The Asset Allocation Balancing Act by Fairman Group

You see and hear it everywhere: Individual stock or fund performance is the most important element of investing. To Fairman Group, this approach is counterproductive to long-term financial success because study after study has concluded that the critical factor is the ‘mix’ of stocks, bonds, and other assets owned. This mix, called asset allocation, is vital to the success or failure of your investment plan.

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Fairman Group Discusses Tax Proposals in the Build Back Better Plan

The House has passed the Build Back Better Plan. The Bill now goes to the Senate, where additional compromises and changes could be made. Learn more about what is included in the Build Back Better Plan by clicking ‘Read More’ below.

What IS NOT Included

  • Increasing the Top Rate to 39.6%
  • Increasing the Capital Gain Rates to 25%
  • Limitations on Qualified Business Income (QBI) Deduction
  • Decreasing the Estate Tax Unified Credit
  • Eliminating Step-up in Basis Upon Death
  • Changing Grantor Trust Rules
  • Limiting Use of Valuation Discounts

What IS Included

  • 5%/3% ‘Surcharge’
  • Application of Net Investment Income Tax to Trade or Business Income
  • Increase SALT Cap
  • Limit Certain Section 1202 Gain Exclusion
  • Modification of Rules Relating to Retirement Plans
  • Audit More Taxpayers with Income over $400,000

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Fairman Group Discusses Recent Tax Proposals & Associated Tax Law Changes

The Democratic Majority of the House Ways and Means committee has released tax proposals. These proposals present several new spending initiatives in the areas of infrastructure, green energy, social safety net, and prescription drugs. To raise revenue, the tax proposals include additional tax law changes. Linked below is an article by Fairman Group’s Julia Ziechmann, explaining the plan’s tax provisions and how they could affect you.

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Fairman Group Explains the New Child Tax Credit Update

The American Rescue Plan Act changed the way that the Child Tax Credit is paid to eligible parents for 2021. Instead of being claimed as a credit on your income tax return as was previously the case, starting July of 2021, one-half of the amount of the credit will be paid monthly via a direct deposit to your checking account or a physical check mailed to you. If you decide to opt out of receiving the advanced Child Tax Credit, the IRS has created a portal you can use to indicate that change.

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Fairman Group Explains the American Families Plan & Its Potential Effects

President Biden recently proposed the American Families Plan which calls for an increased audit rate and higher income taxes. The proposed changes could require proactive tax planning now to determine the best timing of income recognition. The Plan includes several new spending initiatives in the areas of education, childcare, paid leave, nutrition, unemployment insurance, and tax credits. To raise revenue, the President’s proposals include additional tax law changes.

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Fairman Group Explains Recent Estate & Gift Tax Proposal & Bills

Senator Bernie Sanders has proposed a bill that would change the current estate and gift tax system. Representative Bill Pascrell and Senator Chris Van Hollen have introduced bills that would eliminate the step-up in basis at death. Given the magnitude of potential changes, Fairman Group urges you to reassess your estate planning as soon as possible. Learn more about the 99.5% Act, H.R.2286 and STEP Act.

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Fairman Group Explains Residency & Domicile Regulations

Domicile is a lesser-known concept that goes beyond where you own property or where you spend most of your time and it is essentially intent-based. Domicile is a person’s fixed, principle, and permanent home or the place they intend to remain or return to, after being absent. While you can have multiple residences across many states, you can only have one domicile for state income tax purposes.

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Fairman Group Explains Why Growth Versus Value is a Balancing Act

Over the last decade, there hasn’t been much to complain about when it comes to equity performance. Even after the sharp decline seen in financial markets earlier this year, equity indices have rebounded with strength and now sit at or near all-time highs. The resilience, performance, and consistency of the market in the last ten years has been nothing short of impressive—that is, unless you’re a value investor.

Value and growth investment styles are two philosophies that are often compared and studied. The basic premise behind value investing is that companies who are undervalued, based on a variety of metrics, are sought out with the hopes that the market will eventually realize its full worth—it can be thought of as “seeking to buy a dollar for 50 cents”. Growth investing, on the other hand, is less concerned about the valuation of a company and more concerned about current and expected growth rates—even if there is a premium to pay. Growth investing can be thought of as “buying 50 cents for a dollar, expecting to sell it for 5 dollars”.

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