More Articles
-
Three Strategic Mid-Year Tax Tips
With summer 2019 now underway, here are three strategic mid-year tax planning tips.
-
How To Avoid State Income Tax On Distributions From IRAs
Do you own a large IRA and live in a state with an income tax? Consider setting up a non-grantor trust in a state with no income tax. While this financial planning tactic may sound exotic, it's common sense and can make a material difference in your life and beyond.
-
Watch The Fed Closely In The Months Ahead
In June, the economic expansion entered its eleventh year, officially setting a new record as the longest growth cycle in modern U.S. history. The previous record-setter was the 10-year expansion that bracketed the 1990s.
-
Say Goodbye To Stretch IRAs And Get A New Plan
Bid adieu to stretch IRAs! A new tax law widely expected to become law by the end of 2019 will kill this strategy for passing on your IRAs to the next generation while minimizing the amount that goes to Uncle Sam. Adoption of the legislation is not sure, but it is highly likely, making it wise to plan now for the demise of the stretch technique.
-
Tax Alert: Plan Now For The Demise Of Stretch IRAs
Say goodbye to the stretch IRA! That's the message from Congress, where a pending bill with bipartisan support would deep-six this tax-advantaged practice. Stretch IRAs have been a boon to non-spouse beneficiaries who inherit a retirement account because they can extend the period of tax-free growth on an inherited IRA over their expected lifetime.
-
Prepare For A Sweeping New Law On Retirement Account Taxes
A sweeping new law changing retirement investing tax rules was passed by the House of Representatives on May 29th. It's expected to be passed by the Senate and has the support of President Donald J. Trump. Although the legislation may not be signed into law until late this year, individuals with retirement accounts should consider how its enactment will affect them and their beneficiaries. Here's what you need to know now:
-
U.S. - China Trade War Coverage Distorts Economic Reality
The amount of coverage in the media of the U.S. - China trade war is far out of proportion with the potential impact that China - U.S. trade has on the U.S. economy.
-
How To Give Gifts And Not Trip On The Gift Tax
It may be better to give than to receive, as the old saying goes, but it's also best to avoid the taxes on your generosity. What's also smart is knowing when you have to file a tax form as a gift giver.
-
Give To Charity From An IRA To Lower Your Tax Bill
To keep your tax bill down, if you are over 70½, consider a qualified charitable contribution, which makes donations of up to $100,000 from an Individual Retirement Account (IRA) to a fully deductible charity.
-
Staying Realistic About Investing Amid Volatile Market Swings
Despite the way securities traditionally are sold and what you hear in the media, the stock market confoundingly defies prediction. Look at the two quarters ended March 30th, 2019: The 19.8% plunge in the Standard & Poor's 500 index in the fourth quarter of 2018 was a flash bear market; in the first quarter of 2019, a recovery was just as swift, a snapback gain of 13% gain. If whipsaw emotional shifts from fear to greed make it harder to stay realistic about what to expect from a prudently-designed retirement portfolio, this chart offers a way to know what to expect based on historical data.
- Read More
Financial Briefs
Three Strategic Mid-Year Tax Tips
With summer 2019 now underway, here are three strategic mid-year tax planning tips.
Itemizing Strategically Is A Thing. In 2018, for the first time, the Tax Cut and Jobs Act (TCJA) nearly doubled the standard deduction to $12,000 for single filers and $24,000 for married couples filing jointly. The number of taxpayers eligible to itemize was slashed by 60% by the TCJA. Only about 12% of taxpayers are still eligible to itemize expenses for medical, dental, home-mortgage and other loan interest, charitable contributions and miscellaneous fees, including those for tax preparation and investment advice. With just a bit of forethought, you can plan to bunch deductions once every three years, or maybe two. Itemizing strategically may materially reduce your income tax bill. If you did not itemize deductions in 2018, bunching itemized deductions in 2019 may boost your total itemized deductions well beyond your standard deduction. If not, you may want to plan on bunching and itemizing next year. The near-doubling of the standard deduction was intended to simplify federal taxation but has actually complicated it. Millions of the nearly 20 million taxpayers no longer eligible for itemizing now must strategically plan to itemize every two or three years.
Donor Advised Funds. One of the ways to boost your deductions this year is by giving to charity, and one of the easy ways is to give through a donor advised fund (DAF). With a DAF, you can split gifts among different charities. You contribute securities or cash and claim the deduction that same year. If you know you will be taking a taxable capital gain on an investment before the end of 2019, it's wise to consider donating appreciated securities to a DAF. You receive a deduction on the amount you contribute and avoid paying a capital gains tax. In addition, the charity receives the full amount of your largesse. If you donate cash or securities to a DAF in 2019, you can take a deduction on your 2019 return but wait to grant the money to a charity next year, or in 2021, and can take the deduction. Brokerages offer with DAFs. They invest your donations but charge an investment management fee and administrative expenses. We offer strategic guidance and can answer your questions about this.
Large IRAs. If you live in a state with an income tax, you might want to consider setting up a non-grantor trust in a state with no income tax. Why? Say you have a $1 million IRA. Placing it in a non-grantor trust in a state with no income tax avoids state income taxes. That's big! At your death, under the SECURE Act bill expected to be enacted before the end of 2019, your heirs would be required to distribute the IRA you leave them within 10 years. According to Financial Advisor News Service, which we are licensed to distribute, placing your IRA in a non-grantor trust in a state with no income tax allows your beneficiaries to avoid paying state income tax on the distributions from the IRA. To be clear, capital appreciation and dividend income on your IRA can be free of state income tax by applying this strategy! A recent U.S. Supreme Court decision upheld the legal concept behind this strategy and out-of-state trusts are likely a device that retirees will hear about in the mainstream financial press in the months ahead.
© 2019. All Rights Reserved.