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Are you ready for the 2019 tax season? Tax Strategy Scan

Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.

Don't wait to get ready for the 2019 tax season
Clients should not wait until the year's end to start planning for the 2019 tax season, according to this article on Motley Fool. This is especially true if they have experienced or will experience a major life-altering event, such as marriage, divorce or a new baby. They are advised to organize their financial documents to make it easier for them to prepare the documentation when claiming certain tax breaks. Selling depreciated securities is also recommended to harvest losses that they can use to offset sizeable gains from the sale of stocks that increased in value.

A portion of a client’s Social Security benefits may be subject to federal income tax depending on their income levels.
U.S. Department of the Treasury Internal Revenue Service (IRS) 1040 Individual Income Tax forms for the 2016 tax year are arranged for a photograph in Tiskilwa, Illinois, U.S., on Tuesday, March 28, 2017. Due to the Emancipation day holiday, this year's income taxes will need to be filed by April 18 instead of April 15. Photographer: Daniel Acker/Bloomberg

529 plans could be used to pay off student loans in new tax legislation
The tax proposal unveiled by the House Ways and Means Committee would allow taxpayers to pay home schooling, apprenticeship fees and student loan debt using funds from their tax-advantaged 529 college savings plans, according to this article on CNBC. "Anything that provides families with more flexibility in how they use 529 plans would be beneficial," an expert says.

December 9-12, 2019, Fontainebleau Miami Beach, Miami | A neutral zone of sorts allowing the profession’s leadership to convene and join in the conversation, engaging dialogue and civilized debate, all with the objective of elevating the role of the independent investment advisor.
December 5-6, 2019 | San Francisco, CA The digital transformation of the wealth management industry is happening quickly. The industry’s largest players are swiftly adapting to meet ever-increasing customer expectations, and the rest of the field striving to keep pace. Behind the scenes, many firms are increasing technology investments and increasing headcount in an effort to drive growth, but margins remain under pressure. In|Vest West will explore all the dynamics at play—from front to back office—and the technologies that are shaping the future of the firm.
CEO, 280 CapMarkets
10h ago

Factor taxes when making Social Security decisions
Using "break-even" calculators to determine the optimal age to claim Social Security may not be a good move, as there are other factors to consider before making the decision, writes an expert from The Mercury News. For example, older workers who collect retirement benefits early can expect a portion of the benefits to be subject to federal and state income taxes, reducing the "take-home" amount in the process, explains the expert. "In that case, the reward for waiting could come sooner than the standard calculations indicate."

Tax incentives for businesses that invest in underserved areas
Clients should take advantage of the Opportunity Zone program, which provides substantial federal income tax incentives for those who invest in underserved communities, according to this article from The Las Vegas Sun. Clients in these zones can expect deferral of tax on 2018 gains until 2026, a 15% reduction on the gains when taxed in 2026 and a tax-free growth for investments held for at least 10 years. “A lot of investors will be agnostic and they’re just going to invest in a macro sense for the best deal they think will generate the most appreciation over a 10-year period,” an expert says. "The challenge is finding these opportunities."

A quick look inside the proposed Tax Cuts and Jobs Act.
November 3

Opinion: Avoid making these 3 huge tax mistakes ahead of a client’s retirement
Seniors are likely to pay unnecessary taxes in retirement if they fail to avoid making financial mistakes before they retire, according to this article on MarketWatch. To improve their future prospects, clients should not assume that they will move to a lower tax bracket in retirement, and they should avoid ending up with a large required minimum distribution from their traditional IRAs and 401(k)s. Clients are advised to max out contributions to their Roth IRAs and Roth 401(k) while they still can, as distributions from these accounts will be excluded from their taxable income.

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