Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.
Compared with men, women have a lot of catching up to do because they receive lower pay and have longer life expectancies, according to MarketWatch. As such, women should start building their nest egg as early as they can, even with a small amount, and increase their savings rate over the years. They should also be decisive when making investment decisions, such as converting some of their traditional IRA assets into a Roth account, which offers tax advantages after they retire. An online calculator can also help savers focus on investing goals and get them on track for retirement.
Investors are increasingly attracted to bitcoin, attracted by the digital currency’s growing potential for real-world usage and its scarcity, among other factors, according to this Motley Fool article. However, the IRS is reportedly moving to obtain customers' records from Coinbase, the most popular bitcoin exchange, as the regulatory tax body is under the suspicion that many bitcoin investors failed to make an accurate disclosure of their income.
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Eligible taxpayers can now qualify for a waiver of the 60-day time limit and avoid possible taxes and penalties on early distributions, if they meet certain requirements.
August 25 -
Either a Clinton or Trump presidency could potentially bring changes in estate tax laws, so start preparing now.
August 29 -
The IRS has proposed regulations that could reduce or eliminate valuation discounts for the wealthy by the end of the year.
August 22
Although the stock market remains bullish, clients should invest for the long term and stick to their investment strategy, even amid declines, according to this Kiplinger article. One way to build a steady investing plan and not worry about a possible market fumbles is to use a strategy that focuses on dividends and allows clients to reinvest these earnings. Those who intend to use the dividend strategy may want to discuss the option with their adviser, including the tax consequences.
Employers should have an accountable plan for reimbursing their employees' business expenses, according to this article on Greater Wilmington Business Journal. Under this plan, reimbursements will not be considered part of workers' wage income and reimbursed expenses will not be subject to employment taxes. To make their expense reimbursement plan an accountable plan, employers should ensure the expenses are business-related, that the employees make the appropriate documentation of these expenses, and that any excess payments made by the employer are returned or it will be considered a taxable income received by the employees.
Fifteen tax planning tips from analysts and industry experts advisers may consider in 2017.
ETFs are beating actively managed mutual funds this year. Investors put more than $500 million into the products in 2016, according to Morningstar, and the trend continues this year as well. That's because ETFs are known to have lower tax-related costs compared with mutual funds, helping investors save on costs especially if they hold the funds in taxable accounts. Clients who intend to invest in ETFs are advised to make their choices carefully, as some of the funds can be expensive and may not be tax-efficient.
