Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
The federal government has released what it is deeming the final rules for its revival of so-called Health Reimbursement Arrangements, according to this article on The Wall Street Journal. Under the new rules, small employers can offer their workers tax-free dollars to buy health coverage instead of sponsoring a traditional group-health plan. Critics of the plan warn that the increase in individual policy buyers could result in higher premiums, more companies could shift to defined contribution health coverage and the eligibility of lower-paid workers for premium tax credits and other benefits could be problematic.
The House Ways and Means Committee approved a number of bills that provide tax breaks to a variety of select industries and constituencies and increase the earned-income tax credits for couples without children, according to this article on Bloomberg. One of the bills is intended to boost the refundability of child tax credits for low-income parents. Other bills repeal a provision in the new law that imposed a tax on fringe benefits for non-profits and provide retroactive benefits to same-sex married couples. “The wealthiest members of our society are benefiting handsomely from economic growth — but many of the other families find themselves stuck in place or slipping behind,” says Committee Chairman Richard Neal, D-Mass.
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It’s not just clients in high-tax states buying up muni bonds.
March 14 -
Taxpayers won’t get big federal write-off above state credit.
August 24 -
Salt Financial plans to spend as much as $50,000 to woo buyers into its new low-volatility stock fund.
March 13
To reduce their tax bill this year, clients should consider contributing the maximum amount to their retirement plans, according to this article on Yahoo Finance. One option for clients, according to the article, is to sell depreciated investments and use the losses to offset taxable gains. Another is to make deductible contributions to a flexible spending account or a health savings plan.
High-income taxpayers stand to benefit from a move to scrap the cap on state and local tax deductions, according to this article from Fox Business. The repeal could reduce tax liabilities for some 13.1 million Americans, a report from the Joint Committee on Taxation finds. “Approximately 99% of the decrease in tax liability accrues to taxpayers with $100,000 or more of economic income,” researchers wrote.
The average expense ratio among the top-performers is 40 basis points higher than the average.
Business owners who are considering to offer a student loan repayment benefit to lure workers are advised to take the proper precautions, according to this article on CNBC. For one, employers do not get a tax deduction for providing the benefit, and workers pay income taxes for the perk. This could change, as lawmakers introduced a bill that would make the student loan assistance tax-free up to a certain amount.
