Planning with taxes in mind

Provisional income is the measure used to decide whether your Social Security benefits are taxed. It includes your adjusted gross income, any tax-exempt interest, and half of your Social Security benefits. Understanding it helps you see how other income can push more of your benefits into a taxable range.

A Roth conversion moves money from a traditional retirement account into a Roth account. You generally pay income tax on the amount you convert in that year, and later qualified withdrawals from the Roth account can be tax-free. Whether it makes sense depends on your tax situation, so it belongs in a conversation with a tax professional.

A qualified charitable distribution is a direct transfer from an IRA to a qualified charity. For people who are old enough, it can count toward your required minimum distribution and may not be included in your taxable income. The rules are specific, so it helps to confirm the details with a tax professional.

If your income is above certain limits, you may pay more for Medicare Part B and Part D through income-related monthly adjustment amounts. These are based on your income from two years earlier, so what you earn or convert today can affect your Medicare costs two years from now.

It helps to bring a sense of your income sources, your account types and balances, and any big changes you expect, like retiring or selling a home. You do not need a complete tax return — just enough for us to explain how the pieces fit together.

No. Total Path Solutions does not provide tax advice. We offer educational guidance to help you understand how taxes can affect your financial picture, and we encourage you to work with a qualified tax professional for advice specific to your situation.