Cryptocurrency has become an increasingly popular investment and payment method, but it also creates important tax responsibilities. Whether you buy Bitcoin, sell Ethereum, trade digital assets, receive cryptocurrency as income, or use crypto to purchase goods and services, your transactions may have tax implications. Proper cryptocurrency tax return preparation is essential for staying compliant and…

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Reaching the age when Required Minimum Distributions (RMDs) begin is an important retirement milestone. For many retirees, the first question is not simply, “How much do I have to withdraw?” but rather, “How will this  additional income affect my Social Security, pension, and taxes?” The good news is that an RMD generally does not reduce the amount of  Social Security or pension benefits you receive. However, an RMD can increase your taxable income and may cause a larger portion of your Social  Security benefits to become taxable. Understanding how these sources of retirement income interact can help you avoid surprises at tax time. What Is an RMD? A Required Minimum Distribution is the minimum amount you generally must withdraw each year from certain tax-deferred retirement accounts, including traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer-sponsored retirement plans. Under current rules, most individuals generally begin RMDs at age 73. The  first RMD is for the year you reach age 73, although you generally have  until April 1 of the following year to take that first distribution. After that, annual RMDs are generally due by December 31. RMDs are generally taxable as ordinary income unless the distribution  includes amounts that are not taxable, such as certain previously taxed  basis. Will My RMD Reduce My Social Security Check? Generally, no. An RMD does not reduce your Social Security retirement benefit simply because you took money from your IRA or other retirement account. The Social Security Administration explains that pension payments,  annuities, and interest or dividends from savings and investments are not  considered earnings for purposes of determining Social Security benefits.  IRA withdrawals likewise do not reduce your Social Security retirement  benefit. However, there is an important distinction: Your RMD generally will not reduce your Social Security benefit, but it may cause more of your Social Security benefit to be subject to federal  income tax. That distinction is extremely important for retirees. How Can an RMD Affect the Taxation of Social Security? The IRS uses a special calculation to determine whether part of your Social Security benefits are taxable. For this calculation, your “combined income” generally includes: Adjusted Gross Income (AGI)+ Tax-exempt interest+ One-half of your Social Security benefits The current base amounts are generally: $25,000 for single filers $32,000 for married couples filing jointly $0 for married individuals filing separately who lived with their  spouse at any time during the year Depending on your income, up to 85% of your Social Security benefits  may be taxable for federal income tax purposes. An RMD increases your income and therefore can affect this calculation. Example: RMD and Social Security Suppose Mary is retired and receives: Social Security: $30,000 Pension: $20,000 RMD: $25,000 Other taxable income: $5,000 The $25,000 RMD does not cause Social Security to stop or reduce Mary’s  monthly benefit. However, the RMD increases Mary’s income. As a result, more of her Social Security benefits may become taxable. This is why retirees should think about their overall tax picture, rather  than looking at their RMD in isolation. What About Pension Income? Your pension and RMD are generally separate sources of retirement income. An RMD generally does not reduce a private pension payment. If your  pension provides a monthly benefit of $2,000, for example, taking an RMD  does not normally cause the pension company to reduce that payment. However, pension income is generally included in the tax calculation to the extent it is taxable. The IRS notes that pension and annuity payments may …

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Taxes

Extension filers don’t have to wait until Oct. 15, 2026, to file their federal tax return. Taxpayers are encouraged not to wait and to take steps to help them prepare an accurate return. Let’s go over a few tips to make completing the return quick and easy. Gather and review tax documents: Complete and accurate…

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For many Michigan residents, buying a home is about more than having a place to live. Homeownership can also provide opportunities to reduce certain tax costs while building long-term equity. Understanding the potential tax benefits of owning a home in Michigan can help you make a more informed decision about whether purchasing a home is…

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The Alternative Minimum Tax (AMT) is a federal tax system designed to ensure that certain taxpayers with higher incomes pay at least a minimum amount of federal income tax. While most taxpayers calculate their federal tax using the standard tax rules, some individuals may need to calculate their liability under both the regular tax system…

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Falling behind on taxes can feel overwhelming, especially when multiple years of unfiled returns, missing documents, and IRS notices are involved. Fortunately, you do not have to navigate the process alone. AIM Financial provides professional tax preparation services designed to help individuals and businesses get caught up, organize their financial records, and move forward with…

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Owning a rental property can be a great way to build long-term wealth, but managing the financial and tax responsibilities that come with rental real estate can quickly become complicated. From tracking expenses to understanding deductions and depreciation, rental property owners have many details to consider when filing their taxes. That’s where working with a…

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Starting a business as a single-member LLC can be an exciting step toward financial independence. However, one of the most important responsibilities that comes with owning an LLC is understanding how to properly file your taxes. While an LLC offers legal protection for your business, your federal tax filing requirements may be simpler—or more complicated—than…

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