fbpx

Review Category : Tax Management

Congress Just Passed the Biggest Bill in a Decade – The SECURE Act: 7 Things You Need to Know

On December 19th, the Senate passed the most sweeping retirement bill since the Pension Protection Act of 2006. The SECURE Act, whose progress had stalled until lawmakers tacked it onto a spending bill to keep the country running, aims to make saving easier amongst a bevy of changing rules. The House already passed the legislation, and President Donald Trump is expected to sign the bill into law. So, how does that impact you, your money, and how you will be able to save money for the future?  Does it mean you will pay more taxes?  Here are seven things you need to know about the Secure Act. (some excerpts are from Yahoo Finance) SECURE Act #1:  RMD’s Are Changing Starting January 1, 2020, the new bill pushes the age at which you need to start withdrawing money from your traditional retirement accounts from age 70½ to age 72. These required minimum distributions, as they’re called, are Uncle Sam’s way of ...

Read More →

Should More Companies Offer a Holiday Bonus?

We know that the holiday season is coming down the home stretch, but there have been some amazing stories of companies whose generosity has gone above and beyond the call of duty.  Two out of three companies say they will give some sort of holiday bonus, but St. John Properties in Maryland surprised their employees beyond belief with handing out $10,000,000 in holiday bonuses https://bit.ly/36B7pfL. The bonuses were handed out based upon your length of service with the company. So, even though the average employee bonus was $50,000, the lowest bonus was $100 and one employee who worked for the company for 44 years received a $270,000 bonus?  anta, do you hear us calling you? The news continued over the past week with a giant insurance company called the Integrity Marketing Group who paid out a $50,000,000 bonus to its some 7,500 employees, but their bonuses were skewed to the overall performance of the individuals rather than tenure or the ...

Read More →

Know What You Own and What is a Bad Financial Product

As an advisor pre/post- the 2008 financial crisis and throughout subsequent periods of market volatility (such as 1994, wars, terrorist events, Brexit, you name it), when working with a new client I am regularly surprised by how often they do not have a handle on what is in their portfolio and/or purposes of an asset allocation or lack thereof. During periods like the one we are in now, we watch television pundits that depending on the channel/time of day, are either predicting total market chaos, or a continuation of an extended bull market. Inevitably, it can create a lot of stress and confusion for an investor (and some financial advisors). In the end, investing should have the intended goal of creating “peace of mind” that a person(s) is on track so that they can breathe easier® (shameless plug), feel okay when they turn on the news and can live their lives the way they want to. Knowing What You Own ...

Read More →

How To Avoid A Holiday Charity Scam?

Over the past few weeks I have covered elderly scams and romance scams, but this one could hit one of your family members over the holidays… Last year, a New Jersey couple launched a fundraiser for a homeless man.  Donations poured in as hearts were ripped out about this tear-jerking story.  We see charitable causes all the time that pull the purse strings of our wallet, especially during the holidays. The story of the homeless man and the $400,000 GoFundMe money unraveled and we learned about the money that completely disappeared.  Everyone behind the GoFundMe campaign was playing America, but inevitably, they were outed. As we approach the season to be jolly, here are some tips on how not to get scammed when giving to charity. Start with the IRS – Yes, the IRS.  The IRS website has a Tax Exempt Organization Search you can use to see if the charity is in fact a legitimate organization.  Remember, you want ...

Read More →

Impeachment and the Stock Market

A lot of people are nervous about the stock markets after the latest drama with the President and the potential for his removal from office. After Speaker Nancy Pelosi announced that the House would launch a formal impeachment inquiry in response to the President’s dialogue with Ukrainian president Volodymyr Zelensky concerning former VP Joe Biden’s son, the US markets quickly fell. Investors were shaken by the potential of removal of President Donald Trump from office. By the time the closing bell rang, most sectors in the US were in the red after starting the day in the green. How does this process work and what history do we have to draw on for past performance of the stock market during impeachment proceedings? The answer to the former I can lay out for you, the answer to the latter is a bit harder to gather answers from. From October 1998 to February 1999, stocks rose despite the Clinton impeachment. But the ...

Read More →

The October 1st Deadline For Small Businesses

After an owner makes heads or tails at the end of the year, they will usually determine whether or not money is left behind for setting up some sort of long-term retirement plan within their business.   Since there are so many people setting up individual LLC’s or home-based side businesses, you need to keep a close eye out this time of year for setting up one kind of retirement plan, a SIMPLE IRA.   The deadlines are just around the corner in the next few weeks, so could this be the right type of retirement plan for you? A SIMPLE IRA (Savings Incentive Match Plan For Employees) was first available to small business owners in 2001. A SIMPLE IRA plan is an IRA-based plan that gives small employers a simplified method to make contributions toward their employees’ retirement and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions and the employer makes matching or ...

Read More →

Here’s The #1 Reason People Cheat On Their Taxes

Cheating.  It’s a morality question we talk about with our kids, our work colleagues, and even with ourselves.  It is OK to cheat.  In a recent poll, 10% of Americans say it’s OK to cheat here and there on your taxes and the number of people that say it’s OK to cheat is up 3.5% versus one year ago.  In fact, in a Credit Karma survey that interviewed 2,000 people, only 6% of the people actually confessed to the fact that they have cheated on their taxes in the past.  So, what’s the number one reason that people cheat on their taxes? Let’s talk first about what cheating really means.  There is a big difference between tax avoidance and tax evasion.  Tax avoidance is perfectly legal.  These are strategies such as using your 401(k), tax deductible IRA’s, pension plans, health savings accounts, and many other legitimate legal tax strategies that you can use under the current tax code.  Tax evasion ...

Read More →

Did You Just Get A 6.2% Raise At Work?

It’s pretty amazing to me how many people still don’t understand our payroll tax system.  When you work as a W-2 for an employer, both you and your employer are going to pay certain payroll taxes.  The two main types of taxes are the Federal Insurance Contributions Act (FICA) tax and the Medicare tax.   Both you and your employer pay 6.2% into FICA up to $132,900 this year and Medicare is a perpetuity tax at 1.45%.  Depending on your pay grade and what bonuses you have earned, you may have already received a raise in your paycheck and don’t even know it. The reason is, once you hit the $132,900 limit, you will no longer be paying into Social Security. Unfortunately, since there are many individuals who pay their full amount into social security and their income exceeds $132,900 in a particular calendar year, your HR department won’t send you a notice that you now have an extra 6.2% in ...

Read More →

Five Money Moves To Make When You Turn 50

Recently, I had the opportunity to experience something really special.  Several of my college roommates were turning 50 years old, and there was a multiple person birthday gathering in Washington, D.C. that I attended.  As we reminisced about the good old days in college and I watched their children run around (most of them six to eight years old), it occurred to me that my very own friends are going to be starting down the backstretch towards retirement.  It’s hard to imagine that for some of them they will be 65 years old when their kids either get into college or graduate college, so does this mean they will take a different path to retirement? Either way, there are smart money moves you should be making when you turn 50.  I know this first hand because the two co-founders of oXYGen Financial (Kile Lewis and myself) both turn the age of 50 this year.   While we started oXYGen Financial to ...

Read More →

The Three Most Important Letters In Retirement R M D

What is a required minimum distribution? (*) You’ll sometimes hear that you have important financial decisions to make when you turn the age of 70 ½.  The IRS has never seen a nickel of tax revenue on account you may have started in your early 20’s, so now they are wanting to get their due.  An RMD or required minimum distribution is the amount that the tax laws require you to take out of certain types of retirement accounts once you reach the age of 70 ½. If you have a traditional IRA, a 401(k) account, 403(b), or other types of retirement plans, then you’ll generally have to start taking RMDs once the provisions of the law kick in. The rules apply to certain inherited retirement accounts as well, so be very careful when you inherit an IRA. Required minimum distributions must be made in cash, and you’re generally required to complete the withdrawal by the end of the calendar ...

Read More →