their estate to charity and wishes to have the business end of their giving done all at once.
A donor who wants to avoid or defer capital gains tax on an asset they want to donate to charity.
An estate planning attorney should be involved in creating and executing the CGA to ensure that all requirements are met so that the CGA achieves the desired results and works in tandem with the rest of the estate plan. The estate planning attorney will set up the CGA. You then donate the asset to the charity. The gift is set aside and invested by the charity. You receive fixed monthly or quarterly payments as long as you are living. After your death, the charity receives the funds remaining in the account.
The income tax deduction is the contribution minus the present value of the payments to the donor. The estate planning attorney can make the calculations. Current annuity rates range from 4.6 to 10.1% for 50 and older, based mainly on age. Let’s say someone made a $100,000 contribution. They would receive $4,600 to $10,000 a year from the charity.
The amount received never fluctuates and is fixed so it won’t adjust for inflation. However, it is secured by the charitable organization’s assets and continues at the stated rate, no matter how the annuity investments perform.
Another example: a couple in their 70s funds a Charitable Gift Annuity with $50,000 of appreciated stock originally purchased for $20,000. They will receive an income tax charitable deduction of $17,584 and a payment of 6% or $3,000 a year for the rest of their lives.
Charitable gift annuities can be a benefit to those seeking to donate to nonprofits. The charity needs to be a qualified 501(c)(3), and it’s best to pick a well-established charity with a Charitable Gift Annuity program in place. Your estate planning attorney will be able to review the program to be sure that it aligns with your overall estate plan. If you would like to learn more about charitable planning, please visit our previous posts.
The Estate of The Union Season 3|Episode 7 is out now! The current immigration debates are nothing new, and are politically charged by both parties. Casa Marianella is an answer – not a complete one, but an amazing one. One that works!
We are fortunate to have Jennifer Long, the Founder of Casa Marianella as a guest. Casa Marianella welcomes displaced immigrants and promotes self-sufficiency by providing shelter and support services. Casa, as it is called, is the most successful and delightful haven for those coming here for a new life.
It’s not a shelter in the classic sense, it seems more like a loving way-station to move people from other places on to success. Plus, Jennifer has a manner of explaining all this is a tone and form that make it easy to “get”. To learn more about the valuable work of Casa Marianella, please visit their website: www.casamarianella.org
If you are interested in volunteering with Casa Marianella, please email volunteer@casamarianella.org.
In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 3|Episode 7 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.
Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.
Since 2017, there have been several major tax changes, including the Tax Cuts and Jobs Act, the pandemic-era Cares Act and the climate and healthcare package known as the Inflation Reduction Act. Those are just three—there’s been more. Unless you’re a tax expert, chances are you won’t know about the possibilities. However, these four could be very helpful for seniors, especially those living on fixed incomes.
The IRS does offer a community-based program, Tax Counseling for the Elderly. This community-based program includes free tax return preparation for seniors aged 60 and over in low to moderate-income brackets. However, not everyone knows about this program or feels comfortable with an IRS-run tax program.
Here are four overlooked tax deductions for seniors:
Extra standard deduction. Millions of Americans take the standard deduction—a flat dollar amount determined by the IRS, which reduces taxable income—instead of itemizing deductions like mortgage interest and charitable deductions on the 1040 tax form.
In the 2023 tax year, seniors who are 65 or over or blind and meet certain qualifications are eligible for an extra standard deduction in addition to the regular deduction.
The extra standard deduction for seniors for 2023 is $1,850 for single filers or those who file as head of household and $3,000 for married couples, if each spouse is 65 or over filing jointly. This boosts the total standard deduction for single filers and married filing jointly to $15,700 and $30,700, respectively.
IRA contributions by a spouse. Did you know you can contribute earned income to a nonworking or low-earning spouse’s IRA if you file a joint tax return as a married couple? These are known as spousal IRAs and are treated just like traditional IRAs, reducing pretax income. They are not joint accounts—the individual spouse owns each IRA, and you can’t do this with a Roth IRA. There are specific guidelines, such as the working spouse must earn at least as much money as they contributed to both of the couple’s IRAs.
Qualified charitable distributions. Seniors who make charitable donations by taking money from their bank account or traditional IRA and then writing a check from their bank account is a common tax mistake. It is better to use a qualified charitable deduction, or QCD, which lets seniors age 70 ½ and older transfer up to $100,000 directly from a traditional IRA to a charity tax-free. Married couples filing jointly can donate $200,000 annually, and neither can contribute more than $100,000.
The contributions must be made to a qualified 501(c)(3) charity. The donation can’t be from Donor-Advised Funds. This is a great option when you need to take the annual withdrawal, known as a Required Minimum Distribution or RMD, and don’t need the money.
Medicare premium deduction. A self-employed retiree can deduct Medicare premiums even if they don’t itemize. This includes Medicare Part B and D, plus the cost of supplemental Medigap policies or a Medicare Advantage plan. The IRS considers self-employed people who own a business as a sole proprietor (Schedule C), partner (Schedule E), limited liability company member, or S corporation shareholder with at least 2% of the company stock.
Remember, you must have business income to qualify, since you can deduct premiums by only as much as you earn from your business. You also can’t claim the deduction if your health insurance is covered by a retiree medical plan hosted by a former employer or your spouse’s employer’s medical plan.
Seniors should consult with an estate planning attorney make sure they are not missing out on possible tax deductions. If you would like to learn more about tax planning, please visit our previous posts.
Qualified charitable distributions use the federal tax code to benefit older taxpayers and must take Required Minimum Distributions (RMDs). Recent changes in federal law under the SECURE Act 2.0 present even more opportunities to use QCDs, according to a recent article, “Planning Ahead: Expanding on year-end tax strategies for Qualified Charitable Distributions,” from The Mercury. How does it work?
Required Minimum Distributions for seniors can become a problem since taxpayers above a given age must withdraw specific amounts based on their age from traditional retirement accounts and pay taxes on the withdrawals, regardless of whether they need the money. The reason is obvious: if people weren’t required to take funds out of their accounts, the government would never have the opportunity to generate tax revenue. The QCD lessens the blow of the additional year-end taxes by providing some relief through donations to qualified charities.
Used correctly, the QCD serves two purposes: saving on taxes and benefiting a favorite charity. Charities include any 501(c)(3) entities under the federal tax code. Before using a QCD, ensure the charity you choose is a qualified 501(c)(3). Otherwise, you’ll lose any tax benefits.
Your estate planning attorney can help you understand the process of making a QCD. You’ll need to coordinate with the custodian of the IRA. While some may provide step-by-step information, others require you to coordinate with your estate planning attorney and financial advisor. A reminder—the point of the QCD is that the distribution does not appear in your adjusted gross income and goes directly to the charity.
Usually, taking RMDs adds funds to your taxable income, which can, unfortunately, push you into a higher income tax bracket. It could also limit or eliminate some tax deductions, such as personal exemptions and itemized deductions. There may be increases in taxes on Social Security benefits as well. Whether you want or need to take the RMD, you must take it and include it as taxable income.
Qualified charitable distributions benefit older taxpayers by allowing individuals required to take RMDs to donate up to $100,000 to one or more qualified charities directly from a taxable IRA, without the funds being counted as income.
The RMD age has increased to 73, but the $100,000 will be indexed for inflation. Under SECURE Act 2.0, individuals will be allowed to make a one-time election of up to $50,000 inflation-indexed for QCDs to certain entities, including Charitable Remainder Annuity Trusts, Charitable Remainder Unitrusts and Charitable Gift Annuities.
QCDs cannot be made to donor-advised funds, private foundations and supporting organizations, even though these are often categorized as charities.
It must be noted that the rules concerning QCD are detailed and strict—you’ll want the help of an experienced estate planning attorney.
The QCD must be made by December 31 of the tax year in question. If you would like to learn more about charitable planning, please visit our previous posts.
Social Security beneficiaries will receive a 3.2% increase in benefits in 2024 based on the annual COLA (Cost of Living Adjustment). According to the Social Security Administration, this will result in an estimated increase of more than $50 per month, bringing the average monthly retirement benefit for workers from $1,848 in 2023 to $1,907 in 2024.
How much beneficiaries will actually receive won’t be known until December, when annual benefit statements are sent out. One factor possibly offsetting those benefit increases is the size of Medicare Part B premiums, which are typically deducted directly from Social Security monthly benefits.
Medicare Part B covers physician services, outpatient hospital services, some home health care services, durable medical equipment and other services not covered by Medicare Part A.
Medicare Part B premiums for 2024 have not yet been announced. However, the Medicare trustees have projected the standard monthly premium possibly being $174.80 in 2024, up from $164.90 in 2023.
Some beneficiaries may pay more, based on income, in what’s known as IRMAA or Income Related Monthly Adjustment Amounts. In 2023, it is the standard Part B premium for those who file individually and have $97,000 or less (or $194,000 or less for couples) in modified adjusted gross income on their federal tax return in 2021.
Monthly premiums can go up to as much as $560.50 per month for individuals with incomes of $500,000 and up, for couples with $750,000 and up.
Beneficiaries receive the same Medicare services regardless of the monthly Part B premium rate.
In 2024, the monthly Part B premiums will be based on 2022 federal tax returns. Beneficiaries need to pay attention to how their incomes may change when implementing year-end tax strategies.
For instance, if you do a Roth conversion, taking pre-tax funds from a traditional IRA or eligible qualified retirement plan like a 401(k) and moving them to a post-tax retirement account, you’ll trigger income taxes, which may trigger higher Medicare Part B premiums later.
Tax planning may impact your Medicare costs. People who do end-of-year tax loss harvesting, selling off assets at a loss to offset capital gains owed on other profitable investments, may reduce adjusted gross income and future Medicare premiums.
If you’re taking distributions from IRAs and want to make charitable donations, you might want to make those donations directly from your retirement account, known as a qualified charitable distribution. These funds don’t appear on your tax return and won’t increase income taxes or future Medicare premiums. If you would like to read more about Medicare and tax planning, please visit our previous posts.
Information in our blogs is very general in nature and should not be acted upon without first consulting with an attorney. Please feel free to contact Texas Trust Law to schedule a complimentary consultation.
