Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Taxpayers can still claim above-the-line tax deductions under the new tax law, which doubles the standard deduction and reduces the value of itemized deductions, writes Morningstar's Christine Benz. "[R]egardless of whether they itemize their deductions or claim a standard deduction, taxpayers will still be able to deduct above-the-line outlays like their IRA contributions,” the expert writes. "True, there are some tweaks to what's deductible above the line starting with the 2018 tax year, but much is staying the same."
Getting married is one of the life-altering events that can have a big impact on a client’s tax situation, according to this Motley Fool article. A home purchase can also lead to property taxes, maintenance and other costs, but when acquired through mortgage, the buyer qualifies for the tax deduction for mortgage interest payment. Raising a baby can be costly for parents, but having one entitles them to a child tax credit.
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Advisor Group set a record for its recruiting in 2017, and Securities America announced more than a dozen fourth-quarter grabs.
January 25 -
Despite questions about the hastily cobbled legislation, there's some consensus as to what advisors and their clients can do now to avoid unpleasant surprises.
January 29 -
The drastic changes are shaking up the status quo of estate planning. Here’s how financial planners need to change their approach.
January 3
Younger retirement savers will need a bigger nest egg to secure their retirement than their older counterparts, according to this article from Kiplinger. A CFP says clients will lose 25% to 35% of their savings in a tax-deferred retirement account as opposed to a taxable account. Investing in an after-tax investment account like a Roth is recommended to have greater flexibility when drawing from their portfolio to lessen the tax bite.
Alaska, Wyoming and Delaware top the list of states where retirees pay the least taxes, CNBC reports. These states impose no state taxes on Social Security and have low or no income taxes, according to a study by personal finance website GOBankingRates. "If you don't have income tax and you don't tax Social Security, you're going to be a great destination for retirees, even if you didn't make the top five," an analyst says.
The weird, the oddball and the most far fetched tax deductions clients have tried to take on their returns.
Taxpayers who received pass-through income from sole proprietorships, partnerships and other similar businesses are entitled to a tax deduction of up to 20% of these earnings under the new law, an expert on Crain's Cleveland Business writes. "This will be very welcome relief for many business owners who will see the top effective federal tax rate on their business income drop from 39.6% to 29.6%," the expert writes. "However, the benefit of the new deduction will be out of reach for many service providers because of restrictions placed on 'specified service trades and businesses.'"
