Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
As the Trump administration considers changes to the tax code, there are moves clients may consider to place themselves in better position for minimizing the impact, according to this Wall Street Journal article. For example, rich taxpayers may want to make charitable donations and wait until next year to realize income. They should also have an estate plan and may want to consider launching their own business.
Pre-retirees are advised to keep their dividend-paying stocks, as giving up their holdings for fear of paying hefty taxes means ignoring part of the markets, a Motley Fool expert says. "If you're going to invest in dividend-paying stocks and you are also going to invest in non-payers, ideally keep the dividend payers in your IRA and 401(k)," the expert says. "Use your regular, taxable brokerage for the non-payers, but don't not invest in a good stock just because it pays a dividend and you have to have it in a taxable brokerage account."
If your clients pay the alternative minimum tax, these funds can help lower their tax liability.
Young workers who switch jobs more often than necessary may be putting their retirement security in jeopardy, as they may not stay long enough to be eligible to participate in the employer's 401(k) plan, according to USA Today. Clients would also lose the employer's match if they fail to meet their plan's vesting period. Those who have assets in their former employer's 401(k) plan may want to roll over the savings into an IRA or their new employer's 401(k) plan to avoid taxes and possibly a penalty.
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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
Homeowners are exempted from paying taxes on up to $250,000 — $500,000 for couples — in capital gains from selling their home if they made the property their primary residency for the two of the last five years, prior to the sale, according to this Los Angeles Times article. Those who fail to meet this requirement may still receive partial exemption if they comply with other requirements, such as a change in employment and an illness.
Investors can take a distribution from their Roth IRAs even if the account exists for less than five years, according to this article on MarketWatch. However, the earnings withdrawn before the account turns five years old or before they reach 59 1/2 could be subject to tax and a penalty. For example, a 58-year-old client will face no tax and penalty if withdrawals are made in the investment earnings in their Roth IRA when they turn 63.
