2021 Key Financial and Tax Facts
Updated PDF file for download: https://www.theadvisoryfirm.net/2021KeyFinancialFacts.pdf
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Filed under General, Personal Finance
Conflict of Interest
If your advisor is selling you an investment that he/she makes a commission on, there will always be an inherent conflict of interest. Is the investment good for the client or better for the advisor’s wallet? This is a more extreme case where investors lost a lot of money, but I’m sure that the advisors were attracted to the 9% commission payout:
Do you really want that big house in retirement?
Interesting article from the WSJ:
It just never seems to change
You would think that folks would learn that there is no free lunch and that no investment person can guarantee returns. However, folks still learn the hard way.
ps. No regulated investment professional can accept your investment money via Venmo!
SEC Seeks Emergency Relief to Halt Ponzi Scheme Run From College Fraternity House
Congress voting on retirement changes
A link on Yahoo regarding the upcoming vote:
Should you apply for medicare at 65?
The folks at Medicare.gov have put out a good question and answer PDF with different scenarios to help clear up the confusion about when to apply for medicare.
Do I apply for both A and B medicare at 65?
Where are the Atlanta offices for SS and Medicare?
What’s the real story with 2018 taxes?
The media has been all over the fact that many are not getting a refund this year and actually owe taxes this year. Actually from what I’m seeing, they are correct. However, it has nothing to do with the 2018 Tax Cuts.
Employers lowered the amount they were withholding from employee paychecks in 2018 and now it is coming back to haunt those taxpayers. Overall, what I’m seeing is that most are in a lower tax bracket (a few percent), but unfortunately did not withhold enough throughout 2018, so they owe. Especially those with higher incomes (limit on state/local tax deduction is also hurting).
Go ahead and adjust your W4 so that this doesn’t become a reoccurring problem next year: https://www.irs.gov/individuals/irs-withholding-calculator
Understanding the new tax deduction for self employed/ rental income
Just posted a newsletter that gives examples and explains the new 199A deduction. Download the newsletter here: Tax Newsletter Feb 2019
bank consolidation
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)
20% pass through deduction for Rental property income
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
Medicare is adding home health options
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: