Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Minnesota, Connecticut, Kansas, Vermont and Nebraska are among the 10 states that impose the highest taxes to retirees, according to Kiplinger. Seniors in New Mexico, Utah, Maryland, Indiana and Wisconsin also pay higher state taxes than those in other states. The analysis from Kiplinger ranks the states based on their state income tax, state and local sales tax and property tax, among others.
“Where you live in retirement matters just as much to your tax bill as what you have,” said Kiplinger Senior Editor Sandra Block. “Retirees and near-retirees can use Kiplinger’s Retiree Tax Map to plan ahead and determine which locations fit best based on their sources of income, spending habits and value of their estate.”
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Our exclusive interactive infographic reveals some interesting trends on the top 10 new firms and their locations.
August 22 -
The Northeast prevails, but there's a surprise in the rankings revealed by this interactive infographic.
August 10 -
Financial Planning’s 6th annual RIA Leaders ranking revealed a startling trend.
January 8
A young couple can still save for retirement despite their many financial obligations, according to Morningstar. Couple may contribute to a 529 college savings plan for their children's college education, as the plan provides tax-free investment growth and withdrawals for qualified expenses, an advisor says. These clients should also consider directing most of their retirement savings to accounts such as SEP-IRAs and 401(k) plans to make the most of the tax benefits.
Advisors with clients opting to stay in more expensive states need to be prepared to help them with those costs.
Investors who intend to make charitable donations this year should consider giving away appreciated securities to their favorite charity, according to this article on the Business Journals. This strategy will enable those clients to avoid capital gains taxes if they sell the shares. Moreover, the charitable tax deduction could be more valuable this year than in the future when income and capital gains tax rates would be reduced as part of tax reform.
Bitcoin investors should account for the tax consequences of a windfall, according to this Fortune article. “A lot of people will assume the value is a capital gain and can pay when trade it out,” an expert says. “But doing that and not paying income tax now could bite you if the IRS treats this as ordinary income. Paying at distribution is the safest route.”
Despite the looming tax reform, clients should plan for their investments under the existing taxation rules, according to the Street. Some of the best strategies include contributing the maximum amount to their tax-sheltered savings vehicles and doing tax-loss harvesting. These cleints should also adjust their tax withholding if necessary and take the mandatory distributions from their tax-deferred retirement accounts when they reach the age of 70 1/2.
