How to escape the double tax trap of your qualified plan funds

How to escape the double tax trap of your qualified plan funds

Sorry, but you must pay at least one tax... maybe a double tax Following is the story of a reader of this column (Jack) After a planning meeting with his attorney and CPA, both agreed that Jack's family would receive about only $540,000 out of the $1.5 million he had in his IRA About $960,000 (64 percent) would be lost to the IRS There are many strategies but let's explore the one we use the most, called a "Retirement Plan Rescue" (RPR)

Raise your hand if you have a significant amount of dollars ($400,000 or more) in a profit-sharing plan, IRA, 401(k) or other qualified plan. Got your hand up? You are in a tax trap. Sorry, but you must pay at least one tax... maybe a double tax. This column explains the horrible tax rules and how to turn the double tax into tax-free dollars.

An example is the best way to explain this crazy area of the tax law. Following is the story of a reader of this column (Jack). He owns a clos

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TAGS: Taxes
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