Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
The new tax law makes muni bonds a very attractive option for clients, particularly those who face substantial state and local taxes, according to this article on The New York Times. That's because munis offer tax-free investment income that can offset the losses from the lower limits of state and local tax deductions, and other tax changes, under the new law. “The economic backdrop for 2018 could make municipal bonds one of the better slices of the fixed-income market,” according the article. “Municipal bonds are less sensitive to interest rate changes than, say, Treasury bonds, whose yields have been rising as Federal Reserve interest rate policy shifts, and with glimmers of inflation getting off the floor.”
Clients should remain fixed on their retirement plan amid the changes under the new tax law, writes a CFP at Kiplinger. Some of the time-tested strategies can still be used to help improve their retirement prospects, the expert explains. For example, clients should max out tax-deductible contributions and consider contributing to a Roth or HSA. They should also determine their tax liability on Social Security benefits and know how they can manage their tax bracket to minimize the bill.
Clients with IRAs should avoid making last-minute contributions as often as possible, according to Morningstar. That's because it will give their savings less time for growth, hurting their investments' long-term performance. The article also identifies 10 missteps that IRA investors should avoid in case they make last-minute contributions. One of these mistakes is not making the most of the tax-saving opportunities that an IRA provides.
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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
Clients owe taxes on gains from selling bitcoin and other cryptocurrency at a profit, according to this article on Motley Fool. Spending bitcoin can also trigger a tax bill if the cryptocurrency appreciated in value. The IRS classifies all cryptocurrencies as capital assets, like stocks and bonds. This is the same tax classification as things like stocks, bonds, and gold. “If you buy a capital asset at one price, and sell it for a higher price, the profit you earn is taxable,” according to the article. “The same applies if you exchange it for goods or services (spend it) at a higher valuation than you paid.”
It’s been month after month of record-breaking, confounding growth for the cryptocurrency, accompanied by regular warnings from banks about bubble speculation.
Paying off a student loan debt enables taxpayers to claim a tax deduction that can help lower their tax burden, according to this article from Yahoo Finance. To qualify for the tax break, clients should have paid up to $2,500 in student loan interest payments. “The student loan tax deduction is a great deduction, but you only get to claim it for interest you actually paid throughout the year,” a CFP says.
