Archives for Client Bulletin

November Client Bulletin

Year-end Planning Under The New Tax Law

The Tax Cuts and Jobs Act of 2017 (TCJA), passed at the end of last year, generally took effect in 2018. Therefore, the fourth quarter of this year provides the first real opportunity for year-end planning under what has been called the most important tax law passed in more than 30 years.

Broadly, the TCJA lowered income tax rates for individuals and for businesses.  As you’ll read in this issue of the CPA Client Bulletin, the standard deduction has been substantially increased, but many deductions have been trimmed or eliminated, and some innovative tax benefits have been introduced.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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October Client Bulletin

Supreme Court Decision in Wayfair Affects Online Sellers

If your company makes sales to out-of state buyers, do you need to collect state sales tax? Until recently, Supreme Court decisions from the 20th century declared that would not necessarily be the case.

Example 1: ABC Corp., based in Alabama, sends a catalog to customers and prospects. A consumer who lives in Wyoming places a $100 order. Assume that ABC has neither employees nor property in Wyoming. ABC would not be required to collect Wyoming sales tax on the $100 purchase price …

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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September Client Bulletin

A Grain of SALT In The New IRS Notice

Taxpayers who itemize deductions on Schedule A of their tax return have been able to deduct outlays for state and local income tax as well as property tax with no upper limit. (State and local sales tax may be deducted instead of income tax.) However, as of 2018, the Tax Cuts and Jobs Act of 2017 provides that no more than $10,000 of these state and local tax (SALT) expenses can be deducted on single or joint tax returns ($5,000 for married individuals filing separately).

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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August Client Bulletin

How The New Tax Law Affects 529 Plans

For many years, 529 college savings plans have offered a tax-favored way to save for higher education. These plans, officially qualified tuition programs, are named for the IRC section that provides their advantages.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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July Client Bulletin

More Give in the Gift Tax

The Tax Cuts and Jobs Act of 2017 increased the federal estate tax exemption to $11.18 million for 2018. That’s per person, so the combined exemption for a married couple
can be as much as $22,360,000 worth of assets this year.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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April Client Bulletin

Patience Is Prudent

The Tax Cuts and Jobs Act (TCJA) of 2017, passed at year end, has been called the most extensive tax legislation in more than 30 years. It’s certainly far reaching, covering individual income taxes, business income taxes, and estate taxes. The new law has many tax saving opportunities as well as possible pitfalls.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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March Client Bulletin

Weighing the risks of bond funds

Most portfolio allocations call for a mix of stocks (equities) and bonds (fixed income). The underlying theory is that stocks may deliver substantial results over the long term, whereas bonds contribute interest income and lower volatility.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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February Client Bulletin

Solving The Annuity Puzzle

Americans hold billions of dollars in annuities,  yet they are widely misunderstood.  Used properly, an annuity can serve valuable purposes in personal financial planning.  On the other hand, some types of annuities are widely criticized, even scorned by some financial advisors.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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January Client Bulletin

Investing In 2018:  Dividend Stocks.

As of this writing, it appears that 2018 may be a difficult year for investors.  Yields on bonds, bank accounts, money market funds, and other savings vehicles are extremely low, with questionable prospects for substantial increases.  Stock market indexes, on the other hand, are at or near record levels….

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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December Client Bulletin

Pros and Cons of Asset Management Fees.

A transition is underway within investment firms. Increasingly, the people you hire to manage your money don’t refer themselves as brokers or stockbrokers. Instead, they’re now financial advisors, financial planners, or financial consultants….

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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November Client Bulletin

Uncertainty Hampers Year-End Tax Planning

As of this writing, year-end tax planning is clouded by questions about Federal legislation. President Trump and many of the Republicans in Congress favor changes that would affect the tax code.  Currently, the success they’ll have in their efforts is difficult to predict…..

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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October Client Bulletin

Bank

Prepare Your Kids for Financial Independence.

An AICPA survey discovered that parents are more likely to talk with their children about manners, eating habits, school grades, and substance abuse than about finances.  All these topics are important, but it’s also vital to teach your kids the basics of handling money.

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Read the insert here.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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September Client Bulletin

 

Playing defense with your retirement accounts.

Many people prefer to have some conservative holdings in their IRAs and other retirement accounts.  This century has already produced two nasty bear markets (in 2000-2002 and 2007-2009). If a third downtown occurs, investors will be glad they held some defensive positions, which might minimize losses and possibly offer gains.

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Read the insert here.

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Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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June Client Bulletin

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Ever wonder what the third best investment you can make it? It is not paying down high-interest debt or making sure you are investing in your 401K so that you get your employer match but it is just as important. Get the answer in our June Investment newsletter!

Due to increased client interest in financial planning, I continue to provide quarterly updates on the investments I recommend.

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July Client Bulletin 2015

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The July Client Bulletin discusses “The Math of Buy and Hold.”  I began my firm September 1, 1985,  and by 1992, clients began to ask for my advice on financial planning and what investments I owned.  They would tell me that they were uncomfortable with their financial advisors.

It seemed like they paid a lot in fees, had a poor return, and their financial advisors bought and sold their stocks too often.

I always advise my clients that if they are paying for advice, they should realize a superior return in exchange.  My long time clients have received my quarterly Financial Planning Services newsletter for years.  It states that “I am not a market timer.  The strategy followed is buy and hold.  This strategy reduces trading costs, taxes, and planner fees. ” Many financial advisors try to time the market.  They say that their research lets them know when to buy or sell a stock or a fund.  The problem with this strategy is three fold: 1) If you make a decision to sell, the market/stock could go up in value and you lose out; 2) When to buy?  Many brokers buy/sell the same stock.  I always say it is easy to sell and lock in your profit.  It is more difficult to pick the right time to re-buy or re-enter the market; 3) Every time you buy/sell a stock/fund, you pay a commission.  You lose money both from converting cash to investment and vice versa.  The investment must go up in value to overcome this cost.  In addition, every time you sell and make money, you have additional taxable income and must pay more taxes.  Therefore, you have less money to reinvest with.  Again, you must have a substantially better return on the new vs the old stock/fund for the buy/sell strategy to work.

Clients who follow my investment advice have index funds, large cap funds, or a diversified portfolio of individuals stocks.  A portfolio of individual stocks works best in a taxable account.  For tax purposes, clients will only pick up dividend income and the occasional gain from the takeover of a stock.  In addition, I usually sell one losing stock per year to take advantage of the $3,000 annual loss rule for taxes.

Finally, I always advise clients that they should only be in the stock market if they believe it will go up over time.  If clients believe, as I do, that the market will be higher in ten years than today, it is hard to justify frequent selling and buying.  This only makes sense if one can outsmart the market.  I buy market leaders in various industries and hold on to them.  Because of that hold policy, I have stocks I bought for $5,000 that are currently worth more than $50,000.  Clients that pay for my financial planning service are able to see the return on every investment that they own on a spreadsheet that is updated quarterly.

My client bulletin discusses “The Math of Buy and Hold” in more detail plus information on passive losses and succession planning.  Please contact me if you need more information.

 

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