Valley National Financial Advisors provides one-stop financial planning. That means that our team is here to support our clients throughout their financial lives, but also in planning for their eventual transfer of wealth. Maybe you are familiar with how our advisors integrate estate planning, but did you know that our team also provides Trust Services?
Valley National Trust Services is a Trust Representative Office of National Advisors Trust Company, FSB. This means that our team has all the resources of a professional trust company and the ability to coordinate and manage trust services locally for our clients. We work directly with the attorney of your choice to help facilitate the trust and we manage the assets/accounts.
by Jaclyn Cornelius CFP®, EA, Vice President In line with the giving season, many of us think about giving to our children, grandchildren, nieces and nephews and possibly even to our extended family or friends’529 plans as holiday gifts. A 529 Plan is a college savings plan that offers federal tax benefits such as five-year gift tax averaging and tax-free qualified distributions (as long as the plan satisfies a few basic requirements). Some states offer state income tax incentives as well. 529 plans may also be used to save and invest for K-12 tuition in addition to college costs. You can invest in any state 529 plan, not just your own state’s 529 plan and use the dollars invested to pay for college costs at any qualified college nationwide.
If you are a Pennsylvania resident, you can receive an income tax deduction for contributions made to any 529 Plan (limits apply). If you are a New York resident, you can receive a state income tax deduction if you contribute to a New York qualified 529 plan (limits apply). An independent company (Morningstar) recently released their analyst ratings for 2018 which provided reviews of over 60 of the largest 529 Plans. End of year is a good time to discuss the idea of reviewing your existing 529 Plans and giving levels (or discussing with your financial advisor if establishing one makes sense for your situation).
by Jessica Goedtel, Associate Financial Advisor The IRS recently released their cost of living adjustments for 2019.
A few items to note:
The maximum 401(k) contribution has increased to $19,000, from $18,500. The catch-up contribution for those ages 50 and over remains at $6,000.
The annual IRA contribution amount has increased to $6,000 from $5,500. The catch-up contribution remains the same at $1,000. This is the first time since 2013 that this limit has increased.
The overall limitation for defined contribution plans increased by $1,000 to $56,000.
In addition, the income brackets that determine eligibility for certain types of IRA contributions, such as Roth IRAs, have been increased for inflation. More information can be found at the official IRS release. READ MORE
This is a great time to review your current retirement savings strategies to make sure you are taking full advantage of your tax deferral options.
At the end of last year, Congress passed the Tax Cuts and Jobs Act, the largest reform in the past 30 years. Proactive year-end tax planning may help reduce your overall tax burden for 2018 or alert you to taxes due.
A few tips and items you may want to consider:
Tax brackets have been reduced and the withholding tables have been adjusted. As a result, less tax is being withheld from each paycheck. We recommend that you review your current paystub to confirm if you are having adequate amounts withheld so that you have enough paid in to avoid underpayment penalties.
The Tax Act also made a number of changes related to deductions. The standard deduction was increased to $24,000 for taxpayers filing jointly and $12,000 for single filers. In addition, some of the itemized deductions have been reduced or eliminated. Real Estate and State and Local taxes now have a $10,000 limit and miscellaneous deductions such as investment expenses and unreimbursed business expenses have been eliminated. As a result, you may no longer itemize your deductions. Personal exemptions for yourself and dependents have also been eliminated. We recommend reviewing your deductions to see how you will be impacted by these changes.
Now is also a good time to review your taxable investment portfolio to understand the tax consequences of this year’s market activity. Now may be a good time to harvest unrealized losses or realize gains if you are in a low tax bracket as it could be taxed at 0%.
If you are age 70 ½, subject to Required Minimum Distributions (RMD) from your IRA and are charitably inclined, you may still be able to take advantage of the Qualified Charitable Distribution rules in using some of your RMD for your charitable giving. Especially if you don’t itemize, this provides a tax benefit you would not have received.
Senior Vice President Laurie A. Siebert CPA, CFP®, AEP® authored an article for the Pennsylvania Institute of Certified Public Accountants (PICPA) CPA Now Blog regarding Unclaimed and Abandoned U.S. Savings Bonds for PA residents.
A recent notice to Pennsylvania residents regarding U.S. savings bonds appeared in local publications. The alert informed bond owners of a suit Pennsylvania was filing to take title to abandoned, unclaimed, and matured savings bonds. READ THE FULL ARTICLE
If you have not reached full retirement age and you are within 12 months of when your benefits started, you can submit the Social Security Form SSA-521 explaining why you want to withdraw your application. Keep in mind, if your request is approved you will be required to pay back all the benefits you and your family received to that point. Be aware that you are limited to one withdrawal per lifetime.
If you have reached full retirement age, but are not yet age 70, you can request to have your retirement benefit payments suspended. This will allow the benefits to accumulate 8% annual delayed credits, albeit on the reduced amount. This type of request does not require an official form – you can make it orally or in writing. Carefully consider some rules the SSA outlines as well, made effective in 2016.
It is important that you consult with your financial advisor before making these types of decisions to be sure that you understand all the ramifications of your financial choices. You can read more about these options on the Social Security Administration website at ssa.gov.
by Mae Gerhart, Tax / Financial Planning Professional Investment and charity scams occur often after a natural disaster. In the aftermath of Hurricane Florence, it is important that well-meaning individuals looking to support the relief effort do some due diligence. Before you make an investment or charitable contribution, you should verify that the opportunity is legitimate and that your money is going to have the desired result.
FINRA provided a warning last week with some details about how to avoid investment scams promising huge gains around stocks associated with clean-up, rebuilding, and breakthroughs in science and technology that purport to address current and future flood-related issues. They may pressure you to invest and reaching out to you directly. Do your research even if they have a familiar sounding or respectable name. Read the alert here.
Charity scams follow similar tactics and tend to stick around longer. In these cases, the money you may intend to benefit the charitable cause, can end up being used for other purposes. In 2012, a watchdog group found that one charity failed to spend $56 million it had raised on actual services and instead spent nearly all of it on marketing costs.
Sites like GoFundMe or YouCaring provide crowdfunding for various causes, many of which are not registered charities. These sites also collect fees from a percentage of your contributions – sometimes upward of 10% or more – to support their business model.
By researching various charities through charity rating sites such as give.org, charitywatch.org, or guidestar.org, you will be able to look at individual charity’s most recent reports and ratings. These sites can show you how much of your actual contribution will go towards the end goal versus how much will be used for administration expenses.
Finally, keep in mind, that due to the Tax Cuts and Jobs Act of 2017, not everyone will receive a tax benefit from making a charitable donation. Advance tax planning with your financial advisor will help you figure out if the donations you desire to give also aligns with your financial plans.
Starting on September 21, 2018 the Federal Trade Commission (FTC) will be putting a new credit file protection layers in place that will allow consumers to contact any of the three major credit reporting agencies and request a freeze on their credit files free or charge.
The Economic Growth, Regulatory Relief, and Consumer Protection Act stipulates that the reporting agencies – Equifax, Experian, and TransUnion – have until the next business day to put the requested freeze in place. Consumers can also request to lift that freeze at any time and the agencies will have to comply within an hour.
To fully freeze your credit, you must do so with all three credit reporting agencies. When freezing your credit, you will create a pin or passcode. Should you unfreeze your credit report, you will need that pin or passcode to prove your identity.
National 401(k) Day has been celebrated on the Friday after Labor Day since 1996 as a day to offer information and communication about ways to save for retirement. Our Vice President Joe Goldfeder shares three steps for a 401(k) Checkup. WATCH THE VIDEO
In February this year federal regulators introduced the “Trusted Contact” person as a form of protection for the investing public. The trusted contact person is someone our advisors can reach out to if he/she suspects diminished capacity and the possibility of fraud. Our CEO offers an overview of the trusted contact person and an update on what to expect from your VNFA financial advisory team on this topic. WATCH THE VIDEO | READ MORE
