Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Nonprofits may see a decline in revenue this year as more taxpayers are expected to opt for a standard deduction, according to this article on The Aspen Times. This has increased under the new tax law, according to an expert. "It's estimated that as few as 5% of taxpayers nationwide will continue to itemize their deductions," the expert says. "If 95% of taxpayers do not itemize, then they will not be able to claim the charitable deduction and benefit from this tax incentive."
Clients with 401(k)s are advised to make aftertax contributions if their plan offers a Roth feature, according to CNBC. A Roth 401(k) gives tax flexibility when retirees start drawing income from their accounts, as the withdrawals will no longer be taxed, unlike the distributions from traditional retirement accounts. "Otherwise, your tax bracket is at the whims of your lifestyle, and how much you withdraw," an expert says.
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Prices and guarantees will improve for clients as robo-advisor tools continue to develop in the annuity industry; Plus, these two moves can ensure your clients will retire no matter what happens with the market.
October 28 -
Robos can give ETF providers brand new channels to distribute products and access new investors, says Dodd Kittsley, head of ETF strategy and national accounts at Deutsche Asset & Wealth Management.
November 25 -
Robo advisor seeks to add a piece of the $4.6 trillion market to its business.
September 11
The IRS has issued the next year's parameters of the tax code with a new method for making inflation adjustments, according to this article on The Wall Street Journal. The changes could mean a reduction in tax cuts under the new law. “When you sit down and figure out your taxes, I don’t think you’re going to notice this amongst all the other noise,” says Jared Bernstein, an economist with the Center on Budget and Policy Priorities.
Despite the changes under the new law that aimed to simplify the tax code, married couples with equal incomes still face a bigger tax bill than they would have if they had filed separately, according to this article on Motley Fool. Based on the IRS's 2018 tax brackets, the taxable income amounts for single taxpayers and joint filers are nearly the same. Couples earning $150,000 annually will face the marginal tax rate of 24%, the same rate they would get if they remained unmarried and filed separate returns.
The uncertain tax and legislative environment means that year-end tax planning is more important than usual. To help clients and businesses prepare for filing season, here are helpful tips.
Looking for ways to maximize retirement income? Boomers should consider relocating to states with no state income taxes, according to Fox Business. These states include Alaska, Florida, Nevada and South Dakota. Retirees in Texas, Washington and Wyoming also don't owe state income taxes on retirement income.
