Leap of Faith

These are trying times. Despite the strains of pandemic, home schooling, work furloughs, and entire families sitting at dining room tables on laptops… there are still BIG decisions and “leaps of faith” to be made. Namely,

  • Annual Healthcare Enrollment (deadlines looming)
  • 401k contributions by year-end amidst a year of zany cash flows
  • Kids’ high school enrollments (these have changed for lots of people)
  • College semester enrollment and tuition payments
  • Home improvements like, “Do I add a home office?”… and more.
  • Don’t even get me started on – “Do I know who my beneficiaries are?” or “When do I start taking Social Security?”

This is nuts!

Take the time to become informed in order to make proper leaps of faith where needed or to stay put where necessary.

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2020 Year End Tax Planning Tips

As we approach the end of the weirdest year ever, nearly everyone wants 2020 to be O-V-E-R (unless you love birthdays, and your birthday is between now and December 31st).

The year-end countdown has begun, and soon it will be too late to make certain positive changes to your 2020 tax situation.  Several of these items, if addressed now, could make a big or small difference to your 2020 tax filing, AND add to your savings.

Several of these items, if addressed now, could make a big or small difference to your 2020 tax filing, AND add to your savings. Photo by Thirdman on Pexels.com

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The Biggest Winners

It is only fair that if there was an edition two weeks ago titled “Biggest Losers” there be an accompanying edition, “Biggest Winners.” Because there are A LOT of winners out there. But the financial and news media do not sell advertising talking about winners.

Here are the most obvious Winners, especially financially speaking:

Several of my clients and I painfully combed through their spending as part of the financial planning process. In most cases, these people came out with a greater awareness of who and what is most important to them.

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Politics, Grief & Money

Is it just me or has the election season and political climate made it feel like someone died? In fact, in the case that someone actually has died in the past 8-12 months we have not even been able to grieve in a healthy way.

What a topic for a Friday! And why am I bringing it up? This topic could take far more than 2 minutes to cover (don’t worry, I’ll keep it short).

Unfortunately, people do pass away. I have experienced both tragic and sudden death in my family. Death is a terrible and sad topic, but certain aspects of death need to be addressed within the concept of money – as harsh as that sounds. Grief is part of the topic too.

Find someone to trust to walk alongside you in times of grief so that your money and financial life are the crutch you can lean on to get you through to the other side of grief and hard times.

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Tax Traps, Part 1

Talking taxes on a Friday is a lot easier than talking taxes on a Monday! Believe it or not, at this time of year it is smart to be talking taxes no matter what. Preparation and planning are the name of the game.*

The issue of higher FUTURE taxes is critical to clients of all income levels – especially those in higher tax brackets – and all ages. You will hear me repeatedly hammering home this “tax trap” issue – with the research and collaboration from my sources to back it up.

Here is some “good” news when it comes to taxes and tax strategies: the Roth IRARoth IRA conversion and Roth 401k are alive and well for now. The “good” part is that for nearly ALL reading this, you ARE eligible for both the Roth IRA conversion and the Roth 401k (if your company offers a Roth 401k) even if you are in the higher/highest income brackets or own a business! And these strategies can be employed NOW for 2020 and 2021.

The issue of higher FUTURE taxes is critical to clients of all income levels, especially those in higher tax brackets
Photo by Karolina Grabowska on Pexels.com

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The Elephant in the Room

“Elephant in the room,” “ticking time bomb”…whatever you wish to call it, there is an issue currently present but not talked about nearly enough. The issue hits a nerve with nearly everyone – investor/saver or not. The issue is taxes – more specifically future taxes on retirement savings. Unfortunately, the issue has become so politicized that its true impact has almost been forgotten.

 Tax rates and total taxes paid may be higher or the same as today for lots of savers in retirement.

Back in 2016, I discussed part of this topic in TGIF 2 Minutes. (Click Death & Taxes to read.) At that time, the focus was soaring healthcare costs.

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Goals Gut Check

From the TGIF 2 Minutes Archives earlier this year PRE-coronavirus…

Earlier this year in February things were GOOD! The economy was cranking, unemployment was low, wages were up, and it was a somewhat perfect time of the year to set goals. Think: it was pre-tax filing time and after the holidays.

Fast forward to today… the world has changed. Our savings have been tapped in the pandemic — and new savings and other goals need to be reset! While the kids may now be going back to school (followed by maybe not??) using this precious time to set just a handful of goals can pay off toward achieving those goals.

silver and gold coins
Give yourself a “Goals Gut Check” with this precious time before things potentially go a little haywire.

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Tax Payment Deadline

A quick note regarding taxes and upcoming tax payment deadlines. These details could come under the category of “Captain Obvious” but are worth mentioning all the same.

The April 15th filing deadline for 2019 taxes was extended to July 15thThere have been rumors of the deadline being extended even further to September or October. This looks ABSOLUTELY NOT to be the case.* The 2019 Tax Filing deadline remains July 15th . See here: IRS.GOV


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Tax Time Groundhog Day

Now that the calendar has turned from April to May there will be in effect a “Tax Time Groundhog Day” on July 15th, which is the new 2019 Federal (and most States*) filing deadline for 2019 taxes.

A number of people reading this note may already have signed and filed their 2019 tax returns^ in order to turn the page and move on to 2020 spending, budgeting and saving. However, if you are in the camp that is stretching out your 2019 filing until the July 15th date, then consider a few last-minute items:

COVID_Cares-Act
Call me with questions or curiosities related to temporary changes related to 401k plans, IRAs and RMDs.

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A Couple of Practical Suggestions

Very short note today as we do our best to stay strong amidst the Coronavirus crisis.

In talking to clients, friends, neighbors, and “kids” of all ages, the questions come down to, “Is there anything financially proactive we can be doing at this time?”

finance news newspaper stocks
In talking to clients, friends, neighbors, and “kids” of all ages, the questions come down to, “Is there anything financially proactive we can be doing at this time?”

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