Are You
Prepared For “One of the Largest Tax Reporting Changes for Investors in over 20
Years”*?
With new IRS regulations going into effect, your brokerage account is required to report your cost basis on “covered securities” to both you AND THE IRS. The IRS is expected to double-check both the sales and cost of stocks, bonds, and mutual fund sales on your income tax return.
That does not sound so tough – so, what’s the problem? Well, leave it up to the IRS to make the tax forms complicated! Many investors will be required to prepare up to 6 additional forms to attach to Schedule D for their stock, bond or mutual fund sales.
Our tax prep staff has you covered. We attended a 2 hour webinar last week on this topic and a two day tax update workshop in December. Not only do we know how to fill out the new forms, we have the entire cost basis for your investments purchased in accounts held at Valley National.
For more information about the new IRS regulations, click:
Contact my office if you have questions about completing your own tax return – we can provide an on-line tax center and an easy to use brochure featuring an overview of the revised reporting requirements.
*As quoted by Deanna Flores of KPMG, an international accounting firm.
I would like to give my children solid financial advice. Do you have any recommendations on what to tell them?
Answer:
“Pay yourself first”. Many consumers have heard that term but fail to implement it as a strategy in their own personal finance. A great way to save for a financial goal (or retirement) is to set up a routine, automatic periodic investment program into a solid growth and income mutual fund. It’s less complicated than its name. Just specify the amount per month (say $100) that you think you can afford. The amount can be withdrawn automatically from your checking account. And, try to save at least 25% of annual bonuses or windfalls by writing a check and depositing using a tear off coupon-type deposit slip you receive after the first routine deposit. This investment style, sometimes referred to as “dollar cost averaging” is a good approach to investing because you end up purchasing more shares when the price of the fund is low. It’s a proven technique, but remember, dollar cost averaging does not assure a profit or protect again loss in declining markets.
The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP. This week Laurie will discuss:
“Get ready for some new tax filing forms!!”
Laurie will take your calls on this subject and other financial planning topics at 610-758-8810. This show will be broadcast at the regular time. WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and, it is broadcast on FM 93.9 in the Easton/Phillipsburg area; and, it is broadcast on FM 93.7 in the Fogelsville/Macungie area – or listen to it online from anywhere on the internet. For more information, including how to listen to the show online, check the show’s website www.yourfinancialchoices.com and visit www.wdiy.org.
I am proud to not only live in Bethlehem, PA but also
maintain my main office here, too. My fellow residents of Bethlehem are
proud of its progress-and the attention it receives nationally and
internationally. Fellow Lehigh Valley residents are pleased to see the
renaissance permeate throughout the entire valley. Bethlehem is a
microcosm of America. It was founded by individuals seeking freedom to
express their religious views. Many possessed highly skilled
craftsmanship which helped form an industrial base. This eventually grew
to a world renowned heavy industrial center. Bethlehem then transitioned
through the disassembling of America’s industrial base in the last
quarter-century to emerge with a broad based economy, fast becoming a regional
center for the arts, entertainment and historical/cultural programming.
Arts, entertainment and historical/cultural programming are
making a big impact within Bethlehem and the Lehigh Valley. Employers are
choosing to locate their companies in the Lehigh Valley over competitors, in
part, because of these. Three new hotels were opened in Bethlehem last
year, the only city its size to do so in Pennsylvania-and one of very few in
America. As Jeff Parks, President of Bethlehem-based ArtsQuest was quoted
in the Morning Call on Saturday:
“What we are doing at ArtsQuest is
simply not being done anywhere else. We are, in many respects, on the
cutting edge of arts and cultural programming in communities of less than a
million people.”
Personally, if I am going to “Talk the talk” then I will
“walk the walk” by increasing my involvement in my community. I fulfill
this community service ambition, in part, by serving on both the Historic
Bethlehem Partnership Board and the ArtsQuest (Musikfest, SteelStacks, &
The Banana Factory) Foundation Board. Perhaps, you too would like to
increase your community involvement. Click on the hyperlinks below to
explore membership or other ways of involvement in these two (which are just a
couple examples of many fine organizations in the LV):
Through the many discussions with Bethlehem and Lehigh Valley
clients and the involvement on the Historic Bethlehem and ArtsQuest Boards, I
am developing a 30,000 feet look at what is happening in Bethlehem and the
greater Lehigh Valley– and its moving in the right direction. Perhaps, if
Stanley Kubrick were here, he might say, “The most extraordinarily amazing
things are about to happen”.
The last continue to be first, as some of 2011’s most
hated stocks, the financials in particular, led the market to another week of
gains. Equities rose almost 1% last week in decent trading volumes.
Investment banks and brokerage firms—down some 44% last
year—were again among the leading groups and are up about 10% so far in 2012.
Stocks fell Friday, but still managed to finish above the day’s lows.
The year is young, but it might not be a coincidence
that financials turned on a dime Jan. 2. There appear to be some preliminary
moves by institutional investors to raise their exposure to beaten-up
financials.
The Dow Jones Industrial Average, rose 62, or 0.5% on
the week, to close at 12,422.06. Dow component Bank of America (ticker: BAC) is
the leader of the pack, up 19% in 2012. The Standard & Poor’s 500 index
rose 0.88% to 1289.09, and the Nasdaq Composite gained 1.4% to 2710.67.
While the travails of the European debt crisis hurt
Friday—France was downgraded by Standard & Poor’s—the profit-taking was
minimal, points out Marc Pado, U.S. market strategist for Cantor Fitzgerald.
Last year’s dogs, the economically sensitive groups like financials, autos and
materials, are leading in 2012.
“You would have expected that in the first week,”
he adds, but Pado asserts this week’s second rise means it’s more than a
bounce. Institutions are taking a new look at financials and are reducing the
underweight of those stocks in their portfolios, he says.
Those same investors, adds Tim Ghriskey, chief
investment officer at Solaris Asset Management, are trying to decipher which
banks will be allowed by the Federal Reserve to raise dividends and buy back
stock after April’s stress test.
Another possible rally support could come from pension
funds, which are having to reallocate assets, adds Ghriskey, because yields are
so low.
NEWSPAPERS ARE FILLED WITH HORROR stories about the
pension-fund woes of the public sector. There are cities and states around the
country that might have to fire policemen and firemen to cut expenses and meet
their onerous pension obligations.
Corporate America’s growing pension problem, however,
appears to be off investor radar screens right now. That perhaps won’t last
much longer, as the close of 2011’s company books means their pension-fund data
will be updated relatively soon. During the first-quarter earnings season,
there could be some nasty surprises in store for investors as some companies
reveal a need for unexpectedly large contributions later this year to their underfunded
pension plans, if plan performance has worsened.
In a recent report, Credit Suisse analyst David Zion
took a look at the pension-funding disclosures of the companies in the S&P
500 index and estimates that as of year-end 2011 these plans in aggregate are
underfunded to the tune of roughly $458 billion. That’s equivalent to 3% of
U.S. gross domestic product. The pension pothole continues to get bigger, as
plan funding levels have fallen to a new low of 74%, he figures, compared with
S&P 500 companies having their pension plans 84% funded and a $246 billion
hole about one year ago(Source: Barrons Online).
Last week, in an unusual occurrence, U.S. Stocks, Foreign Stocks and Bonds ALL increased. During the last 12 months, BONDS outperformed STOCKS.
Returns
through 1-13-2012
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds-
BarCap Aggregate Index
.6
.4
8.0
6.7
6.6
5.7
US
Stocks-Standard & Poor’s 500
.9
2.6
2.6
11.8
.1
3.2
Foreign
Stocks- MS EAFE Developed Countries
.6
.2
-16.4
5.9
-7.3
2.2
Source: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized excluding dividends.
