Personal Finance and Tax Tips

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Retirement Income Tax Planning

by Kristin P. Sinclair – A Accu Tax – February 19, 2020

Recently Carol has had to make several expensive trips to the car repair shop, and she has decided now is the time to trade up.  Carol researched 2020 models earlier this month and found a new small truck that fits her lifestyle.  Carol feels this truck will provide her reliable transportation and has a warranty that will provide her peace of mind.

Carol has not had a car payment for five years.  She has been saving for her down payment, and would like to pay off her new truck in three years or less.  Carol does not have a home mortgage payment, and has two credit cards that she pays off every month.  She feels confident that she will qualify for a low interest rate truck loan.  Obviously, Carol has been considering many factors in this truck purchase decision.  

Carol enjoys her part time job, the people she works with and meets at work.  She also likes the extra spending money.   She doesn’t want the new truck payment to crimp her lifestyle.  Carol has 10% federal and 7% state taxes withheld from her monthly pension.  Plus 10% federal taxes withheld from her Social Security income, and 5% of her part-time job income withheld for state taxes.

Carol plans to discuss with her tax preparer Kristin Sinclair her 2019 tax preparation, and the tax impact of withdrawing extra funds from her Traditional IRA to help with her truck down payment.

Carols’ home state does not tax her on her Social Security income, even when the federal government taxes her based upon her provisional income. Carol’s home state provides an additional tax break since she is over 65 years of age.  She also qualifies for an additional tax break on her long-term capital gains from her investment capital gain income.

Carol has some friends advising her to pay her new truck outright and skip the loan payment.  Before making a final decision to take an additional $15,000 out of her Traditional IRA Carol waits to discuss this with Kristin Sinclair her tax preparer.  

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Carol tells Kristin that with an additional $15,000 Carol can keep her payment low and pay off the truck loan in less than three years.  Unfortunately Kristin determines that an additional $15,000 IRA withdrawal most likely would increase Carol’s taxable income.  So much so that significantly more of Carol’s income would now be in a higher tax bracket.  Kristin also determines that there would be more taxes on Carol’s capital gains, and more of her Social Security income would have be federally taxable.  Plus that additional Traditional IRA distribution would also increase Carol’s state taxable income by enough to move her into a higher state income tax bracket.

Kristin advises Carol to take $5,000 from her Traditional IRA this year to add to her down payment.  Then in early January 2021 Carol should  take an additional $5,000 from her Traditional IRA and make a principal only payment on her truck loan.  Finally, in January 2022 to take an additional $5,000 from her Traditional IRA and make another principal only payment.  This should only move a little more of Carol’s Social Security into the taxable column.  Carol will pay a little more in taxes; however, she should still receive tax refunds as she has in the past.  Plus she will be able to pay off her new truck in less than three years !  Smart tax and financial planning for retirement income living !  


Kristin P Sinclair   A Accu Tax   (803)329-0615

February 19, 2020

Written in Charlotte NC and Rock Hill SC




Social Security Retirement Estimator

by Kristin P. Sinclair – A Accu Tax – January 13, 2020

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The Social Security Retirement Estimator provides you estimates based upon your Social Security earnings record. Please note that these are estimates and not a guarantee of benefits to be paid. The Social Security Administration will provide you with your actual benefit amount when you apply for benefits. That amount may differ from the estimates for several reasons:

  • Your future earnings may increase or decrease from today’s estimate.
  • Benefits most likely will be adjusted for cost-of-living increases.
  • Today’s estimated benefits are based on current law, and do not account for any future changes in the law. There are concerns about benefits to be paid after 2034.
  • Military service, railroad employment, or pensions earned through work on which you did not pay Social Security tax may affect your future benefits.

When Can Use the Retirement Estimator

When you have enough Social Security credits to qualify for benefits, and when you are not currently receiving benefits on your own Social Security record. You must also not be waiting for a decision about your Social Security benefits application for benefits or Medicare benefits. Also you should not use the Social Security Estimator if you are age 62 or older and receiving benefits on another Social Security record; or if you are eligible for a pension based on employment not covered by Social Security.

Please note that when you are receiving only Medicare benefits, then you can still get an estimate. For more information please read: Retirement Information For Medicare Beneficiaries at

The Social Security Retirement Estimator Link is:


Updated in Rock Hill SC and Charlotte NC
by Kristin P. Sinclair   A Accu Tax   January 13, 2020


Questions for Home Health Care Provider Interviews

by Donn J. Sinclair, MBA – January 10, 2020

When recovering from an injury or illness, your Medicare coverage and your Medigap or Medicare Supplement may pay some of the Home Health Care costs that you incur. When selecting a home care agency for you or a loved one, there are important questions to ask when interviewing home health care agencies.

  • Private duty home care – what year did the agency first offer that service ?
  • State licenses – are the agency staff and home health care agency properly licensed in your state ? More specifically, properly licensed to provide care level your physician ordered ?
  • Which home health care agency staff member coordinates with the patient’s physician to implement the physician developed plan of care ? The plan is evaluated and updated by the agency on what schedule ?
  • What daily notes are maintained to monitor the progress of the patient ?
  • Who and how is quality of care supervised and updated ? How frequent are unscheduled agency supervisory visits on the agency staff?
  • What are the home health care agency ongoing training mandates for their caregivers ? Who supervises the training ?
  • How and by whom are after normal business hour emergencies handled ?
  • Does the home health care agency have on staff nurses, social workers, physical therapists, and other qualified professionals available to provide needed in home care ? If not, with which providers does the home health care agency have an established working relationship ?
  • How do you obtain a written copy of the home health care agency’s privacy policy, ethics code, and mission statement ?
  • What screening techniques are used to screen caregivers ? Do these include reference checks, driving records, credit checks, and criminal background investigations ?
  • Are the home health care agency caregivers W-2 employees or W-9 subcontractors ? Are there any home health care agency incidents of failure to file payroll tax reports, or incidents where the agency failed to pay taxes on a timely basis ?

When it comes to selecting a home health care agency, you should follow the Boy Scouts motto “Be Prepared”. Make certain that you and your loved ones get the care they require and deserve. Also make certain that Medicare and your Medicare Supplement pay as they should for the care received.


Donn J. Sinclair, Winthrop MBA

in Charlotte NC and Rock Hill SC

January 10, 2020   (803)329-0609


DJS: More information is available at

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About Taxable Income

by Kristin P. Sinclair  – A Accu Tax – January 14, 2020 – Rock Hill, SC – Charleston, SC

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term life insurance

The IRS describes taxable compensation in general terms as what you earn from working.

This includes, wages, salaries, tips, professional fees, bonuses and other amounts you receive for personal services. We are familiar with these traditional concepts of taxable compensation.

Let’s expand this conversation further to include the concept of the Barter economy of being paid for services rendered. You have a business venture and are self directed, possibly self employed. You have the ability to determine that instead of being paid in a more traditional monetary value for the work you complete you are willing to accept Widgets valued equal to what can be utilized to further your future work.

You have determined that the Widgets value is equal to the work completed if paid in more traditional monetary value. You have been compensated in general terms for work completed. This value is to be included in your taxable compensation, and you in turn have a tax liability for the compensation and factor in your cost of doing business just like you would if you had been paid in a more conventional monetary fashion.

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Let’s expand further the conversation to include the concept of Treasure Trove. You find Treasure. You are able to prize this treasure for its value to you and the conventional value of this treasure. Whether you convert this treasure into a monetary value, or you hold this treasure in a vault, you have a taxable value added to your taxable income. This however is not necessarily an example of self employed income but taxable all the same. Once you have acknowledged and paid the tax liability you at that point have a cost basis on this treasure you have found.

Let’s expand further the conversation to include the concept of scholarship income. Your student has excelled and has been awarded scholarships that exceed the cost associated with the cost of the education during the annual period. Your student does have taxable income realized as a result. It could be tempting for your student to use all of that additional money to pay for lifestyle choices, but since a tax liability exists it would be prudent to account for this obligation. is a fabulous resource for more information. And / or consult your tax advisor.


January 14, 2020 – Updated in Rock Hill, SC and Charleston, SC by Kristin P Sinclair A Accu Tax 803-329-0615



Let’s Look at Some Tax Planning

by Kristin P. Sinclair, A Accu Tax on January 13, 2020

Term Life Insurance

Let’s Look at Some tax planning.

For Mustang Sallie, 2018 is the year Mustang Sallie needs to purchase a new car. She researches 2019 models in Sept and finds a perfect new model that pleases her, and that provides the reliable transportation she needs in a vehicle at a premium that is realistic for her to purchase. With a warranty She feels will be great for peace of mind.

2018 is also a year that the tax rates changed as well. Let’s take a look at Mustang Sallie’s options taken and options considered. She expects her tax rate to change federally and believes that she is withholding ample amounts. Still anticipates receiving a refund both federally and from her state return.

Mustang Sallie has been saving for a new car ever since She paid off her current vehicle. As of late she has had to make many more trips to the repair shop and is going to make a change soon.

Mustang has $15.000 saved to put down on her new vehicle to lower the amount She is borrowing at a very low interest rate. Mustang no longer has a house mortgage payment, and She is aware that having a current credit record is to her advantage. She plans to pay the loan off in a couple of years. Ms. Sallie is going to be thoughtful in her approach.

Mustang enjoys Her part time job. Enjoys people She meets at work, and has found some wonderful walking friends. Her part time job has made it so much more enjoyable to feel free to invest in herself. With walking shoes, athletic socks, insoles and exercise apparel. Her part time job has been wonderful.

Mustang has two bank accounts. One account is the one she has her pay check, her Pension check as well as her Social Security Check direct deposited.

Mustang has a bank account that She has her captial gains funds are deposited into as well as her federal and state refunds.   She uses this bank account to pay medical bills, RX, property and vehicle taxes as well as her car payment.

Mustang takes $20,000 annually from her pension plan, and has in the past had 15%withheld for federal taxes. She also has 5% withheld for her state taxes. She expects a refund.   Social Security income she will receive $18,000 in benefits. Mustang has also chosen to have 7% federal taxes withheld from her Social Security income equal to $1260.00 with held over the 12-month annual period, plus she pays her Medicare Part B and Medicare Part D premiums from her Social Security income. These insurance deductions total $2016.00 during 2018. The monthly amount that Mustang sees deposited into her account from Social Security is $1,227.

For Mustang’s Medicare Supplement she has a High Deductible Plan F HDF plan which has low premiums. Some out of pocket exposure; she can seek medical care from any provider who accepts Medicare beneficiaries anywhere, in the United States. She remains active in life, enjoys laughter and life. Exercises regularly. She feels very confident about her plan choice.

While Mustang has paid her mortgage in full, each year she still needs to pay the property taxes on her home. She is fortunate to live in a state where she enjoys a Homestead exemption, which lowers her property taxes due. Since, she is purchasing a new car and her car taxes are going to go up as a result.   This tax increase may be substantial so Mustang knows she needs to plan ahead.

In the event Mustang were in need of moving funds from one checking account to the other she does so accordingly. Keeping those funds in separate account works well for Mustang, and her planning for her annual obligations.

So when Mustang Sallie’s tax documents arrive She feels confident that She has with held enough in taxes and wants to not only get her tax return completed with her tax preparer, Kristin with A Accu Tax, but also wants to look at how taking funds out of a Traditional IRA might impact her next year.

SC is Mustang’s home state. SC does not tax her on her Social Security income even when the federal government taxes her based upon her provisional income. Her state gives her an additional tax break since she is over 65 years of age. And her state also allows an additional tax break on 44% of her long-term capital gains from her investments of capital gain income.

Mustang has some friends advising her to pay her car off in full and get the payment done and over. But before making a decision to take more money out of retirement funds from a traditional IRA Mustang wants to do some research.

She asked Kristin, her tax advisor to look at some numbers for her. If She takes out an additional $15,000 in taxable income in the year how could that impact her. Had the need arisen to take out an additional $15,000 in taxable income from her Traditional IRA, then her taxable income would have increased by over $22,000.00. Putting some of her income into the 22% tax bracket instead of a 12% tax bracket.   The answer is more taxes on Mustang’s capital gains would applicable as well. More of Her Social Security income would have become federally taxable, and that additional IRA distribution in turn would have increased Mustangís state taxable income by enough to move Mustang into a higher tax bracket for the state as well.

So for Mustang, continuing to work at a jobs she enjoys, spending time with people she likes to be around, and getting a lot of joy and laughter into her days, this has been a good decision. She enjoys walking with her new friends when not at work. The occasional new pair of shoes and new socks and insoles is a great investment in herself.

Taking out only what she really needs to, from her pension, and saving her IRA for when she absolutely has to start taking distributions has been very workable for her lifestyle. Drawing from capital gains income when needed, has also been a wise choice to pay for things needed or wanted. Including in Her case a new car.

Even if the tax rates change again in 7 years. She has a goal of being ready and prepared when it comes time to make a major purchase decision like her transportation, to visit important people in her life. Working part time, traveling occasionally, exercising daily. This is a nice balance for a full life.


Kristin P Sinclair

A Accu Tax

January 13, 2020

Updated in Charleston, SC

Updates in Rock Hill


Designating Term Life Insurance Beneficiaries ?

by Donn J. Sinclair  – Charleston SC – January 15, 2020

You select beneficiaries to receive the insurance proceeds of your term life insurance policy should you die during the term period. Normally you designate beneficiaries on your insurance application, and you also normally retain the right to update that designation as you desire. Designating and keeping current your term life insurance beneficiary designations provides you the final say in whom receives your insurance proceeds. Please note that your insurance carrier and state may have limitations on your beneficiary designations with special considerations for spouses and minors.

Choosing your term life insurance beneficiaries is a very personal decision that provides for and protects your loved ones in the event of your death. Will your family need the proceeds to cover the monthly mortgage payments; and other ongoing bills that must still be made even without your ongoing income ? If you and your spouse will or are collecting Social Security, then might that be lost future income the surviving spouse might need ? Might there be extra final expenses and unpaid medical bills ? These are just several personal questions to keep in mind when choosing your term life insurance beneficiaries.

You may also designate beneficiaries as part of a financial transaction; such as, covering risks for surviving business partners in the event of a partners’ death. Also covering a business loan in the event of your death.

Regardless of whether for personal or business reasons you designate beneficiaries; you may designate one, two, or more people as those beneficiaries. You may also establish and designate a trust as your beneficiary. The named trustees will administer the proceeds as instructed by the trust. Plus you may name charities, and or your estate as beneficiaries of your term life insurance policy.

Next you should consider whom should be your primary, secondary, or successive beneficiaries. Primary beneficiaries are the first in line to receive your term life insurance beneficial proceeds. Should one more of your primary beneficiaries predecease you, then secondary or contingent beneficiaries would be next in line to receive the insurance proceeds. Should your designated primary and secondary beneficiaries predecease you, then your successive or tertiary beneficiaries may be in line to receive your term life insurance proceeds.

Several final items to keep in mind that there may be state insurance and or insurance carrier restrictions on your beneficiary designations. Review and update if necessary your term life insurance beneficiary designations. You may be required to have your spouse sign a waiver if your spouse is not named as a or the primary beneficiary. Also you might want to name a final beneficiary for you insurance proceeds. While one cannot foresee all future outcomes, some thoughtful planning will help insure that your term life insurance proceeds are received in the amount and by those you intended.


Donn J. Sinclair, MBA (803)329-0609
Charlotte NC, Rock Hill SC, and Charleston SC
January 15, 2020
@Sinclair Financial Solutions is independently owned and operated. Donn J. Sinclair, MBA is SC insurance licensed in CT, GA, IL, NC, SC, and VA (NIPR NPN#1722815). Investment Advisory Services offered through Prosperity Wealth Management, Inc., 2333 San Ramon Valley Boulevard, Suite #200 – San Ramon, CA 94583. Securities offered through Fortune Financial Services, Inc., 3582 Brodhead Road, Suite #202 – Monaca, PA 15061; branch office of record located at 948 Myrtle Drive Rock Hill, SC 29730, Member FINRA/SIPC. SC Real Estate License #76530, and


Charitable Deductions Things to Consider

by Kristin P. Sinclair – A Accu Tax – January 14, 2020 – Rock Hill, SC  Charleston SC

We have heard in the news that the Standard Deduction is increasing and fewer people will be itemizing on the their tax returns over the next 7 years. The higher deduction is indeed expected to be taken by many.   However for people who have a Mortgage on their home paying interest, they might want to look at itemizing and decide if it is to their advantage. Have deductible gifts to charity add this to the mix. And then also, taxes paid for home, vehicles, and state taxes on their earned income. Estimated state taxes on investments and retirement income.   Collectively for all state taxes the $10,000.00 is the new norm at least for the next 7 years. Any taxes above that will not be deductible federally on the itemized portion of a tax return. Medical bills that exceed thresholds to also make a difference on the income tax return. Let us hope many can avoid high medical bills. If you pay premiums for your health insurance with post tax dollars however, that threshold could be more readily reached. Those things can potential add up you will not know for certain with out looking at the numbers.

But back to Charitable giving. Qualified charities need to be the ones you make your donations to if you want a tax deduction.   Gifts to individuals, political organizations or candidates do not fall into that category as a general rule. The IRS actually has guidance on charitable giving. Your tax preparer is going to able to offer you guidance as well. has an abundance of reference material available to look up at your leisure. Many charitable organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with section 170. Most eligible organizations are listed in Tax Exempt Organization Search.

A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution in excess of $75. A quid pro quo contribution is a payment made to a charity by a donor partly as a contribution and partly for goods or services provided to the donor by the charity. For example, if a donor gives a charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. In this example, the charitable contribution portion of the payment is $60. Even though the part of the payment available for deduction does not exceed $75, a disclosure statement must be filed because the donor’s payment (quid pro quo contribution) exceeds $75.

The required written disclosure statement must:

Under a new recordkeeping rule effective for all cash, check, electronic funds transfers, credit card charges, or other monetary contributions of any amount made in taxable years beginning after August 17, 2006, the donor must obtain and keep a bank record or a written communication from the donee as a record of the contribution. Written records prepared by the donor (such as check registers or personal notations) are no longer sufficient to support charitable contributions. Bank records for this recordkeeping requirement include bank or credit union statements, canceled checks, or credit card statements. They must show the date paid or posted, the name of the charity, and the amount of the payment. Taxpayers who claim charitable contributions made by payroll deduction can satisfy the recordkeeping requirement if the donor has (1) a pay stub, W-2, or other document furnished by the employer that states the amount withheld for payment to charity, and (2) a pledge card other document prepared by or at the direction of the charity that shows the name of a donee. An organization described in section 170(c), or a Principal Combined Fund Organization for purposes of the Combined Federal Campaign, will be treated as a donee organization for purposes of the new recordkeeping provision.

When you donate to your choice of a charity that does the work that you value, you need have written documentation that you have given to the charity. This charity should provide you their assigned EIN and name and address on the documentation they send you to substantiate your giving record. They have a reference number you need to have that detail on their document provided. Along with your deductible donations, they provide the document to you and keep the document for when it is time to reference all of your charitable giving.

Many churches provide the members of the church community an envelope for the members of the congregation. They request that the members of the church community to please use the envelope to help the church, help the members; to accurately record tithes and offerings. Have that accurate written record. Each member or member family has a number assigned to their set of envelopes.. Do yourself and your community a favor, use those envelopes. Help the church bookkeeper to help the member track their giving. You the church member can also request to have the bookkeeper track your store receipts for food items you purchase to provide for the work of the church community. Request to have this additional detail to be included in your written recorded giving record. Helping you at the years end to have required documentation. Does your church have a social gathering and ask that members supply the coffee and the juice and the fruits etc. When you make the purchase, provide the church secretary a copy of that receipt with a note what the food purchase was for, and your member name and number, and ask that this record be added as well to be included in year end statement. Make it simple for yourself at tax time. Angel Tree at Christmas , Easter Lilly for the Easter Holiday, etc, etc, receipt, record, relax later.

When you give to national charities, to local charities, you will notice that they also provide paperwork that helps you substantiate your giving record during the annual period. When you give to your utility that has a charity arm function to help those in need of what that utility provides, they also help you track that in the statements that they send to you. They provide you a record in writing of your giving during the annual period.

If a charity asks you to give every month writing you again with a request, just because you gave last month; you can take charge, you decide how often you will send in a gift. Maybe two times a year works best for you, maybe every month. What every the schedule you need to feel that you are in control of your giving. You are the giver, you have control of what you want to give.

Payroll deduction for charity, your pay stub should reflect that giving you are making. And should reflect if the gift is post tax or otherwise. Only post tax gifts are deductible. That makes sense, no double dipping allowed.

When you watch your favorite Public Television station, during a fund raising month, you will tend to see a lot of programming that offers you the opportunity to buy a copy of the program and additional material as well. When you choose to make that purchase to help your PBS programming mission, you are getting something in return for your gift of giving. The gift to the charity is the amount less the amount of the value of the item you have purchased.   When you simply give to the charity without getting a thank you gift, you out right gift is deductible, they will send you a receipt to reflect your transaction on behalf of the charity.

When your near and dear to your heart local charity has a wonderful fund raising opportunity to join other like minded people in your area for a evening including a meal and entertainment. Your ticket price to be part of this opportunity to celebrate with others, includes the amount for your gift, your meal, your entertainment, the cost of space rented to hold the event. So they will provide usually in small print some where on the ticket written record what the charitable value of your gift is for the evening. This amount is less than what you paid for this event itself. This too makes sense, that meal was okay, maybe even good. The joy and laughter you enjoyed priceless, spending time with people who have a passion for the same charitable cause you put your time talent and treasure into. We all like to be able to spend time with folks who are dedicated to a cause near and dear to our heart and our wallet.

You have decided that you have a lot of stuff in the closet, the garage, the attic etc. That you no longer need to store, in your homes precious space. But realize others could benefit from these things you have been storing in safe keeping. These items are in better than good condition. They have a value to others and have a useful opportunity for someone else. You need to write down what these items are Their purchase price, their charitable value and the date of the donation. Hey, go ahead take a picture of the offering as well if you like. When you are asked, do you want a receipt, YES you do. Attach the receipt to your piece of paper. Put your name on the receipt with detail or see attached document. Put this in your tax file. What you need to document as to support your values for these non cash contributions, has just saved you time and frustration later, you plan ahead.

Consider what you paid for these items, and what these item have as a value to others. When your charity sells that item that is the value of the item to the charity. Ask your tax preparer for a guide to offer you assistance to assign values. These guides are updated regularly. They provide a range price for item type. You visit a charity that sells donated items what do they sell items similar to your gift for? It likely is going to with in the range of the published document your tax preparer provided you with. You need to use value reflective of what your charity can sell the item. You do this several times during an annual period you will find that those numbers really add up quickly.

When it comes time to actually do your tax return you will be proud of yourself. Your tax preparer will be proud of you as well.

Since the standard deduction has changed some people will find that they will instead take the standard deduction. Some people will find that they will be better off to still itemize. But without a doubt, when you itemize you need to have a written record to support your position. Your charity needs to be a qualified charity, for federal gift giving purposes. It is information gathering that you need to do if you feel that itemizing tax deductions is important to your situation.

Kristin P Sinclair – A Accu Tax – January 14, 2020

Rock Hill, SC Charleston, SC

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What is a Roth IRA?

What is a Roth IRA?

by Donn J. Sinclair, MBA   April 17, 2020

Contributions to a Roth Individual Retirement Account (IRA) do not reduce your current income subject to federal income taxes.  This newer

Roth IRA does allow your contributions to grow federal income tax free.  You fund a Roth with after-tax or post-tax dollars so that later you may be eligible to make totally tax free Roth IRA withdrawals.  So you forfeit the current income tax benefit for the option to make totally tax free withdrawals during retirement.  This may be especially important during any retirement years where you have large unexpected expenses.  Withdrawing additional funds from a tax-deferred Traditional IRA would increase your taxable income that year.  This may make more of your Social Security Income taxable, and may boost you into a higher tax bracket.  Your  Roth IRA may be able to provide you the extra tax-free income to cover those large unexpected expenses during retirement.  

That’s right, every penny you withdraw from your Roth IRA after 59.5 should go straight into your pocket.  This may be especially important in your early retirement years to cover additional travel as well as those unexpected expenses.

In summary there are two big differences between your Roth IRA and your Traditional IRA.  Your Roth IRA does not provide you a current tax income deduction; however, your Roth IRA should provide you a totally tax free investment to withdraw funds from after age 59.5.  Remember that your Traditional IRA might provide that current income tax deduction.   Do you Roth IRA or do you Traditional IRA ?  Well actually, in any given tax year you may be eligible to do both.  You could put 25% or 50% of your eligible deductible contribution into your Roth IRA, and then put the balance into your Traditional IRA.  You should discuss and compare with your tax advisor the benefits of contributing to both your Roth IRA and your Traditional IRA.  

Are You Eligible for a Roth IRA Contribution ?

Roth IRAs like Traditional IRAs have income eligibility limits.  So if you make too much money you may not be eligible to contribute to your Roth IRA.  Most Americans qualify for a Roth IRA contribution with an adjusted gross income of $203,000 for those Married Filing Jointly or a Qualifying Widow(er); and adjusted gross income of $137,000 for those filing Single, Head of Household, and those Married Filing Separately that did not live with their spouse anytime in 2020.  For tax year 2020 you might be able to contribute up to $6,000 into your Roth IRA.  Those age 50 plus may be able to contribute up to $7,000 into their Roth IRA.  Your Modified Adjusted Gross Income (MAGI) may reduce the above maximums, and you should consult your tax advisor for your specific situation.    

Updated by Donn J. Sinclair, MBA

in Rock Hill SC and Charlotte NC

April 17, 2020      (803)329-0615

DJS: More information is available at  See Publication 590-A and Publication 590-B. This information is intended for educational purposes only, and should not be considered as a solicitation for the purchase or sale of any securities, nor be relied upon as financial advice.  Past performance is no guarantee of future results.  



Capital Gains and Losses – Things to Know !

by Kristin P. Sinclair  – A Accu Tax  – January 13, 2020

Normally when you sell a capital asset it results in a capital gain or capital loss. A capital asset includes most property you own for personal use, or that you own as an investment. The following are a few things the IRS suggests you know so that you can better understand your capital gains and losses:

 Capital Assets include property such as your home or car; as well as investment property, which might include real estate precious jewelry, mutual funds, or stocks and bonds.

Gains and Losses are the difference between your cost basis and the amount you receive when you sell an asset. Normally your cost basis is what you paid for your capital asset plus any improvement costs.

Net Investment Income Tax Applies to certain net investment income for individuals, estates, and trusts at a rate of 3.8% for those with income above the statutory thresholds.

Deductible Losses may apply to capital losses on the sale of investment property. You cannot deduct losses on the sale of capital assets that you hold for personal use.

Limit on Losses apply to your capital losses if the losses are more than your capital gains for that same tax year. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

Carryover Losses are normally permitted for those losses that exceed your total net capital loss in any one tax year. You should be able to carry that excess loss over to the next year’s tax return.

Long and Short Term capital gains and losses are treated as either long-term or short-term. Your length of ownership of the capital asset determines long or short. If you held the capital asset for one year or less, the gain or loss is short-term. Otherwise, it is a long-term capital gain or loss.

Net Capital Gain occurs when your long-term gains are more than your long-term losses. That difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a net capital gain.

Tax Rate on a net capital gain usually depends on your income. Your maximum tax rate on a net capital gain is 20 percent. Please note that for most taxpayers a zero or 15 percent rate will apply. A 25 or 28 percent tax rate can also apply to certain types of net capital gains.

There’s still may be time to review your 2018 capital gain or loss scenario. Please phone Kristin today at (803)329-0615 and see how she might help you with your 2014 tax return.


Updated by Kristin P. Sinclair: A Accu Tax

in Charlotte NC and Rock Hill SC

January 13, 2020   (803)329-0609

KPS: More information is available at

See Publication 590-A and Publication 590-B.

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What If You Should Inherit an IRA

by Kristin P. Sinclair   A Accu Tax   April 12, 2020

If you or your spouse should die, then the survivor generally has several options for the Inherited IRA:

A.)  Spousal survivors can designate themselves as the IRA owner, and then the survivors may elect to treat the Inherited IRA as their own Traditional IRA.

B.)  Treat the Inherited IRA as their own by rolling it over into: their Qualified Employer Plan (such as a 401k plan); their Qualified Employee Annuity Plan (403a plan); their Tax-Sheltered Annuity Plan (403b plan); or their state or local government Deferred Compensation 457 plan.  

C.)  The surviving spouse may also elect to treat themselves as the IRA Beneficiary, rather than treating the Traditional IRA as their own IRA.  

Please note that surviving spouses designated as the sole beneficiary, and who have an unlimited right to withdraw funds, will also be considered to have treated an Inherited IRA as their own Traditional IRA if: they do not take the Traditional IRA required minimum distribution (RMD) for a year; or make contributions to the Inherited IRA.  Such contributions also include Traditional IRA Rollover Contributions into the Inherited IRA.    


Aaron inherited his wife Louise’s 401k plan.  Louise’s former Charlotte NC employer sent Aaron the forms to treat this as his own Traditional IRA.  Aaron intends to ask his Rock Hill SC tax advisor if he should do an IRA Rollover and treat the 401(k) as his own Traditional IRA.  If so, then Aaron may roll the 401k into his ETF  IRA.


Kristin P. Sinclair: A Accu Tax

Updated in Charlotte NC and Rock Hill SC

April 12, 2020   (803)329-0609

KPS: More information is available at

See Publication 590-A and Publication 590-B.  

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Asset Allocation in Your IRA

by Donn J. Sinclair MBA  – March 12, 2020

Asset allocation refers to the mix of investments you choose for your IRA. More specifically, what percentage of your IRA portfolio do you have invested in stocks, bonds, cash, and other asset classes. The IRA could be a Traditional IRA, IRA Rollover, Roth IRA, SEP-IRA, or SIMPLE-IRA. Your asset allocation should always consider your temperament for risk.


Finding Your Mix

The concept behind asset allocation is very simple: Don’t put all your eggs in one basket. But the implementation may be somewhat more complex. The mix of assets you choose for your IRA depends largely on your personal financial situation, your time horizon, and your risk temperament.  Personal financial considerations include: will you and/or your spouse continue to work seasonally or part-time during retirement; how much have you saved to date for retirement; whether your retirement savings are post-tax or pre-tax(IRA, 401k, etcetera).  Your time horizon is the length of time you have to invest before you need your retirement funds.  Several financial goals may require that an IRA portfolio have several time horizons; and these different goals may actually be in conflict.

Your Risk Temperament or Tolerance

This is your financial ability and emotional willingness to take risk in pursuit of reward with your IRA.  Calculating your risk tolerance requires you to examine your income, your assets, your responsibilities, and your ability to cope with stock and bond markets ups and downs.  When you pursue IRA financial goals as a household, then you must also consider your spouse’s risk tolerance.  


Rebalance Your IRA Portfolio

Once you calculate an IRA asset allocation that feels right for you, then periodically you should monitor your allocation.  A portfolio that starts out with 60% stock funds and 40% bond funds may shift to 70% stock funds and 30% bond funds, if your stock funds outperform your bond funds for a length of time.  Conversely, if bond funds outperform stock funds, then your asset allocation portfolio may be overweight in bond funds.   You should establish regular time periods to review your IRA portfolio, and rebalance your asset allocation as necessary. Should your IRA get out of alignment, then you may rebalance your portfolio by selling or exchanging assets in one category, and buying or exchanging assets in another.  Pay attention to any rebalancing costs.    

Changing Times and Course

As you get closer to your financial goal and you time horizon shortens, then your ideal IRA asset allocation could change.  Generally you should pursue a more conservative asset allocation when you have less time to reach your financial goals.  Life changes including: having children, caring for aging parents, loss of employment, and adverse health may also impact your financial goals and risk tolerance.   Your IRA asset allocation should change accordingly.  


A Few Words About Risk and Reward in Your IRA

You should carefully consider any savings and investment vehicle’s objectives, risks, expenses, and rewards.  Not all savings and investment vehicles may be appropriate for everyone.  Every individual is unique, has their own set of financial circumstances, and comfort level with saving and investment risk.  Also, prior to any IRA decisions or IRA investing, you should carefully read the available material to better understand the specifics of your selected IRA savings or IRA investment vehicle.  

You should consult your tax advisor or for more information.  The above information is intended as educational information and not as investment advice.  This is a great time to check and update the beneficiary designations on your Traditional IRA, Roth IRA, and any IRA Rollover.



Donn J. Sinclair, MBA   (803) 329-0609   March 12, 2020

@Sinclair Financial Solutions is independently owned and operated. Donn J. Sinclair, MBA is insurance licensed in NC & SC (NIPR NPN#1722815). Investment Advisory Services offered through Prosperity Wealth Management, Inc., 2333 San Ramon Valley Boulevard, Suite #200 – San Ramon, CA 94583. Securities offered through Fortune Financial Services, Inc., 3582 Brodhead Road, Suite #202 – Monaca, PA 15061; branch office of record located at 948 Myrtle Drive Rock Hill, SC 29730, Member FINRA/SIPC. Sinclair Financial Solutions, Prosperity Wealth Management, and Fortune Financial Services, Inc are separate entities. SC Real Estate License #76530, and NRDS #554027312.