It’s your last chance to lower your tax bill – find out some last-minute moves to save on taxes before year-end. Plus, how are your assets titled? Joe Anderson, CFP® and Alan Clopine, CPA explain why making the wrong move could cost you big time in YMYW podcast episode 90. Original publish date December 17, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.
13:52 “The market magnet has begun to pull the long dormant mutual fund investors, so domestic stock funds have seen an estimate net flows of $35.8 billion in the past four weeks (Investment Company Institute).”
14:40 “History tells us that money tends to flow near market peaks…it’s interesting how that tends to happen.”
15:12 “Now is a really good time to take a look at your overall portfolio, and look at a rebalance strategy. There are a lot of people who set it and forget it, and then the other side of the spectrum is people who day-trade the heck out of their 401(k) plans.”
20:44 “I’ve got five ways to lower your tax bill now, this is from Nerd Wallet and came out on December 14…when it comes to tax planning, a majority of strategies need to be accomplished by December 31st for that tax year.”
23:30 “There’s a special account called a donor advised fund, where you can set up the account, put your own money into it, and that money will ultimately go to charity, not necessarily this year. Here’s the key – the year that you put the money into the account is the year you get the tax deduction.”
24:15 “It’s a great way to take a deduction when your tax bill is higher.”
27:26 “Offset your capital gains with losses.”
28:21 “When you tax-loss harvest, here’s how you do it properly: you sell the position that’s down to create that loss, and then you buy something that’s very similar so you’re still in the market because the market because the market may come zooming right back.”
29:37 “It’s important to realize how things are titled when it comes to your assets, especially your retirement assets.”
29:55 “A lot of you have named your living trust as the beneficiary of that retirement account…there are pros and cons to this. There’s so much misinformation on what people should do. I would say the majority of you who are married should not name your trust the beneficiary of your retirement account unless a) it’s a second marriage and you want to preserve those assets if you had kids from a previous marriage; b) second of all, if you’re not married and have children and those children might not be able to handle the type of wealth that is inside your retirement account.”
34:59 “If I just named my spouse as the beneficiary, she could keep it in my name and take a required distribution if she wanted to, or she could roll it into her own and avoid any type of income coming out of it and being taxed on it and let it grow tax-deferred until her retirement date.”
36:54 “A retirement account is completely different than say your brokerage account or checking or savings account. A retirement account has to have a required distribution from it…so be careful with how you name your beneficiaries.”
37:12 “The death of the stretch IRA could happen as early as next year.”
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IMPORTANT DISCLOSURES:
Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are not intended as investment advice or to predict future performance.
• Past performance does not guarantee future results.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. As rules and regulations change, content may become outdated.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.
AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.
CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.
