Donating to Hurricane Harvey relief efforts: Tax Strategy Scan

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

Donating to Hurricane Harvey relief efforts
Investors who want to help the victims of Hurricane Harvey in Houston have the option of giving appreciated stock to a charitable organization helping communities in affected areas, according to this article on Kiplinger. Donating securities that appreciated in value allows investors to claim a tax deduction on the contribution and avoid capital gains taxes if they opt to sell the shares. They can also make the donation through a donor-advised fund.

Credit risk or opportunity? Analyzing munis today
After the buzz about tax reform waned, the tax-exempt municipal bond market continued to post robust performance, Pimco analysts at Barron's write. However, the road ahead looks uptight for potential credit flare-ups amid a state budget season with poor tax collections, uncertainty over federal policy and state legislators not passing state budgets before the new fiscal year, the experts warn. "With potential turbulence looming, we believe active management and credit selection will be key to unlocking opportunities and avoiding credit pitfalls amid any resulting volatility or credit deterioration."

IRA balances are up, and so are divorces, particularly among baby boomers. These so-called gray divorces have roughly doubled over the past 25 years, according to the Pew Research Center.
August 31
6 Min Read
Clients ready to quit the workforce in advance need to understand the impact of doing so on their Social Security benefits, Michael Kitces writes.
August 29
16 Min Read
The agency will allow some Texas residents to file certain individual and business tax returns and make some tax payments as late as Jan. 31.
August 28
2 Min Read

The GOP is looking for ways to pay for tax cuts. Your 401(k) may bear the cost
Workers would have to pay taxes on their contributions to an employer's sponsored 401(k) plan under the Trump administration's latest tax proposal, according to this Washington Post report. However, experts oppose the move as 401(k) plan tax deferrals are a key factor in encouraging workers to save for retirement. The Investment Company Institute “strongly supports preserving the current system of tax deferral, which has encouraged millions of Americans to save for retirement,” a spokesperson said.

IRS makes it easier for Harvey victims to tap 401(k) money for rebuilding
The IRS has eased the rules on 401(k) loans and hardship withdrawals for participants affected by Hurricane Harvey, according to this article from CNBC. For example, workers who made hardship distributions may continue contributing to the plan. Participants in 401(k)s who borrow or withdraw from the plan will still face income tax on the distribution and the 10% penalty. Hurricane Harvey victims with 401(k) plans should make the distributions between Aug. 23 and Jan. 31 to qualify for the relief.

Tax strategies for the year ahead
Fifteen tax planning tips from analysts and industry experts advisers may consider in 2017.

How would Trump’s tax proposals affect you?
Wealthy Americans stand to gain the most from tax changes pushed by the Trump administration, according to Bankrate. An analysis by the Institute on Taxation and Policy has found that 61% of the tax cuts next year would benefit the wealthiest 1% of American households. The GOP's tax proposals could mean $400 less in income taxes for the bottom 60% of American workers.

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Tax planning Income taxes Donor-advised funds Capital gains taxes Munis 401(k) Donald Trump ICI IRS