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28Mar
More Tax Tidbits
Taxes

If you or anyone you know suffered losses from Hurricanes Harvey or Irma, check out Rev. Proc. 1018-09 for guidelines regarding the acceptable amount of loss you can take.  The $10,000 cap for deducting state and local income taxes in 2018 is causing a flurry of activity. Many states are working to create ways around the cap.

Here is a provision in the new law getting very little “press”. I think it is very important and want to be sure you understand it.  Under previous law, inflation was measured by the consumer price index for all urban consumers. This is called CPI-U.

This is being replaced with Chained CPI.

Here are the differences:

  • CPI-U measures the cost of goods and services consumed by a “typical urban household”.
  • Chained CPI assumes that if a particular good or service becomes too expensive, consumers will seek a less expensive alternative.

The result is that Chained CPI grows more slowly than CPI-U.   This means that the eligibility for certain inflation-linked deductions and credits will grow more slowly in the future.

Interesting!

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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30Jan
Do You Know the Real Impact of the New Tax Reform?
Economy

While many of us are enjoying significant gains in investment portfolios, partly due to tax reform law, there is more to the story. Sadly, is seems, that once again a decision was made to create a positive short-term impact with little to no regard for the long-term impact,

The Congressional Budget Office estimates the income tax cuts will boost the current federal deficit by $1.5 trillion over the next ten years. The current national debt already tops $20 trillion. It is 74% of the nation’s gross domestic product (GDP)!

The 2018 federal budget includes interest payments on the debt of $332 billion! Now add into the mix that the new federal reserve chair, Jerome Rhoads, has already stated there will probably be three interest rate increases in 2018 and the $332 billion escalated even higher.

Think about this legislation in terms of the financial future for our children/grandchildren/loved ones under the age of 50. Couple this with the uncertainty of Social Security, the ever-increasing cost in health care and higher education; it seems we are creating a future financial tsunami.

I believe that the combination of the worldwide stock performance along with new legislation which increases debt provides an opportunity for many of us to consider doing something for those we love most in the world.

Would those of us who were fortunate to be invested in equities in 2017 think about creating some financial security for others? Would we be willing to share a small piece of our abundance to create a brighter and more secure future for others?

If this is something you would like to know more about, please contact me. Let’s share a conversation in which we create new meaning and purpose for some of your money as we celebrate new-found abundance.

(The source for this information is the editorial opinion in the January 8-12, 2018 issue of Investment News.)

 

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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07Nov
Vital Information for Hurricane Victims
Economy

I am hopeful that the information in this blog will be helpful to anyone who sustained damage from Hurricanes Harvey, Irma and/or Maria.  We want you to know that Resonate stands ready to serve as a resource for you.While we are not tax advisers, the information below is a matter of public record.  We are simply committed to offering timely information for you.

Hurricane victims are entitled to take casualty losses even if they do not itemize.

Uninsured personal losses in excess of $500 may be deducted without regard to the “10%-of-AGI ” offset.

If anyone lost tax records, they can use the free “Get Transcript” online tool, which prints a summary of key tax information.  Of course, any Resonate clients using the offered online services of the RESLink Vault and/or Everplans would already have these records stored electronically for easy access.

If actual returns are desired, send a written request to the IRS by using Form 4506.

To expedite a reply, in red ink at the top of the form write the name of the hurricane that impacted you.

For our philanthropically motivated clients, the 50% of AGI limitation is suspended for cash donations to qualified charities serving hurricane victims.

Please contact a tax professional for additional information prior to pursuing any idea contemplated herein.

We hope this information is of value.  Please contact us with any questions.  We are here to serve.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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18Jul
IRS on Your Mind? – Here Is What NOT To Try!
Taxes

The subject of taxation is not normally a welcomed topic – here are some “fun” court cases provided by Kiplinger’s.

“A Little Peace and Quiet”

A busy tax preparer ran her business from her home.  During tax season, she felt so harassed from clients calling her at all hours of the day and night that she occasionally booked a room at a local hotel for some peace and quiet.  On her own return, she deducted the cost of this rest and relaxation as a business expense.  Unfortunately for her, the Tax Court ruled that the cost of her good night’s sleep was a nondeductible personal expense.

 

“Billing Mommy”

A wife was sent to jail for killing her husband.  Although she was named as the primary beneficiary of his 401(k) plan, state law barred her from receiving any of the funds because of her crime.  The account was paid to their son instead as the secondary beneficiary.  He claimed that his mother should be taxed on the payout as the intended beneficiary.  An Appeals Court gave him an A for effort but an F in taxation, ruling that he owes tax on the distribution.

 

“Wrecking a Rental Car”

An airline employee needed to get to New Orleans but was stranded by heavy fog.  He worked out a great deal with a rental car company where he paid nothing for a car that the company needed driven to New Orleans.  Unfortunately, he wrecked the auto in Mississippi and had to pay for the damages.  He tried to deduct the payment as a casualty loss, but the Tax Court denied his write-off because he wasn’t the owner of the vehicle.

Now here’s a little good news:

Kiplinger’s recently a report on “The LEAST Tax Friendly States in the U.S. for 2016”.

The good news is that Ohio, Kentucky, Florida, and Indiana are NOT on the list.

Here are the factors that were considered to create the list: income, property, gas and sales tax.

In order from the LEAST tax friendly, here are the top states. (Before reading further, it might be fun for you to see how many of them you could guess.)….  California, Hawaii, Connecticut, New York, New Jersey, Minnesota, Maine, Vermont, Illinois, and Rhode Island!

From our Blogs page, simply search for “tax” to find additional articles of interest.

Please note that, while we are not accountants and cannot provide tax advice, we do work cooperatively with very qualified accountants.  The information that we will share is available to the general public and should not be construed as giving income tax advice.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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09Mar
Tax Reform 2017
Taxes

Click Here for an interesting article posted by CCH Tax News.

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17Jan
Expect These Campaign Promised to Be Kept
Economy

In my previous blog, I shared which campaign promises are expected to be broken.   This blog covers the ones expected to be met.

(Source: The Kiplinger Letter November 11, 2016.)
  1. Domestic oil, gas, and coal production will be more in favor. Drilling in new regions as well as offshore will be favored.
  2. He will push hard for more spending on infrastructure.
  3. Trump will try to overhaul financial regulations in order to boost bank lending. (Dodd-Frank is at risk.)
  4. The Trump isolationist stance will force European nations to spend more on their own defense and security needs.
  5. Trump is likely to rip up the Iran nuclear deal and issue new sanctions.


Barbara A. Culver

CFP®, ChFC®, CLU, AEP®
Resonate, Inc.

(513) 605-2500

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04Oct
Resonate’s Enhanced Services
Intergenerational Planning

Richness of Life

 

 

As a natural result of our clients’ busy lives, it is becoming increasingly clear that planning to meet their life and financial goals is rapidly becoming more complex.

Therefore, to act on our dedication and commitment to our clients, I am pleased to share that we have enhanced our services to include the following:

  1. Tax strategies designed to optimized the tax efficiency of a retirement portfolio both current and in the future.
  2. An annual Medicare check-up.  Whether you are currently covered with Medicare or you know someone who is, here are items that need to be updated each year:
  • A change in prescription medications;
  • Gradual increases in the Medicare gap filler or Part D premiums;
  • If a current carrier has discontinued the Medicare Part C or D plan;
  • A change in legal name;
  • A change of residence.
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05Jul
Tax Changes in 2016
Taxes

2016 ushered in some interesting tax changes.

I will summarize some of the key changes in this blog.

Social Security: There is no hike in the 2016 Social Security wage base.  It remains at $119,500.

The earnings test also did not change.  If, at any time in 2016, you are 66 or older, you may earn $41,880 and not have to repay any Social Security benefit.  (There is no earnings cap once a beneficiary turns 66.)

Any one ages 62-65 can earn up to $15,720 and keep their full Social Security benefits.

Medicare: Most people will pay $104.90 for Medicare Part B.

For those in the upper income brackets, the combined Part B and D premiums plus surcharges can be as high as $340.90 a month.

Health Savings Accounts: The annual cap on deductible contributions to HSA’s increases to $6750 in 2016.

The limits for deducting long term care premiums per person are:

Under age 40: $390
41 to 50: $730
51 to 60: $1460
61 to 70: $3900
70 and older: $4870

The estate and gift tax exemption for 2016 increases to $5,450,000 and the top tax rate remains at 40%.

There is significant new legislation that applies to executors of taxable estates.  Executors are now required to report to the IRS and heirs the basis of inherited assets within 30 days of filing the IRS estate tax form 706.

Please know that Resonate can definitely assist providing cost basis information and works cooperatively with your other advisors toward creating best results for you and your loved ones.

The source for this information is the April 2016 Kiplinger Tax Letter.

Please be sure to meet with your tax advisor to see how this information applies to you.  The let’s coordinate his or her advice with that of your Resonate team to be sure you are using all tax laws to your benefit.

This is especially important for anyone interested in legacy planning.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500
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