There is still time to implement some great tax planning ideas for 2019. While many planning tools remain similar to last year, the IRS has issued new guidance that could affect your tax situation.
Idea 1: Charitable Contributions
Consider a Donor Advised Fund (DAF). If you want to take advantage of itemized deductions, but do not want all the money to go to the charity in a single year, a DAF is the perfect vehicle to accomplish this goal.
Consider a Qualified Charitable Distribution (QCD). Instead of taking a distribution from an Individual Retirement Account (IRA), taxpayers age 70 ½ and over may directly transfer up to $100,000 to public charities. The income tax benefit is not a charitable deduction, but rather, the exclusion of the donation amount from your income.
Charitable contributions in exchange for state or local tax credits are now limited. The IRS issued final regulations that require taxpayers to reduce their Federal charitable deduction by state or local tax credits received in return for their contribution. For PA residents, this has a direct impact on charitable contributions made through Pennsylvania’s Educational Improvement Tax Credit and Opportunity Scholarship Tax Credit programs.
One of the things that makes Fairman Group unique is the comprehensive suite of services they provide—all under one roof: Tax Preparation and Planning, Investment Advice, Life Planning, and Estate Planning. When people think of Fairman Group, they think of high technical expertise, commitment to quality, high touch service, and unwavering dedication to our clients.
Wealth can be garnered in numerous ways—from diligent savings, prudent investing, entrepreneurial ventures, equity compensation structures, inheritance, or divorce.
Whatever the circumstances, with newly created or realized wealth comes great responsibility, significant complexity, and potentially unsettling emotions. Handling this responsibility effectively can help ease your financial stress, simplify the associated burdens, and enable a more gratifying life experience.
At what point is someone considered to be wealthy? As with the notion of ‘success’, the definition of ‘wealth’ can differ across a spectrum of varying beliefs. Regardless, one universal truth remains: Without thorough consideration and careful planning, a significant change in the financial status of an individual or family can create confusion and complications.
If you find yourself faced with a multitude of financial issues dues to unexpected wealth, consider these questions:
After months of planning and preparation, they have moved their offices to Liberty Ridge in the Chesterbrook Business Park. Get a glimpse of the construction project and the new office in the video below!
If you are ready to retire, entering a second career, caring for aging parents, or have adult children, you won’t want to miss Fairman Group Family Office’s must-read, fictional series about the financial challenges, opportunities and gotcha’s regarding life challenges as an empty nester.
The Next Nest series follows the Carlsons, a fictional
family, who lives on the Main Line. Their three children are grown and out of
the house with families of their own, each navigating their own personal and
financial challenges. As new empty nesters, the Carlsons want to act on available
opportunities and are ready to pursue some of their goals–such as the forever-pushed-back
home renovation project–while also navigating the new challenges that come with
this stage of life.
Read the stories below for real insights and the
financial implications of the opportunities and challenges that come along with
the empty-nester life.
You may have noticed quite a few articles in the news recently about Equity Compensation—usually referring to some astronomical amount of compensation that a CEO is being rewarded. While those articles tend to sensationalize executive compensation, “equity” as compensation is quite common—and you may already be the recipient of one or more types of equity compensation.
Equity compensation is pay in the form of company ownership or stock. It can be awarded instead of, or in conjunction with, regular cash compensation. Many employers consider equity to be a way of aligning an employee’s interest with the goals and growth of the company. It could take the form of:
The Next Nest series features a fictitious family—the Carlsons. In the last issue, James, age 60, an executive with a publicly-held company headquartered in the Philadelphia suburbs and Jeanne, age 58, owner of a small public relations firm, received news that their first grandchild was on the way and sought ways to financially help their children and future grandchild. Now they find themselves in the dead of winter, wondering when they will be financially secure enough to spend their winters someplace warm. Have they saved enough money for James to consider stepping down from his high-paying, high-stress position?
It might make sense to seek advice from a financial professional, so you start your research. Unfortunately, this results in a myriad of confusing titles: Financial Consultant, Financial Advisor, Advanced Retirement Specialist, Wealth Manager, Retirement Counselor, Financial Planner and other variations on the theme. It all seems like a name game.
Since investments are an integral part to your overall plan, a good approach may be to sort prospective advisors by the legal standard of care to which they are held. Those who are acting as a broker or sales agent are held to a “product suitability” standard. This group typically consists of stock brokers and life insurance agents, whose primary function is that of a salesperson; investment advice is merely incidental to their role.
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.
Here in the U.S., we celebrate the New Year with the Times Square Ball Drop. In Japan, ‘Bonenki’ (forget-the-year parties) are held to bid farewell to the problems and concerns of the past. In the Netherlands, the Dutch burn their Christmas trees in large bonfires—to purge the old and welcome the new.
It seems that investors also have an annual New Year’s tradition—that of cleansing and purging their portfolios. They eagerly await publication of various mutual fund ranking reports. Armed with this data, they rush to analyze their portfolios and prepare a list of ‘must have’ funds selected based on last year’s performance. As a result, their current investment holdings are divided into two camps: “Winners” and “Dogs”.