“Your Financial Choices” The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP, AEP. This week Laurie will discuss articles she has written for LV
Woman magazine and looking for the financial benefits.
Laurie will take your calls on this topic and other inquiries this week. 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 and Phillipsburg area; and, it is broadcast on FM 93.7 in the Fogelsville and 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.
One of the most
exciting events in sports is a “pennant race,” assuming your team is in
it. At the beginning of the season, I
was hoping for merely a winning season for the Pittsburgh Pirates. With that objective met (last week), the next
objective is to make the playoffs and their “magic number” to be a wild-card
team in the playoffs is 6 – any
combination of Pirates victories or Washington National losses totaling 6 will
result in a playoff spot. Yes, I realize
the Pirates are one game behind the St. Louis Cardinals for the National League
Central Division. But, if you know anything
of the past several years of Pirates second half collapses, you know why I am
only cheering for the wild-card playoff spot (for now!). 11 games remain with plenty of opportunity of
both the thrill of victory and the agony of defeat.
The stock market jumped sharply last week, making up
for a lack of trading volume with enthusiastic price bidding. The likelihood of
an attack on Syria faded, and investors turned festive, sending share prices up
2% to 3%. Stocks completed a rare seven-consecutive-day win streak last
Wednesday.
A
few weeks ago, a U.S. missile attack on Syria seemed imminent, but that’s on
hold after Moscow-brokered talks began last Thursday on a plan for Syria to
surrender its chemical weapons. With U.S. sabers sheathed for now, investors
are calmer, but the ups and downs in these talks will probably lend some
unwelcome volatility in the next few weeks.
To
some extent, last week’s big rally was also a function of the growing
acceptance of a bullish view that the Federal Reserve will not remove as much
bond-buying stimulus as it signaled back in June. The Fed’s $85 billion in
monthly bond buying has been a major factor in the stock market’s rally over the
past two years by keeping interest rates artificially low.
The Dow Jones Industrial Average climbed 454 points,
or 3%, to 15,376.06. It’s down 2% from record highs set last month. The
Standard & Poor’s 500 index gained 33 points. That’s about 1% below the
all-time high of 1709.67 hit on Aug. 2. The tech heavy Nasdaq Composite index
gained 1.7%, or 62, to 3722.18.
“I’m getting a sense that the market believes
the Fed tapering will be lighter than previously thought,” says Joseph
Amato, president of fund manager Neuberger Berman. The Fed’s policy-setting
committee meets Sept. 17-18, and that “will clearly be the driver of
near-term market sentiment,” he says.
In general, the tapering consensus appears to be
coalescing around an expectation that the Fed will indicate a $10 billion to
$20 billion reduction in bond buying. That would be much less than the $40
billion curtailment that the Fed signaled last June. If the Fed meets market
expectations, that will probably send stocks higher, Amato adds.
Brian Reynolds, chief market strategist at floor
broker Rosenblatt Securities, agrees. Such an outcome would likely push the
S&P 500 index through the 1700 level, where it has met some resistance in
the run-up of the past two weeks.
Stocks
haven’t been able to top the August high because traders are pulling in their
horns ahead of the Federal Open Market Committee meeting. If the Fed meets
consensus, the old highs will be taken out in a few weeks, Reynolds predicts.
He calls scenarios where the Fed delays any tapering
or where it follows through on the larger $40 billion reduction “low
probability outcomes.” In the former case, the market would probably bolt
higher, but in the latter case, there would likely be a “big
selloff.” (Source: Barrons Online).
The U.S. Department of the Treasury and the Internal Revenue
Service (IRS) last week ruled that same-sex couples, legally married in
jurisdictions that recognize their marriages, will be treated as married for
federal tax purposes. The ruling applies regardless of whether the couple lives
in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does
not recognize same-sex marriage.
The ruling implements federal tax aspects of the June 26 Supreme Court decision invalidating a key provision of the 1996 Defense of Marriage Act.
Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.
Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.
Legally-married same-sex couples generally must file their 2013 federal income tax return using either the married filing jointly or married filing separately filing status.
Individuals who were in same-sex marriages may, but are not required to, file original or amended returns choosing to be treated as married for federal tax purposes for one or more prior tax years still open under the statute of limitations.
Generally, the statute of limitations for filing a refund claim is three years from the date the return was filed or two years from the date the tax was paid, whichever is later. As a result, refund claims can still be filed for tax years 2010, 2011 and 2012. Some taxpayers may have special circumstances, such as signing an agreement with the IRS to keep the statute of limitations open, that permit them to file refund claims for tax years 2009 and earlier.
Additionally, employees who purchased same-sex spouse health insurance coverage from their employers on an after-tax basis may treat the amounts paid for that coverage as pre-tax and excludable from income.
How to File a Claim for Refund Taxpayers who wish to file a refund claim for income taxes should use Form 1040X, Amended U.S. Individual Income Tax Return.
Future Guidance Treasury and the IRS intend to issue streamlined procedures for employers who wish to file refund claims for payroll taxes paid on previously-taxed health insurance and fringe benefits provided to same-sex spouses. Treasury and IRS also intend to issue further guidance on cafeteria plans and on how qualified retirement plans and other tax-favored arrangements should treat same-sex spouses for periods before the effective date of this Revenue Ruling.
Other agencies may provide guidance on other federal programs that they administer that are affected by the Code.
Revenue Ruling 2013-17, along with updated Frequently Asked Questions for same-sex couples and updated FAQs for registered domestic partners and individuals in civil unions, are available today on IRS.gov.
Treasury and the IRS will begin applying the terms of Revenue Ruling 2013-17 on Sept. 16, 2013, but taxpayers who wish to rely on the terms of the Revenue Ruling for earlier periods may choose to do so, as long as the statute of limitations for the earlier period has not expired.
Most of the time, the U.S. stock market
looks to 3 factors to support its upward trend – let’s grade each of the
factors:
CONSUMER
SPENDING: I grade this factor a C (neutral).
THE
FED AND ITS POLICIES: I continue to grade this factor an A+ (extremely favorable) because the
FED cannot do much more than it is doing to support the stock market and asset
prices.
BUSINESS
PROFITABILITY: I graded this factor an A (very favorable).
NOTE:
the above grades are unchanged from last week.
Fed
officials want to start scaling back their $85 billion-per-month bond-buying
program this year and could take a small step in that direction at their policy
meeting Sept. 17-18. But the economic data in recent months have been ambiguous
and new threats to the economy and markets loom, which could prompt officials
to wait longer before acting.
Last week, U.S. Stocks increased, Foreign Stocks
decreased, and Bonds were unchanged. During
the last 12 months, STOCKS outperformed BONDS.
LAST WEEK -Here is a look the cause of the
volatility created this week by hedge funds, institutions, and those we call
“traders.”
Returns through 9-6-2013
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds- BarCap Aggregate Index
-.9
-3.6
-2.5
2.5
4.6
4.6
US Stocks-Standard & Poor’s 500
1.4
17.8
18.2
16.9
8.3
7.1
Foreign Stocks- MS EAFE Developed Countries
2.7
8.7
17.5
5.2
.8
4.7
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.
“Your Financial Choices” The show airs on WDIY
Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s
Laurie Siebert CPA, CFP, AEP. This week Laurie
and guest Bernie Story, President and CEO of the Lehigh Valley Community
Foundation, will discuss: “A way to
give.”
Laurie and
Bernie will take your calls on this topic and other inquiries this week. 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 and Phillipsburg area; and, it is
broadcast on FM 93.7 in the Fogelsville and 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.
