Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
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.
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."
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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 -
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 -
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
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.
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.
Fifteen tax planning tips from analysts and industry experts advisers may consider in 2017.
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.
