Tax Planning

Appreciated Securities

By |2024-05-16T22:26:45-05:00April 8, 2024|Featured, Tax Planning|

Have you ever wondered how to transform your investment wins into social wins?  Hint: It's not just about writing a check to your favorite charity. There might be a security or another type of property in your portfolio that has appreciated in value over the years.  Donating these securities can be a true win-win for everyone. Turning Gains into Good... Smartly Donating appreciated assets like stocks, bonds, and real estate can have some sizeable benefits that exceed the value in straight-up cash donations. Firstly, tax efficiency. When you donate securities or property that have increased in value — and you've held onto them for more than a year — you can bypass the capital gains tax you'd otherwise owe if you sold those assets. Plus, you're usually eligible to deduct the full fair market value of the donation on your tax returns, assuming you itemize your deductions. It’s like getting [...]

Qualified Charitable Distributions

By |2024-05-16T22:16:54-05:00April 1, 2024|Featured, Tax Planning|

Today we are continuing our conversation around charitable planning.  The rules around Individual Retirement Accounts are forever in flux. One of the more intricate mandates within IRA management is the Required Minimum Distribution (RMD) — where the IRS requires one to being “spending” or “distributing” funds from their IRA.  These distributions face the most penal tax structure – ordinary income. However, there's a silver lining for those that wish to harness their RMDs for good — Qualified Charitable Distributions (QCDs). Setting the Scene with RMDs Understanding RMDs is important and something that requires an investor’s attention.  — they are the IRS's way of ensuring that tax-deferred retirement accounts are used for what they were designed for: the financial support of your retirement. But this regulation, while rooted in good financial sense, comes with its complexities and tax implications.  Primarily it is not voluntary.  The distributions are required per their moniker.  [...]

The Tax Man Cometh

By |2024-03-03T19:38:11-06:00December 13, 2023|Tax Planning|

Legislation moving through our federal government right now includes a number of new tax proposals. Nothing is final, but I thought it would be helpful to see where the plan is heading and any actions that we should consider. 1. The high end of the ordinary income tax bracket is proposed to be moved back up to 39.6% at a much lower income level – and the marriage penalty is back. Currently the 39.6% rate would apply in 2022 for taxable income over $400,000 (single), $450,000 (married filing jointly). The chart below demonstrates that it is going to take less income to be moved up into this higher bracket. The higher income threshold is very close for single and married filiers ($400k v $450k). The marriage penalty is back and higher taxes may result due to one’s filing status. For some of you it may make sense to accelerate [...]

Health Savings Accounts: Pros, Cons, and Retirement Considerations

By |2024-03-03T19:40:07-06:00December 13, 2023|Tax Planning|

What if your child needs braces? The cost may be as much as $6,000 for metal braces—more modern versions can run as much as $13,000. Your health insurance may cover only a portion of the cost. If you're well past the braces stage, what if you or a loved one needs extended care, which almost 70% of those turning 65 today are expected to need at some point? Extended care can be costly, and private health insurance plans may not cover it. Fortunately, there is a way in which you can pay for some of these expenses using a tax-advantaged savings vehicle.1,2 What is a Health Saving Account? In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which also created Health Savings Accounts (HSAs) as a tax-advantaged tool to help pay for medical expenses. HSAs are designed to be used in conjunction with a high-deductible health [...]

The Impact of SECURE 2.0 in 2024 and Beyond

By |2024-03-03T19:40:34-06:00December 13, 2023|Tax Planning|

SECURE 2.0: Changes Going Into Effect in 2024 Passed in 2019, the SECURE Act was the most substantial retirement legislation in over a decade. It contained important changes designed to help investors save more and be better prepared for the future. To build on the popular aspects of the SECURE Act, Congress, late last year, passed SECURE 2.0. Although the new laws will impact all savers in some ways, navigating all of the changes is a bit like putting a puzzle together; so we thought we would outline the key highlights of what provisions of SECURE 2.0 go into effect next year. New 2024 Retirement Savings Changes Retirement Plans and Personal Emergencies Distributions from retirement plans for personal emergencies will be allowed penalty-free. You will be allowed one distribution per year of up to $1,000, with the choice to repay the distribution within 3 years.1 Individual Retirement Account [...]

Preparing for the Tax Cuts and Jobs Act Sunset at the End of 2025

By |2024-03-03T19:41:58-06:00December 13, 2023|Tax Planning|

While we haven’t yet said goodbye to 2023, it’s not too early to begin thinking about any tax changes that may be on the horizon. The Tax Cuts and Jobs Act (TCJA) of 2017 was designed to overhaul the federal tax code by reforming individual and business taxes. As a result, sweeping tax changes lowered marginal tax rates and the cost of capital. Although some of these provisions are permanent, most of the individual tax changes are not. Unless Congress acts, many of the changes implemented are scheduled to “sunset” on December 31, 2025. At that time, rates will revert to pre-2017 levels. Knowing what changes may be coming and preparing for this new reality may be a good first step. There may be actions you can take to prepare for what may happen next. Here’s a brief summary of the TCJA-related changes that are expected for each quarter [...]

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