There are many reasons why individuals decide to surrender their annuities. Unfortunately, one of the most common reasons that we see is when individuals realize that they were sold the annuity by a broker and that annuity investment was either not in their best interest or they discover that there are other investment solutions that will better meet the investment objectives.   This situation can often lead to individuals making the tough decision to cut their losses and surrender the annuity.  But before surrendering their annuity, it’s important for investors to understand the questions to ask the annuity company about the surrender fees and potential tax liability before making e the final decision to end their annuity contract.

When a business owner sells their business and is looking for a large tax deduction and has charitable intent, a common solution is setting up a private foundation to capture a large tax deduction.  In this video, we will cover how foundations work, what is the minimum funding amount, the tax benefits, how the foundation is funded, and more……. 

As an investment firm, November and December is considered “tax-loss harvesting season” where we work with our clients to identify investment losses that can be used to offset capital gains that have been realized throughout the year in an effort to reduce their tax liability for the year.  But there are a lot of IRS rule surrounding what “type” of realized losses can be used to offset realized gains and retail investors are often unaware of these rules which can lead to errors in their lost harvesting strategies. 

There is a little-known, very lucrative New York State Tax Credit that came into existence within the past few years for individuals who wish to make charitable donations to their SUNY college of choice through the SUNY Impact Foundation.  The tax credit is so large that individuals who make a $10,000 donation to the SUNY Impact Foundation can receive a dollar-for-dollar tax credit of $8,500 whether they take the standard deduction or itemize on their tax return. This results in a windfall of cash to pre-selected athletic programs and academic programs by the donor at their SUNY college of choice, with very little true out-of-pocket cost to the donors themselves once the tax credit is factored in.

It seems as though the likely outcome of the 2024 presidential elections will be a Trump win, and potentially full control of the Senate and House by the Republicans to complete the “full sweep”.  As I write this article at 6am the day after election day, it looks like Trump will be president, the Senate will be controlled by the Republicans, and the House is too close to call.  If the Republicans complete the full sweep, there is a higher probability that the tax law changes that Trump proposed on his campaign trail will be passed by Congress and signed into law as early as 2025. 

Qualified Charitable Distributions are an advanced tax strategy used by individuals who are age 70½ or older who typically make annual contributions to their church, charity, or other not-for-profit organizations.  QCDs allow individuals who have pre-tax IRAs to send money directly from their IRA to their charity of choice, and they avoid having to pay tax on those distributions.   However, a client recently asked an excellent question:

“Can you process a qualified charitable distribution from an Inherited IRA?  If yes, does that QCD also count toward the annual RMD requirement?”

 Squarespace Excerpt: As individuals approach retirement, they often begin reviewing their annual expenses, looking for ways to trim unnecessary expenses so their retirement savings last as long as possible now that their paychecks are about to stop for their working years.  A common question that comes up during these client meetings is “Should I get rid of my life insurance policy now that I will be retiring?”

When clients are looking to purchase a new car one of the most common questions that we receive is “Should I Buy or Lease?”  To get the answer, we interviewed a Certified Financial Planner and the owner of Rensselaer Honda to educate our audience on the pros and cons of buying vs leasing.

When we are working with clients on their estate plan, one of the primary objectives is to assist them with titling their assets so they avoid the probate process after they pass away.  For anyone that has had to serve as the executor of an estate, you have probably had firsthand experience of how much of a headache the probate processes which is why it's typically a goal of an estate plan to avoid the probate process altogether. 

Due to changes in the tax laws, fewer individuals are now able to capture a tax deduction for their charitable contributions.   In an effort to recapture the tax deduction, more individuals are setting up Donor Advised Funds at Fidelity and Vanguard to take full advantage of the tax deduction associated with giving to a charity, church, college, or other not-for-profit organizations. 

Self-employed individuals have a lot of options when it comes to deducting expenses for their vehicle to offset income from the business.  In this video we are going to review:

1) What vehicle expenses can be deducted: Mileage, insurance, payments, registration, etc.

2) Business Use Percentage

3) Buying vs Leasing a Car Deduction Options

4) Mileage Deduction Calculation

5) How Depreciation and Bonus Depreciation Works

6) Depreciation recapture tax trap

7) Can you buy a Ferreri through the business and deduct it? (luxury cars)

8) Tax impact if you get into an accident and total the vehicle 

The Social Security Administration recently announced that the cost-of-living adjustment (COLA) for 2025 will only be 2.5% for 2025. That is a much lower COLA increase than we have seen in the past few years, with a COLA increase of 3.2% in 2024 and an increase of 8.7% in 2023.  According to the Social Security Administration, the 2.5% increase in 2025 will result, on average, in a $50 per month increase to social security recipients.

When you separate service from an employer, you have to make decisions with regard to your 401K plan.  It’s important to understand the pros and cons of each option while also understanding that the optimal solution often varies from person to person based on their financial situation and objectives.  The four primary options are:

1)      Leave it in the existing 401(k) plan

2)      Rollover to an IRA

3)      Rollover to your new employer’s 401(k) plan

4)      Cash Distribution

Picking the right stocks to invest in is not an easy process but all too often I see retail investors make the mistake of narrowing their investment research to just stocks that pay dividends.   This is a common mistake that investors make and, in this article, we are going to cover the total return approach versus the dividend payor approach to investing. 

There is a sea change happening in the investment industry where the inflows into ETF’s are rapidly outpacing the inflows into mutual funds.  When comparing ETFs to mutual funds, ETFs sometimes offer more tax efficiency, trade flexibility, a wider array of investment strategies, and in certain cases lower trading costs and expense ratios which has led to their rise in popularity among investors.  But there are also some risks associated with ETFs that not all investors are aware of……..

While pre-tax contributions are typically the 401(k) contribution of choice for most high-income earners, there are a few situations where individuals with big incomes should make their deferrals contribution all in Roth dollars and forgo the immediate tax deduction.

The Fed cut the Federal Funds Rate by 0.50% on September 18, 2024 which is not only the first rate cut since the Fed started raising rates in March 2022 but it was also a larger rate cut than the census expected. The consensus going into the Fed meeting was the Fed would cut rates by 0.25% and they doubled it.   This is what the bigger Fed rate cut historically means for the economy

The most common questions that I receive when clients are about to purchase their next car is “should I buy it or lease it?”  The answer depends on a number of factors including how long do you typically keep cars for, how many miles do you drive each year, the amount of the down payment, maintenance considerations, or do you have any teenagers in the family that will be driving soon?

A question I’m sure to address during employee retirement presentations is, “How Much Should I be Contributing?”.   In this article, I will address some of the variables at play when coming up with your number and provide detail as to why two answers you will find searching the internet are so common.

There are special non spouse beneficiary rules that apply to minor children when they inherit retirement accounts.  The individual that is assigned is the custodian of the child, we'll need to assist them in navigating the distribution strategy and tax strategy surrounding they're inherited IRA or 401(k) account.  Not being aware of the rules can lead to IRS tax penalties for failure to take requirement minimum distributions from the account each year.