Daily Archives: December 20, 2017

Heads Up!

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After a week of intense negotiations, the Tax Bill has passed by both the Senate and the House with expectations the President will sign ASAP. This final Tax Bill carries a January 1, 2018 effective date for most provisions. It will impact virtually every individual and business on a level not seen in over 30 years according to the tax specialists at CCH Wolters Kluwer.

For the vast majority of individual taxpayers, the general recommendation at this time is to accelerate payment of deductions into 2017 and delay the receipt of income into 2018 when possible. Thus, making charitable contributions NOW, paying state and local taxes NOW, and payment of medical bills NOW makes sense.

There are many complications in the hundreds and hundreds of pages of the Tax Bill. We believe the best approach is provide basic information to you today and field your questions as they arise. To get started, we provide a Tax Briefing from CCH Wolters Kluwer – click here for the Tax Briefing, or visit our website to find the link at valleynationalgroup.com/tax.

Our tax software will be updated as soon as possible according to our providers’ time lines. As soon as the software is updated we can provide detailed answers to your questions. Until that time, we can provide general guidance and advice. Feel free to contact us – we have the answers!

Update – Washington

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The U.S. stock market has jumped since the November 8th election. We identified 4 initiatives on which the U.S. stock market is speculating to be successfully accomplished early in the Trump administration. What will happen next? It is still to be determined!

The 4 initiatives will have a tremendous influence on the “Heat Map” which forms the basis of our forward looking view of the U.S. economy. We consider the success or failure of the 4 initiatives to be “leading” indicators for the Heat Map.

Below are the 4 Trump administration initiatives upon which the stock market is speculating and what progress, if any, has been made:

  1. Tax cuts and tax reforms benefiting most individuals and businesses. THE SENATE AND HOUSE PASSED THE TAX BILL AND THE PRESIDENT HAS INDICATED HE WILL SIGN ASAP.  CUMULATIVE PROGRESS TOWARD GOAL: 100%

  2. Infrastructure spending of up to $1 Trillion over the upcoming 7 to 10 years. COMPLETION OF TAX REFORM POINTS TOWARD PROGRESS IN THIS AREA, TOO.  CUMULATIVE PROGRESS TOWARD GOAL: 35%

  3. Affordable Care Act amendment, reform or reorganization. THE TAX BILL REPEALS THE AFFORDABLE CARE ACT INDIVIDUAL SHARED RESPONSIBILITY REQUIREMENT MAKING THE PENALTY AMOUNT $0. THIS IS EFFECTIVE FOR PENALTIES ASSESSED AFTER 2018.  PROGRESS TOWARD THIS GOAL IS 35%.

  4. Roll back of government regulations and Executive Orders considered to be difficult for businesses. ROLL BACKS HAVE CONTINUED. LAST WEEK THE INTERNET “NET NEUTRALITY” RULES WERE SET ASIDE. CUMULATIVE PROGRESS TOWARD GOAL: 55%

As the action happens in Washington on these 4 initiatives, don’t be surprised if the political “tug and pull” contest results in a wilder than normal stock and bond market.

We will continue to report in future issues on the progress on each initiative.

The “Heat Map”

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Most of the time, the U.S. stock market looks to 3 factors (call them the “pillars” which support the stock market) to support its upward trend – let’s grade each of the pillars.

CONSUMER SPENDING: This grade is a A- (favorable), an increase due to strong Holiday shopping indications accompanied by strong job growth and consumer sentiment.

THE FED AND ITS POLICIES: This factor is rated C- (Below average). The FED raised rates last week but indicated. Experts are forecasting either two or three more hikes in 2018.

BUSINESS PROFITABILITY: This factor’s grade is A- (very favorable).

OTHER CONCERNS: The “Heat Map” is indicating the U.S. stock market is in OK shape ASSUMING no international crisis. On a scale of 1 to 10 with 10 being the highest level of crisis, we rate these international risks collectively as a 5. These risks deserve our ongoing attention.

“Your Financial Choices”

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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:

“Gift giving for family-ways and benefits.”

Laurie will take your calls on this or other topics.  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– 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.