By Nick Bautista
Last week the FED announced that they would begin to ramp down their bond purchases. Instead of purchasing $85 Billion in Treasury bonds they will now be purchasing just $75 Billion.
What this means is the FED is finally feeling confident enough to let the economy begin to stand on it’s own feet. As the FED meetings have become more popular than the stock market gains themselves, this change was inevitable. We thought it might happen sooner and with the recent events; job unemployment fell to 7% from 7.3%, congress was able to pass a bipartisan budget agreement to fund the government through the next two fiscal years, housing has been constantly building momentum, it appeared to the FED a good time to begin to Taper. Today’s number only solidified this when GDP third quarter number was revised up to 4.1%.
As a result of the taper the market has since soared to new highs. The new highs may have seemed opposite of what should have happened, due to the inevitability of the taper, the markets seemed to already have the announcement priced in.
Overall it seems to be the right decision from the FED, a decision that could have come earlier in my opinion. The FED hasn’t completely given up control, as the interest rate remains unchanged, the FED still has the ability to help aid the economy if something drastic were to occur. For now though, they are content while they watch for continued improvement in the economy. It is clear the economy has been improving and again it becomes inevitable until the FED begin to taper further ultimately raising interest rates.
Friday, December 27, 2013
Wednesday, December 11, 2013
5 Simple Ways To Help Save on Your Taxes
Presented by Nick
Bautista
As the end of 2013 is quickly approaching, there are several ways to help reduce your taxes before the year-end. I don’t know about you, but I don’t like paying more taxes than I have to. Think about these tips, and ask your CPA or tax professional before the end of year what they think about implementing any of these ideas:
1. Roth contribution – Not so much saving on taxes now, but by saving money into a Roth IRA, (preferable in a low tax bracket) with after tax money which means since you have already paid taxes on the money it will grow tax free and come out tax free in retirement.
2. Roth conversion – Same idea above except if you are in a higher tax bracket and aren’t allowed to contribute to a Roth, or if you have IRA money and you are in a low tax bracket a Roth conversion is a great way to pay taxes now and get tax free withdrawals/growth in retirement. For example if you are normally in a high tax bracket but you had a lower income year, converting an IRA to Roth could be a great move.
3. Realize losses – In a taxable account, (non-retirement account) you can realize losses up to $3,000 each year as an above the line deduction to your gross income. You must realize losses before 2013, and in order to realize a loss, you cannot sell and buy back the same/similar position within 30 days before or after the sale.
4. Max out your company retirement plan – You still have time to adjust your 401k contribution to contribute as much as possible to your employer plan; this will not only lower your taxable income, but it will lead to tax-deferred savings. This can work well for high earners.
5. Adjust your Withholdings via your W4 – By now you should know what your pay looks like for 2013. You can submit a new W4 to your employer if you are projected to over withhold on your taxes. By having less withheld on your paycheck, you can get more income now, instead of getting a refund later when you file your taxes. It also may be a good time to calculate your 2014 withholdings.
There you have it, 5 simple strategies to help save on taxes.
Please Note: All these strategies should be discussed with your CPA , tax professional or financial advisor. This is not advice to do any of the above without speaking to a professional regarding your specific situation.
Thursday, December 5, 2013
Year-End Financial Planning
Presented by Mark Phillips
With the end of the year quickly approaching, it is a wonderful time to begin organizing your finances for the New Year. We’ve put together a list of important financial planning topics that warrant consideration.
Flexible spending accounts
Money that you’ve put away in your flexible spending accounts (FSAs) generally must be used by year-end or it will be forfeited. Recently, however, the IRS modified this rule to allow participants to carry over up to $500 of unused funds into the next year. Your employer plan must elect to participate in this option, so be sure to check your plan terms to see if you can take advantage of this new rule.
If your employer has not elected this carry-over option, now is the time to schedule those doctor’s appointments you’ve been meaning to attend to or to stock up on items that are eligible for flexible spending. Doing this as soon as possible may help relieve some last-minute headaches and ensure that you don’t lose your hard-earned dollars.
Additionally, open enrollment begins around this time of year for certain employee benefit plans. So if you’re not using an FSA, take stock of your average expenses that would qualify. This can help you determine whether setting up an FSA for 2014 makes sense for you. If you already use an FSA, assess how much extra you have left in the account or how much of a deficit you ran and use it to calculate your allotment for the New Year.
Medicare enrollment
Open enrollment for Medicare started in October and ends December 7, 2013. For many, this is the only chance to change health and prescription drug coverage for 2014. If you want to make any changes, act now.
Too little or too much withholding.
Also of note is that workers with gross earned income of more than $200,000 may have had too little or too much tax withholding in 2013. Employers may have withheld an additional 0.90-percent tax on incomes over $200,000 without regard to the taxpayer’s withholding status, which would put these taxpayers at a higher threshold. Other taxpayers may have had too little withholding because of other income unknown to the employer due to second jobs. Employees should plan to take a credit on their returns or pay additional taxes.
Consider seeking professional guidance
The above list of financial planning dates is not exhaustive. We are happy to go over deadlines that are most relevant to your personal situation, so you can better prepare for the coming year.
Whatever your planning may entail, we wish you a happy, healthy, and prosperous 2014!
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
IRS CIRCULAR 230 DISCLOSURE:
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
With the end of the year quickly approaching, it is a wonderful time to begin organizing your finances for the New Year. We’ve put together a list of important financial planning topics that warrant consideration.
Flexible spending accounts
Money that you’ve put away in your flexible spending accounts (FSAs) generally must be used by year-end or it will be forfeited. Recently, however, the IRS modified this rule to allow participants to carry over up to $500 of unused funds into the next year. Your employer plan must elect to participate in this option, so be sure to check your plan terms to see if you can take advantage of this new rule.
If your employer has not elected this carry-over option, now is the time to schedule those doctor’s appointments you’ve been meaning to attend to or to stock up on items that are eligible for flexible spending. Doing this as soon as possible may help relieve some last-minute headaches and ensure that you don’t lose your hard-earned dollars.
Additionally, open enrollment begins around this time of year for certain employee benefit plans. So if you’re not using an FSA, take stock of your average expenses that would qualify. This can help you determine whether setting up an FSA for 2014 makes sense for you. If you already use an FSA, assess how much extra you have left in the account or how much of a deficit you ran and use it to calculate your allotment for the New Year.
Medicare enrollment
Open enrollment for Medicare started in October and ends December 7, 2013. For many, this is the only chance to change health and prescription drug coverage for 2014. If you want to make any changes, act now.
Too little or too much withholding.
Also of note is that workers with gross earned income of more than $200,000 may have had too little or too much tax withholding in 2013. Employers may have withheld an additional 0.90-percent tax on incomes over $200,000 without regard to the taxpayer’s withholding status, which would put these taxpayers at a higher threshold. Other taxpayers may have had too little withholding because of other income unknown to the employer due to second jobs. Employees should plan to take a credit on their returns or pay additional taxes.
Consider seeking professional guidance
The above list of financial planning dates is not exhaustive. We are happy to go over deadlines that are most relevant to your personal situation, so you can better prepare for the coming year.
Whatever your planning may entail, we wish you a happy, healthy, and prosperous 2014!
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
IRS CIRCULAR 230 DISCLOSURE:
To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Subscribe to:
Posts (Atom)