Financial Planning

Submitted by Susan Powers on November 11, 2018

Looking for tips to help you save money on your tax bill for 2018?  Smart tax planning starts now rather than waiting until next year when it’s often too late.  Here are 5 tips to help you take full advantage of tax reform.

1.  Review your investments, ‘harvest’ losses

Given recent market volatility, you may have losses in your taxable accounts.  You can lock in those losses for tax purposes, while still being invested for the long-term by buying something similar, but not identical.  You can use these tax losses to offset capital gains when you file your tax returns.  This is a concept known as tax-loss harvesting.   For example, if you sold one investment and realized a gain of $5,000 and then sold another at a loss of $4,000, you reduce your taxable gain to $1,000.  If your loss is larger than the gain, you can deduct up to $3,000 of the net loss against ordinary income.

Submitted by Pat Cote on October 30, 2018

As the stock market has shown many times in the past, October was once again a month of high market volatility.  This brings the usual chatter about what’s driving the volatility – the Fed raising rates, trade wars, political issues, etc.  It is not necessarily a bear market looming - the reality is that we just experienced the longest bull market in US history, so we are overdue for market volatility, including a market correction.

There are three key steps to follow, especially with volatile markets:

Submitted by Susan Powers on August 22, 2018

Looking for a great tax deduction?  Proposed regulations from the Internal Revenue Service regarding the new 20 percent qualified business income (QBI) deduction were issued August 8^th.  They attempt to clarify the definition of QBI and “Specified Service” businesses, how phase out rules can reduce or eliminate QBI deductions and an anti-abuse rule designed to prevent separating out parts of otherwise disqualified business.

Often referred to as a deduction for pass-through businesses, let’s be clear.  These rules apply to owners of sole proprietorships, partnerships, trusts and S corporations allowing them to deduct 20 percent of their QBI.

Submitted by Pat Cote on July 24, 2018

There is change in the air for work and retirement.  The lines between them have blurred and in a lot of cases, that can be a good thing.

When we work on financial plans, many of our clients tell us that they do not want to have a hard date in retirement at which they stop all forms of work.  Many people enjoy what they do – one of the more common goals is to have some interim stage at which they continue with their profession (perhaps setting up their own business) with reduced hours.   Many of the HENRYs (High Earners, Not Rich Yet) that we work with are working long hours, so having a more balanced lifestyle in a pre or early retirement stage is important to them.  Of course, this is not feasible for everyone – fortunately, many professions and leadership roles allow for some form of scaled back work.

Submitted by Susan Powers on June 27, 2018

This week was the 6 month anniversary of the Tax Cuts and Jobs Act (‘TCJA’) designed to decrease the taxable rate for corporations and individuals, and significantly limit allowable deductions. Since this change to the Tax Code was one of the largest since the Reagan era, the Internal Revenue Service will need to publish many regulations and advisories in the coming months to better clarify provisions of the TCJA. 

Submitted by Kate Hennessy on June 27, 2018

When I look around our neighborhood, I see numerous homes for sale. No better time to think about your financial future than the day you close on your new home. It’s the single biggest investment in your life - do you know how to protect it and what it means for the rest of your financial goals? Sit down with a financial advisor to review this major investment and how it fits in with your financial plan.

Purchasing a new home brings up various financial considerations and opportunities.

Submitted by Patrick Cote on February 28, 2018

One of the biggest changes in the new tax law is that pass-through businesses, such as S corporations and LLCs, now get a 20% deduction for income.  This deduction is available whether the standard deduction is taken or deductions are itemized.

Submitted by Patrick Cote on January 31, 2018

Most of us have been impacted by the new tax law. You have probably already heard of the major provisions, such as lower rates overall and the reduced ability to deduct state and local taxes. If you are a business owner, particularly of a pass-through like an LLC, there are more significant changes that are quite relevant.

At AssetGrade, taxes play a critical role for most of our clients, so we work very closely with our clients and their CPAs to maximize their after-tax investing performance.

At 1,097 pages, the new tax law is a large document - realistically, it will take a while for everyone to absorb and think through the implications. There are already some immediate implications emerging for 529 accounts and Roth IRAs that we will be addressing shortly.

We are dedicating a new section of our website to keep all of the key information and investing ideas/implications we develop or come across from other people. We encourage you to check in on it from time to time, as we will keep adding to it throughout the year.

Submitted by Kate Hennessy on December 12, 2017

As a parent I appreciate the saying “they grow up so fast.”  When I was on maternity leave in 2010, I remember how excited I was to fund our daughter’s 529 plan and plan for her future.

Selecting the right 529 plan can be as intimidating as determining how much to contribute each year.  In working with my clients, I have identified several types of 529 plans and funding schedules to meet their needs.

Submitted by Patrick Cote on August 23, 2017

How to avoid “shirtsleeves to shirtsleeves in three generations”

Congratulations!  You are on track to accumulate enough wealth to consider yourself wealthy (or maybe you are already there)!  Now what?  If you have kids (or nieces and nephews), one of your biggest concerns is likely to be to ensure that they, as well as future generations of your family, are able to benefit from the wealth in a positive manner.  Even if you don’t think the amount you will leave to future generations is going to be that substantial, many of the tips below will still help.

At AssetGrade, we have had a number of clients ask for help with multiple generations of their family.  In particular, we are focusing on ensuring that the priorities and goals of each generation are aligned where possible.  We have seen our clients be most successful when they have kept the multi-generation goals specific and manageable.

For most folks who are the original creators of wealth for their family, whether they are HENRYs (High Earners, Not Rich Yet) or already wealthy, they want to see their children and future generations benefit from the family wealth by getting a great education and helping them with a head-start to lead fulfilling, productive lives.  They want to avoid scenarios in which the wealth becomes a negative influence on the family.  A good financial plan can help define these specific goals for your family.