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You’ve likely heard about the changes to the original SECURE Act of 2019, aptly named the SECURE Act 2.0. But unless you’ve sat down to read the 350-page document – I know. In your spare time, right? – you might not know how it will affect you.

Here are four key takeaways that you should be aware of:

Maximum Increase in Retirement Accounts

Beginning in 2025, those retirement plan participants who are aged 60 to 63 can save even more in their 401(k), 403(b), or 457(b) plans. Currently, participants who are 50 or over can save an additional $7500 over the maximum contribution of $22,500. Starting in 2025, those aged 60 to 63 can save an *additional* 50% of the catch-up.

For example, if the catch-up amount stays at $7500, a 60-year-old can save an additional $3750. Additional to note: If your income is in excess of $145k, your catch-up contributions must be made as Roth (after-tax) contributions.

Student Loan Payments and Matching 401(k) Contributions

Today, many employees are missing out on the funds employers match when they make a 401(k) contribution. Beginning in 2024, employers can provide those matches based on student loan payments. Stated a different way, your student loan payments count as if you made a contribution to your 401(k) and your employer will match those funds in your 401(k).

Yahoo Finance provides this example of how this works:

The situation: To give a better visual imagine Dave, a fresh college graduate with student loan debt starts a new job that offers a salary plus benefits. One of the benefits is a 3% company match. Traditionally this match applies to his retirement contribution, so when Dave contributes 3% of his salary to his company-sponsored 401(k), he’s met with an additional 3% from his company.

The problem: When Dave contributes to his 401(k), it puts him in a great spot for retiring on time down the road, but he now can’t afford to save for a house and pay down his student loan debt at the same time. He has to choose one or the other. One leaves him as a prolonged renter spending money on an asset that he’ll never own; the other leaves him extending student loan payoff and accruing additional interest.

The solution: Student loan matching allows his company to match his student loan payments instead of a retirement contribution. So the result looks like this:

Dave is able to pay down his student loans avoiding additional interest charges. Dave can get a jump start on saving for a home preserving thousands on potential rent. Dave gets a compounding effect from his company’s retirement plan contributions.

Unused 529 Plan Funds Can be Rolled into Roth IRAs

I’m often asked by parents who are considering opening a 529 college savings account for their child, “What if they don’t use it?”

Starting in 2024, parents and other loved ones no longer need to worry, at least for $35,000 worth. If the 529 has been open for at least 15 years, individuals will be allowed to roll up to $35k from a 529 to a Roth IRA in the name of the student beneficiary.

Great news for those of you who have “lost” old 401(k) accounts

Another worry I often hear is regarding old employer retirement accounts. Maybe you had a modest amount in your 401(k) and then left that job. Perhaps you’ve moved many times, and that old company has merged with another. It can be very difficult to find YOUR money.

The SECURE Act 2.0 will establish a “Lost and Found” for old retirement accounts. The Dept of Labor has two years to get this done, so in the meantime, if you’ve lost an account, let me help you find it!

I know that this new legislation can be hard to navigate. We all look at this information and ask the question, “What does this mean for ME?” If you have questions about these changes and want to help ensure you’re not missing out on anything that might benefit you, let’s talk.

We’re all feeling that holiday buzz that has nothing to do with wine consumption (or maybe it does) and are counting the days until we can check out for the holiday season.

But before you do, I have three simple tasks for you to do so you can really relax and enjoy your time with friends and family…without feeling like you have something hanging over your head.

Tax loss harvesting – time to talk to your advisor!

If you have an investment account (outside of retirement accounts) that has positions that have lost money in 2021, you may be able to offset short-term capital gains in other positions. This is a strategy in which it’s a good idea to consult with your financial advisor. Make that appointment!

Use Flex Spending Account dollars and/or vacation time that won’t roll over.

Take a minute to check your employer benefits for dollars that won’t roll over. Remember that money you have deferred out of your paycheck into a Flex Spending Account (FSA) does not roll over into the new year and must be used by the end of 2021 – don’t leave that money on the table!

Also, check your company policy on vacation days or general Paid Time Off. Many have policies regarding how much can be carried into the new year. Again, your vacation time is part of your compensation, so you don’t want to leave that money back in 2021.

Check allocations in investment accounts and rebalance.

You set an asset allocation and then immediately the performance of your investments move out of whack. Different investments perform in unequal ways, e.g. your large cap fund has gained more than your emerging markets fund. Rebalancing moves those investments back to an allocation you desire. This is important in both retirement and nonretirement accounts. Another one that your advisor can help with!

These dates are arbitrary, and you can certainly create your own deadlines (the sooner you call your advisor, the better). Completing these simple tasks will help you breathe a little easier over the holiday season and get you started on the right foot for the new year.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

It’s natural during the holiday season to think about helping others in need or contributing to worthy causes. Reviewing a list of charities is one way to go, but you might also consider another.

Donor-Advised Fund

A donor-advised fund is a private fund administered by a third party and created for the purpose of managing charitable donations on behalf of an organization, family, or individual.

Thanks, Investopedia. But what does that mean?

Donor-advised funds aggregate contributions from multiple donors, and then distribute them to charities. You can donate one amount to a DAF and then direct which charities will receive donations and when. Similar to giving directly to charity in that the funds are a complete gift (you can’t get the money back), these contributions are tax deductible to a qualified organization, and can accept donations other than cash, such as stocks.

There are community foundations that focus on local charities, faith-based DAFs, and public foundations that concentrate on charities that focus on a specific issue or region. The question is…is this the right solution for you?

The Pros & Cons

The good news is that you can give to multiple organizations with just one donation to one administration. In other words, no need to track multiple receipts.

The other benefit is that you can donate in one year for tax purposes, but then time the actual donation to the charity for another year.

DAFs also have staff members who are well-versed in the charities of focus and can assist you with your selections if you don’t have specific organizations in mind. This means you know your contributions will be going to reputable charities and the funds will be used wisely. Less research for you!

However, there are a few “cons.” Donor-advised funds charge administration fees and therefore profit from your donation – money that could otherwise be going directly to your charity. There could also be high minimums ($5k-$25k) and if you don’t direct your donation to a charity, it can languish unused. It might grow in value, but it’s not benefitting society as you intended.

What Should You Do?

Charitable giving is a highly individual decision. While it may be personally important for you to “give back,” it’s also important to make sure your giving is within your budget.

If you choose to donate to organizations outside of a donor-advised fund, there are a few other things to look for:

Which solution is right for you? That’s where I can help. We’ll take a look at your tax obligation, possible strategies for donating appreciated stock, and how any charitable giving might have an impact on your retirement plan.

If you’ve already filed your taxes…congratulations! You can check one major “to-do” off your list for a while. Collecting and organizing all that information is time consuming and something we all dread every year – so why not make the most of it?

When you put everything together for your accountant (or for some of you brave people out there, to file yourself), you’re taking a look at your life in reverse; what you’ve spent, what you’ve saved, what you’ve invested, and where you could possibly do better. The good news is that by doing that…you’re able to use that information to plan better for the future.

Here’s how the information you’ve gathered can do double the work for you:


This document shows dividends and capital gains. From this information you can answer the following questions:


Self Employed – 1099s

For my clients, the 1099 is where we start talking about their business structure; for example, are they a Sole Proprietor, LLC, or S-Corp? I find that some business owners aren’t always aware of all the retirement accounts available to them over and above an IRA. Things like Solo 401(k)s and SEP IRAs can help sock away a lot of money and make a client’s business much more attractive to potential employees. This is a great time to take a look at that.

Charitable Deductions

Many of us would love to be in a position to give back and some assume that will only happen after they’re gone. But looking at your tax return is a good time to answer these questions:

The Big Picture

I’ve detailed some specific documents that can help you take a look at your current financial situation to see where improvements can be made, but this is also the perfect time to pull together your investment accounts and ensure they’re titled correctly and that your beneficiaries are in order. I realize this is not something many people like to think about, but in doing this your heirs can avoid major complications down the road – like assets ending up in probate. Many financial advisors work with estate planning attorneys as well who can advise you accordingly.

Another thing to keep in mind are all of the recent tax law changes, which can be addressed by a financial advisor as well. It’s important to stay informed throughout the year so you’re ready to file for 2021.

Ready to make your past documents work for your future planning? Let’s discuss your options! CLICK HERE to make an appointment.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

If You Have Unrealized Losses

2020 was a wild ride for a lot of companies. If you have a stock or mutual fund in a taxable account that was on the losing end of this pandemic, consider selling (“realizing losses”) to offset any gains you have. Capital losses that exceed capital gains in a year may be used to offset ordinary taxable income up to $3,000 in any one tax year, and you can carry forward the remainder until the amount is exhausted.

If You Expect Your Income to Change

Perhaps you were furloughed this year, but still have funds to contribute to retirement for 2020. If you think your income will increase in the future, now is the time to embrace the Roth. You’ll pay taxes on the contribution at your current rate. When you take distributions in the future, while you are presumably in a higher tax bracket, they will not be taxed. This is also the time to consider converting existing Traditional IRAs or 401(k) to Roths. This move can have unintended consequences, like pushing you into a higher tax bracket, so proceed with caution.

You Are Able to Save More Money

If you are not maxing out your employee retirement plan or IRA, consider year-end a great time to remedy that as much as you can afford. Even just increasing your contribution by a percentage or two can have a huge impact on your retirement savings. Compounding is real, folks! If you are making the maximum allowable contribution, find out if you are eligible for a Health Savings Account.  You may be able to contribute $3,550 ($7,100 for a family) and an additional $1,000 if you are age 55 or over.

Taking just a little time to review year-end finances can make a big difference in the long run. As always, if you don’t know where to start or are confused about your options, consulting a CERTIFIED FINANCIAL PLANNER™ is a great place to start.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice .We suggest that you discuss your specific tax issues with a qualified tax advisor.

The annual meeting is rescheduled to sometime later this quarter and the family reunion is sometime next summer, but like certain holidays and your birthday you know you can always count on a few specific dates. It’s reassuring. One such day is Tax Day, AKA April 15. Yet, unlike a birthday this looming deadline tends to sneak up on you in the least enjoyable way. And even if Tax Day is hardwired into your brain (and all your digital and paper calendars), the fact of the matter is that sometimes it makes more financial sense to file for a tax extension than to file on Tax Day. Here are a few situations and tidbits of information where filing for an extension could make sense for your financial situation:

Gather your papers...and wits. Compiling all the tax documents and information necessary can be incredulously tedious. Whether you run your own business, freelance for a multitude of clients, had documentation arrive late, or had a lot of personal changes in the past tax year, it can pay off to afford yourself an extra few months to file.

Consequence free is the way to be. If there is even a reasonable doubt that buried beneath your stack of write-offs and documents there is the chance of missing the Tax Day deadline, file for the extension. There are no consequences to the individual or business filing and there are no penalties or fees. You may not be able to fill out your taxes in entirety by April 15, but be sure to file IRS Form 4868 (yes, just one!), Application for an Automatic Extension of Time, to get a six month window added to your timeline.

Skip the fees. You’re already paying taxes. You don’t want to have to pay the government MORE money. But, that’s exactly what’s happen when you miss the April 15 deadline without an extension filed, unless you can prove “reasonable cause” for not filing on time. (Reasonable cause relates to happenstances like the death of an immediate family member, tax documents destroyed in a disaster like a fire or flood, or intensive illness.) Plan on paying up to the tune for 5% every month on the “additional taxes owed” up to a cap of 25%. If you finally get that paperwork in but it’s after 60 days of the due date, you’ll face a penalty of all of your unpaid taxes or $135 (whichever is lesser).

Expat status. If you’ve moved across the pond (either one) in the past tax year it may be advantageous for you to nab a little extra time to file, especially if you haven’t qualified for the foreign earned income exclusion yet. This specialty exclusion can greatly reduce the taxes you need to pay. In this case resident aliens and U.S. citizens will want to file Form 2350 for the time needed to meet the physical presence or bona fide residence test.

Consult a financial advisor about obscure tax laws. The American tax system has all sorts of funky rules and regulations that impact how much you actually need to pay in taxes. A certified tax accountant or financial advisor is going to have the expert information you need in order to reduce total taxes due. For example, one of those obfuscated rules is that if you converted a retirement account over to a Roth IRA at any point during the tax year, but want to reverse the conversion, you can do so anytime before the tax return is due. Meaning, if you file for an extension, because of something like fallen investment values, you have six additional months to hit the undo button and save on taxes. 

Don’t be fooled. The term extension doesn’t mean you get skip out on paying anything. If you do file for an extension you have a couple options: the first (recommended) option is to pay the estimated taxes you owe by Tax Day. You likely have a good idea of what you owe given your documentation on hand and in relation to what you paid the year prior. The other option, is to file and not pay until your later due date. This option is not recommended unless completely necessary because of the interest and penalty percent on underpayments you’ll accrue for every month you’re late.



*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2014-2016 Advisor Websites.

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