Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
The new tax law makes charitable tax deductions less valuable by doubling the standard deduction, however there are ways clients can continue their philanthropic work and reduce their tax bill in the process, according to Kiplinger. One strategy is to bunch their years' worth of donations in one using a donor-advised fund. Clients can claim the tax deduction in the year they transfer the assets to the fund, but may defer the donations even after that year until they have selected a charity.
Not all taxpayers can expect an increase in take-home pay as a result of the new tax law, according to this article from Bloomberg. For example, a childless couple may see a decrease in their tax liability because of lowered rates, but they will not qualify for the higher child tax credit and get the deductions they claimed in their previous returns. “The tax revamp eliminated personal exemptions, so the new W-4 must make distinctions between children under the age of 17, who are eligible for an increased $2,000 tax credit, and other dependents who only get a $500 credit,” according to the article.
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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
One way for clients to minimize their tax burden is to direct their investments to tax-favored accounts, according to this article on Motley Fool. They should also consider the tax-related consequences of their decisions on their investments. For example, they should consider selling securities only after a year to get the lower long-term capital gains rates instead of ordinary income tax rates. They may also boost their retirement contributions in the years they see an increase in their taxable income.
Clients are entitled to tax deductions for expenses related to homeownership, and the savings can be substantial, according to this article on Realtor.com. For example, they can deduct all expenses incurred when selling a house, as well as costs of home repair and improvement works. Property taxes, mortgage interest payments and moving expenses are also deductible and can provide sizeable savings at tax time.
Here's a look at the 10 housing markets with the biggest gap between growth in home prices and wages that could indicate a housing bubble is forming.
Unlike employees who have access to a 401(k) plan, freelancers need to set up a traditional or Roth IRA to secure their golden years, according to U.S. News & World Report. These accounts have the same tax breaks as those with the 401(k), and clients can contribute up to $5,500 this year — $6,500 for those aged 50 and above. Traditional IRA contributions are made on a tax-deferred basis, while a Roth IRA is funded with aftertax dollars in exchange for tax-free distributions in retirement.
