Are Charitable Deductions Going To Be Wiped Out Under Trump?

For many American families who prepare for year end tax planning, no discussion is complete without talking about charitable contributions.   Many families make charitable contributions by tithing a percentage of their family income, giving cash to local charities, or they end up taking non-cash items from their household and donating them to a worthy charity.  With the potential shake up in the tax law under a Trump regime, will you have your charitable contributions completely wiped out in 2017? First things first.   You don’t really need to worry about charitable contributions if you don’t itemize your deductions at all.  Today, a single filer has a $6,300 standard deduction and a married couple has $12,600 for a standard deduction. In addition, you get to deduct you, your spouse, and your children as personal exemptions on your tax return.  The suggested policy going forward would be to wipe out the personal exemptions and offer a larger standard deduction of $15,000 for a ...

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Rent or Buy, Which is Better?

In my 16 years as a financial planner, I have been asked this question many times. For decades our society has told us that renting is just throwing your money away and that buying a house is a good investment. Even the government tries to influence our behavior with offering a tax deduction on the mortgage interest. We have to start realizing that your house is not an investment. Investments should be able to feed you income; and as I always say ‘You can’t eat your house’. So which is it, Rent or Buy? Let’s compare some facts. First with renting you don’t have maintenance costs, mortgage interest, property taxes and renter’s insurance is dramatically less expensive than homeowner’s insurance. If you average $1000/month in rent over 30 years, that’s a total of $360,000. Throw in another $15/mo for renter’s insurance and the total spent to rent for 30 years is $365,400. Now if you were to buy, say a ...

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Four Rules Of Thumb That Are Thumbs Down

For many years I have seen articles galore in the major magazines giving consumers “rules of thumb” about making financial decisions.   In a society today where we want to get all of our information in sixty seconds or less, many of these magazines can talk one week about five dollar meals to make and then the next week discuss major financial decisions to make in your household.   I’ve never really been a big fan of “rules of thumb”, so here are four major financial “rules of thumb” that I am simply thumbs down on when it comes to making smart money moves.  Rule Of Thumb #1- 2% Difference In Interest Rate To Refinance –   Many popular magazine and newspaper articles will suggest that you generally shouldn’t consider refinancing unless the difference between the new interest rate and your old interest rate is 2%.    This “rule” makes very little sense to me. What you want to be considering are a handful ...

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