This week, I’m talking about  year-end tax planning to help you take advantage of opportunities to potentially lower your taxes this year. 

Today, I’m talking about how to review your gains and losses, which is something that you’ll want to do with your tax advisor and financial advisor near the end of every year. 

In 2020, especially, there are wild variances in returns among different asset classes and types of investments. If you own energy stocks, financial stocks, international investments or value stocks, you’re likely to have losses. If you have a heavy concentration in tech companies or consumer discretionary stocks, you’ll likely have some big gains there. 

Outside of your investment portfolio, you may have gains or losses from selling business or real estate or other assets. 

The key here is that you’ll want to review both realized and unrealized gains and losses in your portfolio to determine if it makes sense to sell in order to offset gains for the year. For example, let’s say you sold a stock earlier this year in a taxable account that had a gain of $50,000. Normally you would owe taxes on the amount of the gain, but if you have a loss in another stock or investment in the same account, you can also sell that investment and the losses will reduce the amount of the gains. 

Even if you don’t want to permanently sell the investment, as long as you stay out of that investment for 30 days, you can buy it back later and still recognize the loss. 

This is an important strategy that should not be overlooked, so be sure you take the time to review gains and losses with your advisors before the end of the year to determine if you can offset any of those gains and reduce your tax bill as a result. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about  year-end tax planning to help you take advantage of opportunities to potentially lower your taxes this year. 

Today, I’m talking about gifting opportunities. Back in June I devoted an entire week to this topic. If you missed that week and you want to dive deeper into gifting, head on over to my website - truenorthra.com. Under the resources tab, you’ll find the podcast page with links to episode archives. 

Gifting, especially during your lifetime, can be a powerful strategy to transfer wealth, business interests, property, and a variety of other assets to your family and heirs, and with the current generous gifting and estate tax rules, now is the time to gift. Seriously, don’t wait...it’s unlikely that the generous tax laws on gifting will stick around. 

Let me explain...

In 2020, you can give up to $15,000 per gift recipient without paying taxes and up to $30,000 per gift recipient if you're married.

But...you can actually give substantially more to your heirs without being subject to tax. The additional gift will just be applied to your lifetime exemption. 

Let’s say you own a family business worth $3 million dollars. Would you be shocked to learn that you can actually gift that business to your children during your lifetime without paying tax on that gift? 

That’s because of the lifetime gift tax exemption, which is currently $11.58 million in 2020. This means that you can give up to $11.58 million in gifts over the course of your lifetime without ever having to pay gift tax on it. And if you are married, it’s double that amount. You and your spouse can give away a total of $23.16 million before paying the gift tax.

Keep in mind though that if you have substantial wealth or assets to transfer, you want to do it before the rules change and not wait, because the IRS has stated that there will be no clawback on these lifetime gifts. Which means that you can now transfer tens of millions of dollars of your estate - gift tax free, without fearing that those gifts will later be taxed.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about  year-end tax planning to help you take advantage of opportunities to potentially lower your taxes this year. 

Today, I’m talking about fixing your withholding. This is something you’ll want to look at annually as your income changes, but this is especially relevant in 2020 where your income may be substantially different than it was in 2019. 

Withholding the right amount on your income - like salary, bonuses, or IRA withdrawals - is important, because you don’t want to overpay or underpay taxes. While you don’t want to give more money to the government than is necessary in the form of too much withholding, the real problem are potential penalties for underpaying taxes on your withholding. The good news is that you still have time to correct the issue before the end of the year through increased withholding on your salary, bonuses, or retirement plan distributions. 

So if your income changed a lot in 2020 - especially if you’re fortunate enough to have an increase in your income in 2020, be sure to review your withholding and make sure it’s appropriate to avoid underpayment penalties.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about  year-end tax planning to help you take advantage of opportunities to potentially lower your taxes this year. 

Today, I’m talking about how and why you should plan for higher future taxes now. Since the Tax Cuts and Jobs Act was signed into law at the end of 2017, it has been one of the most favorable tax climates in recent history. So right now is arguably the best time to do tax planning and take advantage of the current favorable tax environment...because it’s not likely to last. 

Here are just a few ideas you may want to consider in light of the high probability of future tax hikes: 

Exercising stock options or selling stock that has a low cost basis. Capital gains tax rates are pretty low by historical norms, so now is a good time to look at exercising options or selling a long-held large stock position. Even if you don’t sell all of it, it’s wise to consider selling some in this tax climate. 

Another strategy to consider is converting a traditional IRA into a Roth IRA. The more money you can save inside of a Roth IRA or 401k, the lower the taxes will be on your IRA distributions in retirement. That’s because every penny you withdraw from your Roth IRA in retirement won’t be taxed. 

A Roth conversion allows you to convert money from a Traditional 401k or IRA to a Roth 401k or IRA and pay the taxes now. Since tax rates are low right now, and especially if you have substantial assets in traditional IRA or 401k accounts that will be subject to tax down the road, you’ll want to look seriously at a conversion before the end of the year. 

If you’d like some help determining if a Roth conversion makes sense for you, I can help you answer that question with a free Roth conversion analysis. Just send me an email to [email protected] with your age, the dollar amount you want to convert, and your expected income for 2020, and I’ll send you your free personalized results. That’s [email protected]. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about  year-end tax planning to help you take advantage of opportunities to potentially lower your taxes this year. 

Today, I’m talking about taking advantage of charitable deductions. If you itemize and don’t just take the standard deduction when you file your taxes, your charitable giving can have a meaningful impact on your taxes. 

In today’s tip, I want to touch on 3 important strategies to consider for taking advantage of charitable giving: 

• Strategy 1 that’s unique for this year - normally, you won’t benefit on your taxes for your charitable donations if you don’t itemize, but this year, the CARES Act created an above-the-line deduction of up to $300 for cash contributions from taxpayers who don’t itemize. So even if you take the standard deduction, you can still benefit from your charitable contributions because of the CARES Act for 2020
• Next is charitable bunching. This is a strategy where you lump your charitable donations into one year, so instead of donating to charity every year, you would donate more dollars less often. So for example, if you donate $5,000 every year to charity, but switch to donating $15,000 every 3 years instead, you would still donate the same amount, but by donating a higher amount in a given year, the strategy of lumping or bunching those contributions into one year can help you qualify for itemized deductions and hence, allow you to continue to receive a tax deduction on those charitable contributions in the years that you bunch.
• Lastly, consider donating property, appreciated stock or other real assets. You can still often get a tax deduction when you donate certain items in-kind, and it’s a great strategy if you are strapped for cash but you have a valuable asset that you would like to donate. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

Welcome to a new week and a new theme here on the One Minute Retirement Tip! 

As we approach the end of the year, it’s an important time to do some year-end tax planning to take advantage of opportunities to potentially lower your taxes before the door closes on December 31st. 

I just received an email the other day from a listener of the podcast who has had a really unique year with a wildly different income and tax situation than normal. I recommended that he seek the advice of a qualified tax advisor, and in many cases a knowledgeable and proactive tax advisor is capable of saving their clients headaches and tax-saving opportunities, so if you have questions especially as we get into the weeds of some of these tax strategies this week, I encourage you to talk to a well- qualified tax advisor. 

This week, I’ll cover 5 specific strategies to help you lower your tax bill in 2020. There are a few tax quirks this year with Covid, so we’ll talk about how your stimulus check is taxed as well as a couple of perennial ideas like how to review your capital gains and losses and why you don’t want to miss gifting or charitable giving opportunities. 

The key with 2020 is that for many of you listening, 2020 may have been a bit of a curveball - some of you may have been laid off or furloughed, or seen your income drop from 2019. If that’s the case you’ll want to pay special attention to your tax situation this year and to this week’s tips.But even if that’s not the case, my hope this week is that you will use the ideas I’ll be sharing this week to look at your income and tax situation, and consider what savings strategies may apply to you before 2020 comes to a close. 

That’s it for today. But before you go...you probably know someone who is close to retirement and could benefit from listening to this podcast. If so, please share this podcast with them and encourage them to check it out by adding it to their flash briefing in Alexa or subscribing wherever they listen to podcasts!

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

It’s Sunday, which means...It’s recap time! This week, we looked at investing in an election year. As I mentioned previously, I record the podcast a couple weeks in advance, so I don’t yet know the results of the election. But there are principles that are important to be mindful of when you're looking at the election through the lens of planning for your retirement and how that might impact you and your investments. 

Here’s what we covered in each episode this week:

• What a possible blue wave could mean for you and your retirement
• The election’s historical impact on the stock market
• The biggest mistake you can make right now
• Don’t get spooked by post-election volatility
• And lastly, what to do about taxes and estate planning opportunities - the clock is ticking on massive opportunities to transfer wealth in a very tax-efficient way, so you definitely want to consider taking action now if it makes sense in your situation. 

My hope is that you come away from this week with some perspective that the election or any resulting volatility in the stock market because of the election isn’t something to panic about or abandon your long-term strategy over, but rather it’s likely that the election results will have very little impact on your long-term strategy and for some, the election even represents an opportunity to take advantage of any coming changes to policy, regulation, taxes, etc. 

Tomorrow, we are starting a brand new theme:2020 Year End Tax Planning Tips. I’ll talk about 5 ways you can potentially reduce your taxes this year and take advantage of several opportunities in 2020. Everything from what to do about your stimulus check to maximizing deductions. 

And if you haven’t already, be sure to check out my YouTube channel - True North Retirement, where I cover a wide variety of retirement planning topics - everything from whether or not you should pay off your mortgage before you retire to understanding the lifetime gift tax exclusion to inherited IRA rule changes for 2020. 

That’s it for this week! Thanks for listening and I hope you have a blessed Sunday! 

My name is Ashley Micciche and this is the “One Minute Retirement Tip”.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about investing in an election year. 

As I record this podcast a couple weeks in advance, I don’t yet know the outcome of the election. Something I’ve already touched on this week is the importance of tax and estate planning before the tax laws change. 

This is especially true if Biden is elected president, but it’s also true I think if Trump remains in the White House for another 4 years. Let me explain…

If Biden is elected, and especially if Congress is controlled by democrats, you’re likely to see higher taxes. Biden campaigned on this, and especially with all the stimulus money being pumped into the economy because of COVID, taxes seem very likely to quickly change course and go higher. 

Even if Trump remains in the White House or if Congress is controlled by Republicans, taxes are still likely to go higher. It may take longer for taxes to increase with Republicans in control, but our national debt is increasingly unsustainable and economic growth may not be robust coming out of the Covid recession to grow our way out of the debt. 

This reminds me of what George HW Bush said in 1988: “Read my lips. No new taxes”. But 2 years later, he made a deal with the Democrat-controlled Congress to increase taxes as a way to reduce the national budget deficit.

Hmm, does any of this sound familiar?

If history is any guide, higher taxes are probable looking out on the horizon. 

This means that 2020 is an important year to do some planning and gifting, especially if you are wealthy. As I talked about a couple months ago on the podcast when I covered gift taxes, 2020 is an ideal time to do some gifting and estate planning, especially if your estate will likely be worth millions, you have a valuable business or other assets that may be subject to high estate taxes down the road. 

The estate and gift tax environment has never been better than it is today, and no matter which party controls the government over the next few years, the clock is ticking to pass along wealth in a tax-efficient way to the next generation.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about investing in an election year. 

Today, I’m talking about the likelihood for higher volatility in the days and weeks ahead. 

Some people are so fearful about what lies ahead politically, that they make big changes to their portfolio. Maybe you’ve decided to go out and buy a few guns and while you’re at it, put all of your IRA into gold. 

Allowing fear to dictate your decisions is almost always a mistake, especially when it comes to investing. 

So the worst thing you can do is abandon your long-term plans during or after a presidential election. 

As I’ve mentioned earlier this week, you need to pay attention to a few things and make some changes if necessary while you still have time - especially when it comes to taking advantage of today’s tax environment, but outside of planning and making sure you don’t have all your eggs in one basket with a particular stock and a particular industry, an election year is not a time to abandon your long-term plans by going to cash or putting everything in canned food, gold coins, and lots of guns.

While it is natural and normal to want to protect yourself in times of uncertainty, keeping a cool head and thinking rationally will always help you make smart decisions that don’t include abandoning your long-term strategy. 

Instead, the best investors look for opportunities in times of chaos and uncertainty. Where are those areas of opportunity? Perhaps in particular industries or types of stocks - like international or high-quality dividend stocks. Or as I just mentioned - opportunities in tax and estate planning. Keep your eyes open to opportunities and you’re more likely to come out ahead in the long-run.

That’s it for today, thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast

This week, I’m talking about investing in an election year. 

Today, I’m talking about the biggest mistake you can make post-election, which is to get spooked and make big changes to your investment strategy as a result of the election. 

Some people are so fearful about what lies ahead politically, that they make big changes to their investments and their strategy, without considering that the election results will likely have little impact on your retirement strategy over the long-term. 

So the worst thing you can do is abandon your long-term plans during or after a presidential election. I know people on both sides of the political spectrum who think that the world is going to hell in a handbasket. About half of the country is pretty pissed off at the election results. 

But if both sides are divided and both think the country is going in the wrong direction, who’s right? Probably neither. 

As I’ve mentioned earlier this week, you need to pay attention to a few things and make some changes if necessary while you still have time - especially when it comes to taking advantage of today’s tax environment, but outside of planning and making sure you don’t have all your eggs in one basket with a particular stock and a particular industry, an election year is not a time to abandon your long-term plans by going to cash or putting everything in canned food, gold coins, and lots of guns.

While it is natural and normal to want to protect yourself in times of uncertainty, keeping a cool head and thinking rationally will always help you make smart decisions that don’t include abandoning your long-term strategy. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, finances, financial planning, retirement planning, saving money, personal finance, wealth management, money tips, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast