CFA vs. CFP: what they are and how they differ
Great article explaining the top two credentials in personal finance. Having gone through both programs I’ll have to agree with everything they state, but in the end why not work [...]
Great article explaining the top two credentials in personal finance. Having gone through both programs I’ll have to agree with everything they state, but in the end why not work [...]
Today BB&T and Suntrust announced a merger. I guess to survive and compete with the mega financial institutions they had to, but dang look at this graphic from 1996 to 2009 of how the last few standing have gobbled up everyone: (click on image and it will enlarge for viewing)
The IRS has clarified the new tax law and its impact on rental properties. Originally the wording stated that small businesses and REIT’s would get the 20% pass through but for owners of residential rental properties it was unclear. They have now issued guidance and if you treat your properties like a business and spend over 250 hours annually on them (client service, collecting rent, repairs, etc) then you meet the safe harbor test to deduct 20% of net rental income from passing through to your tax return.
More info here: https://www.irs.gov/pub/irs-drop/n-19-07.pdf
This should not be considered a replacement for Long Term Care insurance, but Medicare is relaxing rules on home health/assistance as they realize it is cheaper than hospitalization:
As we near the end of 2018, here is a reminder of the major change for tax filers next year:
- The biggest item of the tax law change is the caps on itemized deductions that will move more people to use the “standard” deduction:
Standard Deduction:
Personal Exemptions:
Summary:
Unless you have a lot of mortgage interest and charitable contributions, odds are you will now just do a standard deduction.
NOTE:
If you are over 70 1/2 and required to do RMD’s, and you make charitable contributions but will fall into the standard deduction category – consider making your charitable contributions direct from your retirement account (IRA). These will go towards your RMD requirement and not be taxable as income when sent direct from your IRA.
Prior to 2018, mortgage interest on $1M primary mortgage and Home Equity loan interest on a loan up to $100k were deductible on your Schedule A itemized deduction form of your tax return. With the new tax law that has changed and caused a bit of confusion:
For mortgages taken out in 2018, the total combined mortgage loan amounts (primary and home equity/second) where interest can be deducted has dropped to $750,000. The question is what about Home Equity Loan interest? The new tax law made it sound as if Home Equity loan interest would no longer be deductible, however per the IRS that is not the case. If a Home Equity loan was taken out to specifically make improvements to the property then the interest on the loan can still be deducted on your Schedule A. The caveat is that the loan has to be to improve the residence it is loaned against, no using it to pay off credit cards, vacations, etc…
For more info see the IRS’ statement on this: https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law
This question came up recently with a client that had both Non-deductible contributions in an IRA mixed with Pre-tax (deductible) contributions. When you take a withdrawal how much is taxable? It is called the Pro-Rata rule with the IRS and you have divide your after tax contributions by the entire retirement balance to figure out non taxable basis.
Kudos to Wells Fargo for putting out this great info sheet that explains the whole thing: https://www08.wellsfargomedia.com/assets/pdf/personal/investing/retirement/taxes-and-retirement/pro-rata-rule.pdf
Did you know that the IRS has short video tutorials on a variety of topics? These videos discuss individual tax items as well as questions small business owners might have regarding payroll withholdings and retirement plans:
As we wrap up the 2017 tax year and look forward to the tax cuts of 2018, many are wondering if they should adjust their withholdings? In my small sampling statistic, about 85% of the clients I do taxes for will see a benefit from the 2018 Tax Cuts. Those that are still earning a regular paycheck have the option of adjusting their current withholdings to keep more money throughout the year or simply wait and get a refund when they file next year.
Whether you did your own taxes or worked with a tax pro, you should have gotten an estimate on what your 2018 taxes would look like based on the new rules. From there you can figure out if you need to adjust your withholding’s through your employer by submitting a new W4.
So how do you make the decision on what to put in your W4? The IRS has a withholding calculator to help you get closer to your actual tax liability under the new rules here: https://www.irs.gov/individuals/irs-withholding-calculator
Once you determine any changes you need to make, fill out a new W4 and hand in to your payroll department: https://www.irs.gov/pub/irs-pdf/fw4.pdf
A communication that I sent out to clients this morning, along with a picture that to me shows the predestined potential market moves ahead:
“Another week, another headline out of DC as the Chief Economic Advisor, Gary Cohn resigned. Last week it was tariffs, this week a departure, next week it will be something else.