Financial Planning Archives - Page 3 of 9

Tax Considerations for the Working Individual Reviewing 2018 Returns – Investments, Income, and Other Issues

January 2, 2020 Tags: Income, investing, Investments, Tax returns, Taxes Jacob Sturgill

Investments and income are typically the two biggest players in your tax plan. After all, these are likely to be your primary sources of personal revenue.

When it comes to planning your tax strategy, you need to consider a variety of factors related to your income and investments, as well as some various issues that are related to these categories. Here are the top considerations to make for income, investments, and other issues.

This article is second in a series on Tax Considerations for the Working Individual. Read of the series here:

Investment Income Issues

Depending on your specific investments, there are a few areas on your 2018 return to check and ensure whether you’re on the right path for your 2019 tax strategy.

Interest

Are your investments earning interest? (Review From 1040, Lines 2a and 2b) Did you receive any dividends? (1040, Lines 3a and 3b) If you answered “yes” to either of these questions, you need to reference Schedule B for more information about which accounts are generating interest and whether dividends earned are qualified or ordinary.

Income and Investments

If you’re self-employed and your income is greater than $200,000 ($250,000 married, filing jointly), you may be required to pay and additional Medicare tax at 0.9% (consult Form 8959). For all working individuals, if your income is greater than $200,000 ($250,000 MFJ), and you have high Net Investment Income (see Form 8960), your income may be subject to a Net Investment Income Tax at 3.8%.

Capital Gains

Remember, your capital gains and losses also count toward your income and make a difference at tax time. For capital gains distributions, consult Schedule D, Line 13; for losses look at Schedule D, Lines 6 and 14. Verify whether short- or long-term loss carryovers are properly accounted for.

Income Issues

While you’re probably already making notes of income changes from 2018 to 2019, here are some specifics to focus on during your review.

W-2 Employees

If you’re a W-2 employee, you’ll want to review your W-2 for any HSA and FSA contributions from both your employer and your pre-tax income. Additionally, you need to review your retirement plan contributions and employer matching.

Stock Options

If you are part of an employee stock option or have any other type of equity compensation, you will need to consult your 2018 return to see how this impacted your tax strategy during the last year. Look at your W-2 and Schedule D to learn more about how your get a better understanding of your tax responsibility for exercising or selling your option. If you filed an 83(b) election, ensure that you prepare one this year as well.

Other Issues

There are, of course, some odds and ends issues that are difficult to classify with other categories. However, when you’re filing your taxes, it’s important to account for all of your financial activities. Here are some additional issues you want to watch out for.

State-Specific Issues

You will want to take a look at your state return, in addition to your federal one, to look for specific issues unique to your locale. If you have recently moved or earned income in another state during the calendar year, consult a financial professional to learn about the tax laws that apply to your situation.

Real Estate

If you have real estate investments, consult Schedule E to see how to properly claim your rental income.

Student Loans

You may be able to claim interest paid from student loans if you paid any this year. Look at Schedule 1, Line 33 to see whether the deduction applies to your situation.

These are only some of the considerations that you need to make as you review your 2018 tax return and prepare for the upcoming tax season. To learn more about tax considerations for the working individual, consult our resources on family and filing issues.

This article is second in a series on Tax Considerations for the Working Individual. Read of the series here:

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tax Considerations for the Retiree – Investment Income and Other Issues

December 30, 2019 Tags: Income, Investments, Retiement, Taxes Jacob Sturgill

Your income situation as a retiree is probably quite a bit different than it was when you were working. There may be multiple streams of income to account for, as well as other unique factors to consider from year to year.

Investment income is an essential item to cover here, since this is likely to represent a meaningful portion of your retirement income. There may also be some odds and ends that impact your tax strategy in other ways, so we’ll take a look at those too.

This article is second in a series on Tax Considerations for the Retiree. Read of the series here:

When it comes to your investment income, here are the issues you want to consider:

Are You Reporting Investment Interest?

Investment interest should be reported on Form 1040, Lines 2a and 2b. You will also want to look at Schedule B to get a better idea of which accounts are generating interest and see how you reported them in 2018.

Did You Receive Dividends?

Dividends will also be reported on Form 1040, but on Lines 3a and 3b. Again, look at Schedule B to see whether the dividends are ordinary or qualified and how to proceed with reporting this income.

How Does Your MAGI Impact Your Net Investment Income?

If you have a MAGI above $200,000 ($250,000 MFJ), and significant investment income, you may be subject to an additional Net Investment Income Tax of 3.8% (Form 8960). Talk to your tax professional to learn more about whether this additional tax will affect your bottom line and to see whether there are strategies you can use to offset this liability.

Did You Have Capital Gains or Losses?

Look at Form 1040, Line 6 for reporting capital gains or losses. If you have Capital Gain Distributions, you’ll want to consult Schedule D, Line 13 for more information about reporting. For losses, look to Schedule D, Lines 6 and 14 to calculate your short- and long-term loss carryovers. Ensure that you account for losses carried over from previous tax returns.

Other Issues

Additionally, there are some tax issues that fall outside of the broader categories, but still need attention when you’re working on your tax strategy. These other issues include:

Medical Expenses

If you had large medical expenses during the year, you may be able to deduct a portion of the expenses from your tax responsibility. Look at Schedule A, Line 1 to understand more about your medical expenses and the deduction limit. You will also want to factor your Medicare Premiums and Long Term Care Premiums into your total medical expense figure.

State Taxes

As always, you will need to consider your individual state tax responsibility in addition to your federal taxes. Your state tax return from 2018 should contain information to help you get a better idea of what your state tax liability will be for this year. Your tax professional can help you to determine how state laws impact your tax strategy.

Real Estate

If you own rental properties, you may be able to claim deductions. Consult Schedule E for more details on how to claim your rental real estate deductions.

These are only some of the considerations that you need to make as you review your 2018 tax return and prepare for the upcoming tax season. To learn more about tax considerations for the retiree, see our post on family and filings issues.

This article is second in a series on Tax Considerations for the Retiree. Read of the series here:

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Ask an Advisor: What does the future look like for Puckett & Sturgill Financial Group?

December 27, 2019 Tags: Ask an Advisor, Behind the Scense P&S

Transcript

Paul: 00:08

Hi. Welcome to Puckett & Sturgill Financial Group Ask An Advisor segment. I’m Paul Sorenson, financial planner with Puckett & Sturgill Financial Group, and I’m here today with Aaron Puckett. Aaron, what’s the future for this firm look like? They’re, they’re creating a relationship with our firms, so what’s the future look like for Puckett & Sturgill?

Aaron: 00:26

Boy, I wish I could tell the future. I wish I had a crystal ball. I could just, but yeah, I think to understand my best guess anyway as to what the future of our firm will look like, is to really look at what are the core parts of our firm that have been there since the beginning. And there are some things that haven’t changed. Those are, I think three main things.

Aaron: 00:50

First of all, we really value advisers that have credentials and experience, and are very competent and qualified people.

Paul: 00:57

Sure.

Aaron: 00:58

And so as we think about our firm going forward and possibly continuing to grow, I think we’re only going to be looking for advisors that kind of fit that mold of what we’ve done.

Paul: 01:11

Educated folks.

Aaron: 01:12

Yeah. We want to see that they’re educated and that they are extremely competent.

Paul: 01:17

Absolutely.

Aaron: 01:18

The second thing is I think the team element of our firm is something that is very special. And so I think advisors that buy into that idea that they want to be part of a team, they don’t want to operate in a bubble, you know?

Paul: 01:32

Not sitting on an island by themselves trying to figure it out.

Aaron: 01:34

They value each other. I know you do, and I know I do. We value the advice and the camaraderie that we experience as part of that team.

Paul: 01:43

Sure.

Aaron: 01:44

I think it’s better for clients too when the advisor is operating as part of a team. So I could see that being something that’s a characteristic of our firm in the future.

Aaron: 01:54

And then the last thing, which I think is probably the most important, and that is that we all of us have a very strong ethical commitment to our clients. We really care about them. Our families have been in the community a long time. We want to do what’s right for people and we really care, and that’s the culture.

Aaron: 02:15

No matter how many people are working with our company or what lines of business have changed and how the industry has changed, I think those are the key components, the parts of our value proposition that will continue, be competent advisors working together as a team with their sole focus on taking care of their clients, doing what’s right for them that they can because they care.

Paul: 02:39

Excellent. Excellent. Well thanks, Aaron. That was really helpful and I think it really gives a look towards the future of what Puckett & Sturgill will be and currently is. Thanks for joining us today and watching the Ask An Advisor segment with Puckett & Sturgill Financial Group. We hope that if you have additional questions, you’ll reach out to us via the website or give us a buzz. So thanks a lot and we’ll see you next time on Ask An Advisor.

It’s Your Turn to Ask

Tax Considerations for the Working Individual Reviewing a 2018 Return – Family and Filing

December 27, 2019 Tags: Deductions, Tax returns, Taxes Jacob Sturgill

With the end of the year in sight, it’s time to take a look at your 2019 tax strategy. One of the ways that you can prepare for the upcoming tax season is to look back at your 2018 return to see how your tax strategy worked out the last time you filed.

This article is first in a series on Tax Considerations for the Working Individual. Read of the series here:

Here are some issues to keep in mind when reviewing your 2018 return:

What Deduction did You Claim?

If you claimed the standard deduction of $12,000 ($24,000 married), you may consider bunching charitable donations into one year. You may also decide to accelerate or prepay certain future expenses, like medical expenses or property tax. (Consult Form 1040, Line 9)

Are You Married?

Married couples have certain tax considerations that they should review yearly in order to make the most of their tax strategies. If any of the following apply:

You and your spouse have a large disparity in incomes
You have a number of large itemized deductions
You or your spouse have income-based student loans

You may consider filing separately to offset your tax liability. Run the numbers for both married filing jointly and married filing separately to see how your estimated tax liability is impacted.

Have You Been Divorced or Lost Your Spouse?

If it’s been a personally traumatic year, one of the last things on your mind might be your tax status. But if you have lost a spouse or been through a divorce, you need to review your filing status to ensure you’re in the correct category. (Review the top of Form 1040)

Do You Have Dependents?

If you have children and make less than $200,000 ($400,000 for couples), don’t forget to take your child tax credit. (See Form 1040, Line 12)

Are your children under age 13? Look to see whether you can claim additional deductions for child care. (Consult Form 1040, Line 12, and Schedule 3, Line 49)
Do you have dependent children in college? Are you in college?
- If your income is below $58,000 ($116,000 married), check to see if you claimed the Lifetime Learning Credit in 2018. (Look at Schedule 3, Line 50)
- If your income is below $90,000 ($180,000 married), check to see if you have previously claimed the refundable portion of the American Opportunity Tax Credit (Form 1040, Lines 17c)
Do you have non-child dependents that you can claim? In some cases, you may be able to claim a parent or another relative as a dependent and receive a Child and Dependent Care Tax Credit, as well as relevant medical expenses that you spent on that dependent.

Was There any AMT (Alternative Minimum Tax)?

If you had AMT in 2018, consider possible strategies to reduce it. These might include minimizing capital gains or maxing out retirement contributions to lower your income. You will also want to see whether you received a credit from paying AMT in 2017. (Consult forms 6251 and 8801)

Did You Have an Unexpected Outcome from Your Filing?

When you filed in 2018, did you need to pay more taxes than you expected? (Consult Form 1040, Lin 22) Or on the flip side, did you end up with a bigger return than you anticipated? (See Form 1040, Line 19) If you ended up with an unexpected outcome from your 2018 filing, you may want to look into whether this was an anomaly. Compare information from the past few years to see what might have changed.

Did You Withhold Enough in 2018?

If you failed to withhold enough taxes, you may have to pay a penalty. (See Form 1040, Line 23 and Form 2210). In the past, you would be responsible for 90% of your current tax liability, but the IRS changed this to 80% in 2018.

This article is first in a series on Tax Considerations for the Working Individual. Read of the series here:

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tax Considerations for the Retiree – Family and Filing Issues

December 23, 2019 Tags: Retirement, Tax Considerations for the Retiree, Taxes Jacob Sturgill

As tax season approaches, it’s time to take a look at your 2019 tax strategy. Thankfully, if you filed taxes in 2018, you can use your 2018 return as a sort of cheat sheet to help you get a better idea of what you may be responsible for this time around.

Whether you’re dealing with a fixed income, investment payouts, or any other unique financial situations, your status as a retiree means you have some different considerations to make than you did as a working individual. To start, you will want to take a look at your family and filing issues.

This article is first in a series on Tax Considerations for the Retiree. Read of the series here:

Did You Take the Standard Deduction?

Did you claim the standard deduction of $12,000 ($24,000 married, filing jointly) in 2018? (Consult Form 1040, Line 9) If so, you may want to consider bunching charitable contributions into one year and look into ways to accelerate certain expenses, such as your property taxes.

Are You Married?

Your marriage can have some tax benefits — though in retirement, there can be some complicated factors to filing jointly. Do any of the following apply?

You have a large disparity between your and your spouse’s incomes
You can claim large, itemized deductions
You have an income-based student loan

If you answered “yes” to one or more of these scenarios, you may wish to prepare a return as married filing jointly alongside a return as married filing separately to see whether one of these statuses provides a greater tax advantage.

Have You Been Divorced or Lost Your Spouse?

If you’ve experienced a divorce or death of a spouse, you need to review your filing status. Look at the top of Form 1040 to see whether you’re filing correctly.

If you entered into a divorce agreement in 2019, after the first of the year, alimony is not taxable for the recipient. If your agreement began before 1/1/19, alimony is deductible by the payer (Schedule 1, Line 31a) and taxable to the recipient (Schedule 1, Line 11).

Did You Have Any AMT?

If you paid AMT in 2018, you may want to consider strategies to reduce it for this tax year. Strategies like minimizing large capital gains and lowering income by maxing out retirement contributions can help. If you paid a large amount of AMT in 2017, look at Form 8801 to determine whether you received a credit for this payment.

Do You Have Certain Age or Disability Factors?

If you and/or your spouse are over age 65 and/or if you or your spouse is legally blind, you may be eligible for a deduction of $1,300 for each married taxpayer ($1,600 for each unmarried taxpayer).

Did You Have Any Tax Surprises in 2018?

If your 2018 tax responsibility was much higher or lower than you thought it was going to be, it’s important to check into what caused the change and whether that factor will impact your tax responsibility this time around. For those who experienced a higher refund, look to see whether you had a unique situation by comparing your taxable income from the past two years’ returns. On the other hand, for those who didn’t withhold enough for tax time, look at Form 2210 to review the penalty and determine your current tax liability for that amount.

These are only some of the considerations that you need to make as you review your 2018 tax return and prepare for the upcoming tax season. To learn more about tax considerations for the retiree, stay tuned for information about reporting your investment income and other issues.

This article is first in a series on Tax Considerations for the Retiree. Read of the series here:

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

How will rising healtcare costs impact my retirement planning?

December 18, 2019 Tags: healthcare, retirement budget, Retirement Planning P&S

Your retirement planning is comprised of many factors that make up the amount of money you need to save for retirement and the income streams that can help you pursue that figure. As you’re building or reviewing your financial targets, you need to consider how individual expenses will contribute to the whole.

For many retirees, one of these big numbers is the amount that they need to set aside for healthcare expenses. Let’s face it: healthcare is expensive and costs are only on the rise.

You need to be proactive in meeting the challenge of rising healthcare costs in order to avoid costly mistakes in your retirement planning. Easier said than done? Maybe not.

Today we’re going to look at the question: How will rising healthcare costs impact my retirement planning? If you’re ready to learn more about this essential component of your retirement planning, grab a cup of coffee and let’s dive in!

Assess Your Needs

As with all aspects of financial planning, you can’t adequately plan for what you need until you know what it is that you need. To plan for healthcare costs in retirement, you will work around a few factors. These include:

You and your spouse’s continuing health coverage,
Your intended length of retirement,
Your health (and your spouse’s health)
Family medical history

Obviously these factors vary from investor to investor. Your financial advisor can provide some guidance in parsing out your healthcare situation and help you to get a better idea of what your savings should look like.

Look at Your Health Coverage Options

While you should expect your healthcare costs to rise during retirement, thanks to a combination of increasing healthcare expenses and your own aging, you will not need to shoulder the entire burden of your retirement healthcare expenses.

In the United States, retirees have the option of receiving Medicare as part of their Social Security benefit. This federal health insurance is designed to help retirees offset some of their healthcare expenses, but still leaves premiums, deductibles, and out-of-pocket expenses to your budget.

In addition to applying for Medicare, you’ll want to carefully consider which Plan fits your needs the best — and you’ll want to review this information during each open enrollment period. You may also want to consider supplemental insurance options, like MediGap or private insurance, to keep your healthcare budget on track.

Understand the Balance

Your healthcare costs in retirement will probably not be evenly spaced each month, from the moment that you retire onward. Instead, you will probably experience what most retirees do: an increase in healthcare expenses the older that you get.

This makes it a little tricky to plan for retirement healthcare costs, since you won’t be feeling the pain of increased medical bills until later on. When planning your monthly income, you’ll want to find a strategy that allows you to set funds aside for a healthcare rainy day fund. Sure, you may not need it until you’re a decade or more into your retirement, but when the rainy day comes, you’ll be thanking yourself for setting the funds aside.

While the retirement healthcare question is multifaceted and there are certain unknowns that can’t be entirely accounted for, you can create a game plan that allows you to save to the best of your ability and that provides a cushion for those unseen needs that may arise. Your financial advisor can provide a wealth of knowledge and advice to help you establish a financial strategy for meeting you healthcare needs in retirement.

Want to learn more about retirement planning and the financial advising process? Check out our Ask an Advisor section to hear our CFPs answer questions from readers like you — or submit a question of your own for us to cover in a later segment!

Vetting Charities for Holiday Giving

December 13, 2019 Tags: Charitable donations, Holiday giving, RMD P&S

The holiday season is the season of giving. You already know that there are many tax-smart ways to give, whether by giving directly to family members or establishing financial resources for future generations. Another way to give this season is to support charitable organizations you believe in.

When you maximize your donation dollars, you are able to give by giving smartly. Plus, you can feel good about your decision to donate when you know where your money is going. Today we’re going to talk about what makes a charity qualified and legitimate, and how you may be able to use your IRA and required minimum distribution (RMD) to donate.

Ensure the Charity You’re Donating to is Qualified

Generally speaking, charitable giving is tax deductible. But there are two important caveats to this statement

1. The organization itself must be identifiable by IRS guidelines to be a qualified charitable organization. To determine whether charity is qualified, you can refer to the official IRS website, which outlines what qualifies an organization per section 170(c) of the Internal Revenue Code. Or use the charity look-up tool the IRS offers. The most common organizations people donate to are nonprofits with 501(c)(3) status or religious organizations, but there are many other kinds of charitable organizations that qualify for tax deductible giving.

2. The amount given will determine the deduction. You need to consider the amount of your donation when weighing tax benefits — the federal standard deduction has risen in recent years to $12,200 per individual ($24,400 for married filing jointly), thus changing your ability to itemize vs. take the standard deduction.

Vet Charities for Legitimacy

The last thing you want is to be tricked or scammed when you are trying to give to charity. If the organization meets the IRS requirements for tax-deductible giving, you should also ensure their purpose is important to you — and that they actually deliver on their stated purpose.

If they are a legitimate organization, a relatively simple investigation on the organization, their leadership, allocation of their funds, and the impact they have made on their area of purpose should yield verifiable information to better inform you. You also may find helpful online tools and forums that are designed to vet charities if you’re looking for even more information.

Another Option: Donating with IRA Funds

It’s important to note that you may have the option to give through your IRA by making a Qualified Charitable Distribution (QCD), which doubles as a way to meet your RMD if you are older than 70 ½. As of 2017, federal law states that up to $100,000 of your RMD can be given directly to charity without being taxed.

If you want to make a QCD, you will have to make sure your IRA is either a Traditional IRA, Inherited IRA (including inherited Roth IRA), SEP IRA, or SIMPLE IRA. There are other considerations, such as ensuring that you are no longer gathering contributions from employers and other limitations. You can learn more about charitable giving through IRAs here.

Ready to move forward with your holiday giving plan? At Puckett & Sturgill Financial Group, we can assist you with your charitable giving questions and help you to make sense of how they fit into your financial strategy. Contact us today to learn more about our financial planning services!

‘Tis the Season of Giving! Consider These 3 Ways that Giving Makes a Difference for Your Finances

December 6, 2019 Tags: Financial gift giving, tax strategy P&S

As the holidays approach, you may find yourself feeling generous. And if you haven’t quite caught the spirit of giving, some reasons to consider financial gifing this season include:

It might help you to organize your finances
It’s a way to teach your children and others around you to live generously
It can make you feel good and increase your happiness
You can make a tangible difference in the life of your family member or friend who receives your gift — or those helped by a charity you support.

If these reasons aren’t enough to spark your desire to give this season, you may be interested to know that that financial gifting is a possible way to reduce your taxable income and thereby pay less in taxes next year.

When you’re considering financial gifting, it’s important to note some potential implications about the different kinds of gifts you give this holiday season. Read on to learn about a few ways you might decide to give:

1. Giving Financially to Individual Family Members

Giving to family members is a great way to be generous this holiday season, especially as your children start families of their own, or your grandchildren head to college and start new jobs. According to the IRS, a gift is considered “any transfer to an individual, either directly or indirectly, where full consideration is not received in return.”

For gift giving to family members or to any other individual, gifts that do not exceed $15,000 per person, per year are not taxable as they do not exceed the annual exclusion for the calendar year. If your gift to a family member is going to exceed the annual exclusion, you will need to fill out some forms and have handy the documents that will help you complete it, like copies of appraisals or documents regarding the transfer.

Of course, these are just some of the tax implications for giving to family members or other individuals to be aware of, but there are other considerations like your own needs and desires for your ideal financial future. Perhaps for your particular financial situation, individual gift giving makes less sense than investments for grandchildren or even gifts to charitable organizations.

To keep track of large financial gifts or how money gifted today impacts tomorrow’s retirement goals, you may want to enlist the help of a professional. Your financial advisor can help you break down your financial goals, navigate any necessary paperwork, and help you to prioritize spending in the short- and long-term.

2. Investing in Your Family’s Future

When it comes to individual financial gifts, you might also consider long-term savings for children and grandchildren. Some options include:

Establishing a trust
A 529 educational account
Gifting IRA earnings or savings bonds.

Establishing a Trust

Trusts can be an ideal option for individuals who have a considerable amount of money to give or invest and want to generally maintain how the money is managed even posthumously. Establishing and putting money into a trust is relatively easy, but you have to make many decisions regarding trust management. These include:

Whether you will set up a single trust for multiple grandchildren or family members or separate trusts for individual beneficiaries
What type of trust to set up
When the funds will be released
How funds may be spent
Whether funds will be prevented from being released under certain circumstances
A trustee who will manage the assets and approve the release of funds

Taxes on trusts are another important consideration, given that things can get a little complicated when there are multiple parties involved. Your financial advisor is an ideal partner in sorting out these details and making an educated decision about gifting a trust.

Educational Savings (529 Accounts)

If education is important to you and your family and you like the idea of paying minimal taxes on your gift, a 529 account may be an option for financial gifting to a child or grandchild. Putting money aside in a 529 account ensures your beneficiary will use the money for education and allows your money to grow tax-free.

There are different kinds of plans to take advantage of, and different states mandate differently on these types of accounts, so consult your financial advisor for guidance on what kind of 529 options are ideal for your circumstances.

Bonds

Some people prefer to give the gift of an investment. Savings bonds are a popular vehicle for this type of financial gifting.

If you decide to purchase a savings bond or give one as a gift, the interest earned on it will be taxable. The listed sole owner of the bond will be responsible for paying the taxes on the interest, so if you gift a bond to a child or grandchild, you can either retain sole ownership, add them as a co-owner, or make them the sole owner.

There are some options regarding when you pay the taxes on this interest. Your financial advisor can provide you with options, as well as guidance on choosing an ideal payment option.

The Bottom Line

These are a couple options and tax implications for long-term savings for grandchildren. Conversations with your financial advisor, CPA, and the parents of your grandchildren are important ones to have. Ideally, you want to do what’s best for your own finances as well as make a positive impact on your family members’ financial futures.

3. Giving to Charitable Organizations

Another option for giving over the holiday season is charitable giving. After all, this is an important season for the non-profits and other 501(c)(3) organizations in your life. Why not give them a financial boost to put them ahead in the new year?

There are a few important details regarding how you write off charitable giving for tax purposes, which your financial advisor or CPA can help you to understand. One important thing to remember is that 2017 tax reform has increased the standard deduction, which has changed the way people are able to deduct from their taxes for their charitable giving.

You have some options for planning your charitable giving in order to make a difference to the organizations you support and your own tax bottom line. It’s important to discuss this with your financial professionals in order to get the clearest picture of how you can proceed with charitable giving this holiday season and beyond.

Make the Most of Your Financial Gifts

If you are looking for ways to give a little and improve your personal tax strategy at the same time, you have quite a few options. The choices listed here are certainly not exhaustive!

If you desire to pursue financial gifting this holiday season and aren’t quite sure where to start, our team of CFP® professionals at Puckett & Sturgill Financial Group are ready to help you find the smartest way to give. Contact us for a consultation or assessment today!

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

Ask David: What Steps can I Take Today to Impact My Retirement Plan?

December 4, 2019 Tags: Ask an Advisor P&S

It seems like there’s a day or a week or even a month that’s dedicated for some well-intentioned cause or another. Sometimes, these dedications are helpful reminders to check up on important issues. For example, did you know that October was National Financial Planning Month?

Even if you missed checking in on your retirement plans during the month of October, it’s never too late to get to work on your retirement planning! Today, we’re talking to our own David Hemler about some steps that you can take today to make a positive impact on your retirement plans for tomorrow. So grab a cup of coffee and read on to learn David’s three steps to take today!

Step One: Take Charge Today

Are you preparing for your financial future? If you’re not, then who is? It’s time to take charge of your financial life goals.

It’s not just a cliché when you hear the words, “the sooner, the better”. But some things may be too overwhelming to tackle all at once, procrastination sets in and time flies past our best intentions.

As a professional advisor, I spend a good portion of my work hours guiding folks in their journeys to define a path that will help them strive to get to a day when they will no longer have to work for money. Ahh yes, that day when we get to choose what pleasures we want to enjoy!

Can you see it? How are you going to get there?Start. Saving. It doesn’t have to be anything extreme. Start with taking just a share off the top — enough to make it hurt a wee bit. This is a good beginning. As time moves along, investors who make this choice and commit to their savings plans find the pain of discipline far outweighs the pain of regret.

Step Two: Educate Yourself on Financial Planning for Retirement

Next, consider reading a book or two written by a successful author on the subject of financial success planning. I can recommend a couple: if you email me, I’ll be happy to share a few titles with you!

The point is to get educated and get some help. Maybe you’re the DIY type and the help you need is self-help because you enjoy working toward this important effort. Or perhaps that’s not your cup of tea. In this case, find a guide to help you.

There are many well educated financial professionals all around you — probably way more than you realize. Find a trusted advisor to help you navigate the retirement planning process. There’s no shame in getting help! In fact, even professional athletes at the top of their games have coaches and guides to strengthen their efforts.

Step Three: Establish a Long-Term Plan

If you start with these simple beginning steps, you will be on your way to creating a solid retirement plan. And remember, your plan doesn’t have to be over-the-top complicated to get you where you want to go.

I’m fond of reminding myself that I don’t have to eat the whole elephant at once, but rather, one bite at a time. When it comes to retirement planning, this mentality is key. You don’t need a complete financial solution for your entire life circumstance right out the gate; although for most investors, having that long-term plan should eventually be an end-game goal.

For now though, ask yourself, “do I know how much money I’ll need saved when I choose to no longer work for my money?” Get the answers unique to you and your financial situation. A skilled financial professional can help you discern that basic financial planning answer in about fifteen minutes or so, simply by guiding you through a conversation about your views and life goals.

Want to learn and know more about retirement planning? Have another burning financial question that you’d love to see answered here? Reach out to David at 410-871-4040 or fill out a contact form today!

The Year-End Financial Review for Small Business Owners

December 2, 2019 Tags: small business, year-end financial review Jacob Sturgill

As the year winds down, you’ve probably got a lot to keep track of for your small business. Whether you’re juggling holiday orders or wrapping up big projects with end-of-year deadlines, you may not have time to think of much outside of your business to-do list.

Even if the end of the year isn’t considered the busy season for your industry, it’s important to take time for a year-end financial review to take stock of how this year’s finances will impact your brand’s activity next year.

Here’s a quick checklist of items to cover in your small business year-end financial review:

Your Books and Financial Reports

As the end of December draws near, remember that you need to wrap up your books for the year, in addition to your month-to-month reconciliations. Even if your company’s fiscal year falls outside of the calendar year’s ending, this is a good time to take a step back and look at the overall financial picture.

Your financial advisor can help you to remember which reports are most important to collect and may be able to provide a recommendation for a CPA who can help you get these in order.

Your Budget

While you’re running your numbers, it’s a good time to take a look at your budget and see where you met or exceeded expectations, as well as where you didn’t. This year’s budget is your most helpful tool in finalizing next year’s budget.

And if you simply operate without a budget or have been meaning to get a better grasp on your business’s expenses, there’s no time like the present to make plans to be more disciplined with company funds in the coming year!

Your Employees and Other Large Year-End Expenses

Depending on your industry, you may have some large year end expenses, like replacing equipment, purchasing materials to meet the holiday rush, or renewing essential licenses and permits. You may also want to provide a special bonus or holiday party for your employees.

Whatever your last minute large expenses are for the year, make sure you take the proper steps to plan for any tax benefits from these expenses, if applicable. And if you have large purchases around the corner, consider whether making these purchases during this calendar year might be a better idea for your tax situation.

Your Tax Strategy

Speaking of which, your small business tax strategy is something you need to check in on before the close of the year. You may have options for categorizing last-minute expenses or donations in a way to optimize your tax strategy going into the new year.

Your financial professional is the best person to consult regarding your tax strategy, since you may not know about certain tax obligations or deductions unique to your small business situation.

Your Financial Plan

Lastly, it’s essential that you put in work today to make 2020 a great year! How can you do that? Through careful financial planning.

While you may not be able to plan for every variable in your upcoming year, you should set some goals and develop a plan of action to pursue them. After all, you can’t know how to get where you’re going unless you have a destination.

Working with a financial advisor can help you to put your small business goals into perspective, prioritize them, and develop a plan to address them. A trusted advisor is an essential member small business owner’s team.

Are you prepared to make the most of your financial situation in 2020? Contact Jake Sturgill today to learn more about how a year-end review might provide you an advantage in the coming year.