Helping clients prepare for their financial future goes beyond getting to know them and understanding their goals. Plenty of work goes on behind the scenes. Our staff regularly attends continuing education and training. Most recently, training included raising awareness of vulnerabilities in sharing personal information. This IS something we can share – ways to limit your exposure:
Identifying numbers – avoid taking the bait over the internet or telephone when asked to provide identifying numbers such as driver’s license, Social Security, passport, etc.
Password and signatures – do not send documents containing your signature or passwords over unsecured email or other personal information that will help a scammer recreate your identity.
Addresses – our addresses are so readily identifiable today and if matched to personal information announcements such as vacations or events, we have opened ourselves to unwelcome visitors. Avoid announcing your schedule.
Current, previous or alternate names – again, readily identifiable information that a scammer may use to their advantage in becoming familiar with your past to provide security answers, such as maiden names.
Employment details – descriptions of your new job or promotions may target you for manipulation by those posing as vendors or co-workers to take advantage of your access to sensitive information. Don’t expose yourself before you even get started.
Demographics – a web search lets just about anyone know where you live but why advertise it? Social websites where you show your age, gender and lifestyle could invite others wanting to be part of it, including those with nefarious intentions.
History – similar to maiden names used in security questions, information about your hometown, old schools, addresses, hometown, employment can all be pieced together to create a fairly complete picture for impersonating you or compromising your security.
Appearance – back to social media and exposing your lifestyle. Those pictures of yourself can be snipped and used to create a fake profile. Further, they may expose others in the photos including family and friends. Think twice about being included in others’ photos that might get posted and announce your whereabouts or reflect your lifestyle. Tell your children as well.
Use common sense in sharing personal information virtually. Scammers are counting on innocent people not imagining the extremes to which they will go in taking advantage of identity vulnerabilities. Valley National Financial Advisors take securing your personal information seriously. We need your help in protecting it as well. With everyone doing their part, we hope to limit exposure to any compromise.
THINGS ARE BETTER THAN THE NEWS MEDIA WOULD HAVE YOU BELIEVE. Modern media is overwhelming pessimistic. They focus on sensationalism, scandal, gossip and tragedy. Modern news and media outlets “preferentially feed us negative stories because that is what our minds pay attention to.” Apparently there is a good reason for this; our senses bring in far more data than we can possibly process, and, because survival is the most important driving factor in our evolution, this data is fed first through an ancient sliver in the temporal lobe called the amygdala. The amygdala is our early-warning detector, sorting through data to see what might harm us. It is therefore entirely explicable that we preferentially look at negative news, and almost as obvious that profit-driven media outlets would capitalize on this instinct.
How and why the world is going to become a better place? Highly respected forward thinkers have studied trends and see a bright future particularly due to exponential technological growth. These trends show how life expectancy, global connectivity, access to resources and general quality of life are all on an upwards curve.
ANSWER: The purpose of this legislation is to provide a tax‐deferred savings vehicle for persons with disabilities. The tax‐deferred savings vehicle will be housed under Section 529 of the Internal Revenue Code, which provides the framework for what is commonly referred to as the 529 Education Savings Plan.
(2) What is a 529 Education Savings Plan?
ANSWER: A 529 Education Savings Plan is a tax‐deferred savings vehicle operated by a state or educational institution designed to help families set aside funds for future college costs. Note: A 529 Education Savings Plan is a tax‐deferred savings account already in existence. This legislation will create a new type of 529 Education Savings Plan called the 529‐ABLE Plan.
(3) What is a 529‐ABLE Plan?
ANSWER: A 529‐ABLE Plan is a tax‐deferred savings vehicle operated by a state or educational institution designed to help families set aside funds for future costs related to the disability of the beneficiary. The eligible disability expenses are outlined in Question #8 below.
ELIGIBILITY DETERMINATION
(4) What are the age requirements for individual beneficiaries?
ANSWER: There is no age requirement for the beneficiary of a 529‐ABLE Plan in the legislation. Individual states may impose certain age requirements.
(5) Are 529‐ABLE Plans available to any individual with a disability? How is the term disability defined?
ANSWER: Any individual who is receiving, deemed to be, or treated as receiving supplemental security income benefits or disability benefits under Title II of the Social Security Act. OR Any individual who has a medically determined physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 month or is blind, and provides a copy of their diagnosis signed by a physician.
ABLE ACT FAQs – 113th Congress — No one who qualifies for an ABLE account is able to use that eligibility to secure supplemental security income benefits or Medicaid.
TAX QUESTIONS
(6) Do beneficiaries of 529‐ABLE Plans pay any interest or taxes (federal or state) on assets accumulated within the account?
ANSWER: There is no federal taxation on funds held in a 529‐ABLE Plan. Assets can be accumulated, invested, grown and distributed free from federal taxes. Contributions to the accounts are made on an after‐tax basis, but assets in the account grow tax free and are protected from tax as long as they are used to pay qualified expenses. Individual states will ultimately determine how the funds are treated for state taxation purposes.
(7) Are there any tax benefits for those who contribute to a 529‐ABLE Plan?
ANSWER: No federal tax benefits are provided under traditional 529 Education Savings Plans or 529‐ ABLE Plans; however, individual states may provide tax benefits.
ALLOWABLE EXPENSES
(8) What are the qualified expenses that the funds accumulated in a 529‐ABLE Plan can be used for?
ANSWER: Funds can be used to support the following allowable expenses:
Education‐ including tuition for preschool thru post‐secondary education, books, supplies, and educational materials related to such education, tutors, and special education 6 services.
Housing‐ Expenses for a primary residence, including rent, purchase of a primary residence or an interest in a primary residence, mortgage payments, real property taxes, and utility charges.
Transportation‐ Expenses for transportation, including the use of mass transit, the purchase or modification of vehicles, and moving expenses.
Employment Support‐ Expenses related to obtaining and maintaining employment, including job‐related training, assistive technology, and personal assistance supports.
Health Prevention and Wellness: Expenses for health and wellness, including premiums for health insurance, mental health, medical, vision, and dental expenses, habilitation and rehabilitation services, durable medical equipment, therapy, respite care, long term services and supports, nutritional management, communication services and devices, adaptive equipment, assistive technology, and personal assistance.
Other Approved Expenses‐ Any other expenses which are approved by the Secretary under regulations and consistent with the purposes of this section.
Assistive Technology and Personal Support‐ Expenses for assistive technology and personal support with respect to any item described in clauses (i) through (vi).
Miscellaneous Expenses‐ Financial management and administrative services; legal fees; expenses for oversight; monitoring; home improvement, and modifications, maintenance and repairs, at primary residence; or funeral and burial expenses
(9) Are there any penalties for using funds accumulated through 529‐ABLE Plans for non‐qualified expenses?
ANSWER: Such distributions will be subject to a 10% penalty on the earnings portion of the non‐ allowable expense. In addition, all earnings would be subject to ordinary income tax.
ASSET ACCUMULATION & BENEFITS DETERMINATION
(10) Can an individual with a disability work and maintain a 529‐ABLE Plan?
ANSWER: Yes, as long as the individual meets the definition of disability irrespective of whether s/he is engaged in substantial gainful activity.
(11) Can an individual with a disability contribute to these plans from wages earned?
ANSWER: Yes, after required taxes are paid, earnings may be contributed to the account, just as any other contribution. For administrative purposes any contributions made by someone other than the account owner are treated as if the contribution was from the account owner.
(12) Do assets accumulated in 529‐ABLE Plans count toward asset/income means‐testing for determining eligibility into Federal benefits programs?
ANSWER: Assets up to $100,000 held in 529‐ABLE Plans are specifically excluded from the income and assets tests used to determine eligibility. This includes the current SSI eligibility requirements that prohibit beneficiaries from having over $2000 in assets at any one time.
(13) Do assets accumulated in 529‐ABLE Plans count toward asset/income means‐testing for determining eligibility in State benefits programs?
ANSWER: The bill(s) do not prohibit states from treating the accounts differently for programs funded FULLY with state funds.
(14) Are there any limits to the amount of funds that can be contributed to an ABLE Account during a certain period of time?
ANSWER: Contribution limits are set by the individual state or educational institution. For example, the State of Nevada allows a total contribution limit of $370,000 per beneficiary, while Virginia allows $350,000.
(15) Are there any restrictions on the number of 529‐ABLE Plans that can be used for one individual beneficiary?
ANSWER: The bill does not limit the number of 529‐Plans per beneficiary.
OWNERSHIP, CONTROL & ADMINISTRATION OF ABLE ACCOUNTS
(16) Who controls the funds in an ABLE Account?
ANSWER: In most States the person who opens the account is the account owner and controls the funds in the account.
(17) What is the administrative process for opening and maintaining an ABLE Account?
ANSWER: Each state will have its own process for establishing a 529‐ABLE Plan. The process should be identical to the process used to establish a 529 Education Savings Plan. Each state will need to reform their current process to take into account the eligibility provisions to establish a 529‐ABLE Plan.
(18) What are the administrative fees for opening and maintaining an ABLE Account?
ANSWER: Fees will vary by the state.
ABLE ACCOUNTS COMPARED TO OTHER SAVINGS VEHICLES
(19) How do 529‐ABLE Plans differ from other savings vehicles?
ANSWER: Except for the special needs and pooled trusts, none of the other accounts listed below will provide benefits protection. Any funds held in a standard savings, IRA, educational savings or other type of account will be counted as income and assets against the beneficiary. This means they would NOT qualify for federal benefits until the funds were depleted. 529‐ABLE Plans, like pooled trusts, require a Medicaid payback upon death of the beneficiary.
How do 529‐ABLE Plans differ from 529 Education Savings Accounts? Money that is saved in 529 Education Savings Accounts must be used for education.
How do 529‐ABLE Plans differ from IRAs? Funds held in IRA accounts cannot be accessed until a person reaches a specific age, normally 59 1/2 years old. 529‐ABLE Plan funds can be accessed throughout a beneficiary’s lifetime.
How do the 529‐ABLE Plans differ from special needs trusts? There are different advantages and disadvantages to trusts and 529‐ABLE Plans. Special Needs Trusts are regulated at the state level and need to be reviewed and updated if a family moves to another state. Special needs trusts are taxed at the highest individual tax rate, and they can be expensive to set‐up and maintain. Special needs trusts do not have contribution limits, and the allowed expenditures are not as limited as a 529‐ABLE Plan. If a special needs trust is set‐up as a 3rd party trust, then a Medicaid payback is not required.
How do 529‐ABLE Plans differ from pooled trusts? Pooled trusts are fully taxable, require set‐up and maintenance costs, and are regulated at the state level. A portion of the money left in the account after the beneficiary’s death stays in the account for other participants before the Medicaid payback applies. There are no contribution limits and the allowed expenditures are broader than with a 529‐ABLE Plan. Set‐up and maintenance of pooled trusts are generally done by disability organizations. The set‐up fees can be less expensive than special needs trusts and the organizations that maintain them are familiar with how the funds can be used on behalf of the beneficiary.
(20) Can an individual have a 529‐ABLE Plan and a special needs or a pooled trust?
ANSWER: Yes, all are tools for providing disability‐related supports and services to individual with a disability. Which ones work best or in combination will depend on individual circumstances.
TREATMENT OF 529‐ABLE ACCOUNTS UNDER CERTAIN FEDERAL PROGRAMS
(21) Can a 529‐ABLE beneficiary currently receiving SSI benefits utilize their 529‐ABLE account for qualified housing expenses?
ANSWER: Yes, however, certain rules apply to these distributions. Under the 529‐ABLE proposal, expenses for a primary residence, including rent, purchase of a primary residence or an interest in a primary residence, mortgage payments, real property taxes, and utility charges, are deemed to be qualified expenses. When distributions are used for these purposes, the distribution is not excluded from consideration when determining SSI benefits. As a result, the Social Security Administration will apply the one‐third reduction rule in which one‐third of the federal benefit rate ($674 for an individual in 2011) is counted as additional income to the beneficiary. In this case, benefits would be reduced by this additional income ($224).
(22) If a 529‐ABLE beneficiary is receiving SSI benefits, how will assets in the beneficiary’s 529‐ABLE affect his/her benefits?
ANSWER: There is no impact on a beneficiary’s federal benefits if he/she is also the beneficiary of a 529‐ABLE account until his/her total combined assets, including funds in their 529‐ABLE account) exceed $102,000. In that case, if the beneficiary of a 529‐ABLE account is receiving SSI benefits, the beneficiary’s SSI benefits are suspended only during the period of time that his/her total assets exceed $102,000.
(23) Can the beneficiary of a 529‐ABLE account lose his/her Medicaid benefits?
ANSWER: No. The 529‐ABLE proposal expressly protects the beneficiary of a 529‐ABLE from losing his/her Medicaid coverage as a result of the funds held in a 529‐ABLE account.
ISSUES PERTAINING TO ACCOUNT ROLL‐OVERS
(24) Can pre‐existing savings accounts already established for an individual with a disability be rolled over into a 529‐ABLE Plan?
ANSWER: Under current law, you may use funds from a Coverdell Account and/or Uniform Gifts/Transfers to Minors Account to open a 529 Education Savings Account. This provision shall apply to the establishment of a 529‐ABLE Plan. Other types of standard savings accounts don’t have any up front restrictions that would prevent a roll‐over. IRA and 401k accounts have provisions to allow withdrawal of money due to disability.
(25) Upon the death of a beneficiary, can 529‐ABLE Plans be rolled over into an IRA to the spouse and/or dependents of the deceased?
ANSWER: 529‐ABLE Plan can be rolled over to another beneficiary without a taxable event if the new beneficiary is the spouse or another qualified individual. The roll‐over will not count as a distribution. If the new beneficiary does not meet the eligibility criteria for a 529‐ABLE Plan, the account may be rolled into a 529 Education Savings Account
Valley National is growing and we are searching for the right individual for a full time, year round position. We need your help. If you know someone who fits the description below, please forward this to them and ask him or her to apply online or contact us directly.
Valley National Financial Advisors is seeking an experienced tax professional to serve in a dual role as senior tax preparer and financial planning specialist. Responsible for income tax preparation for individuals and companies in addition to year-round tax planning and financial analysis, recommendations and calculations. Must be able to work independently as well as in conjunction with Financial Advisors to serve our clients.
The professional in this role: Identifies potential tax credits and liabilities and ensures accurate and complete returns are filed in a timely manner. Completes tax forms in accordance with policies and in compliance with legislation and regulations. Ensures our clients receive fast, accurate, professional services, with the best possible outcome for the tax challenges they face or the ongoing services they need.
Qualifications / Desired Skills:
5 years of direct 1040 tax preparation and review experience, preferably for a high-volume, reputable tax firm
3-5 years of experience in financial analysis, including tax planning recommendations and calculations.
CPA or EA designation, or currently pursuing
Extensive knowledge of Federal, state and local PA tax rules and regulations
Understanding of investments and cash-flow projections.
Strong candidates will be well versed in working with the following…
ProSystems / CCH Axcess
Adobe Acrobat (PDF documents)
Microsoft Word, Excel, Outlook
IntelliConnect familiarity and SurePrep experience, a plus
NaviPlan (desired – or other financial planning software experience, a plus)
Candidates MUST have an ability to work independently and work alongside other financial planning professions to make an impact for clients and the firm.
Candidates should desire to use their strong tax knowledge to expand their career to include individual financial planning/forecasting.
Primary responsibilities:
Preparation and filing of tax returns for clients (individual and small business).
Daily client interaction as required to complete client tax returns, and assist clients with tax related notices and audits.
Updating software to include all high priority cases and managing tasks effectively through software.
Updating client information and status in both the tax software and client management system.
Responding to problems, interfacing with appropriate key people and departmental personnel so that client needs will be handled correctly and promptly.
Work alongside Financial Advisors to perform client tax projections, year-end calculations, and ad hoc tax projects.
Master financial software and learn to input key data points quickly and efficiently.
Assist Financial Advisors and other tax preparers with tax extensions post 4/15.
Draft specific tax recommendation as part of the client financial planning process.
Research complex tax items via IntelliConnect.
Master specific tax software systems, in order to help train and mentor new tax preparers.
At times, meet with prospects/clients to gather data for planning projections.
Salary exempt classification. Salary based on experience. Full benefits, including 401(k), paid time off, paid vacation, health insurance, dental, vision, life insurance, long-term disability.
The last time the Nasdaq composite stock index crossed 5000 – in March 2000 – it was powered by big companies that make software and hardware for PCs, and red-hot Internet companies with no earnings.
What might push the Nasdaq over 5000 this time? Greece. And red-hot Internet companies with earnings. News of a pending settlement between Greece and its creditors sent all stocks soaring Friday, taking the tech-laden Nasdaq with it. But real companies with solid earnings have made much of the dot-com dream real – 15 years after the bubble burst.
Consider Apple. The company’s iPods popularized legal music delivery via the Internet. Its iPhone pioneered mobile Internet. In 2000, Apple wasn’t among the 10 largest Nasdaq stocks. Today, it’s the largest stock by market value in the U.S., worth $754 billion, paying dividends just like stodgy industrial stocks. In fact, technology stocks now pay out more in dividends than any other stock sector.
Google, the third-largest stock on the Nasdaq, wasn’t traded in 2000. Neither was Facebook, now the fourth-largest Nasdaq stock. Or Amazon, now in fifth place in the index. All have risen because of the power of the Internet – something the dot-com bubble investors foresaw, but paid far too much for.
The Nasdaq has risen at a much more stately pace than it did in the 12 months leading up to the dot-com crash. The index has gained 15% the past 12 months, vs 110% in the blistering 12 months before the bubble burst in March 2000.
Cisco Systems was the biggest stock in the Nasdaq in the dot-com era. It had ripped to a 161% gain in 12 months before the tech wreck began. But the real stars were the Internet stocks. E-commerce software and Web developer BroadVision blasted up 592% the second half of 1999. InfoSpace (now Blucora) leaped 355%. Pets.com, an online pet-supply company, raised $82.5 million in February 2000. It filed for bankruptcy protection in November 2000.
And it all came tumbling down as the nation entered a recession and, suddenly, no one wanted companies with no earnings. By the time the tech wreckage settled, the Nasdaq composite was down 78%, dozens of unprofitable companies had vanished – and the stage was set for a protracted and (somewhat) more sober march back to Nasdaq 5000.
Fifteen years later with the Nasdaq composite opening the week at 4956 following an eight session winning streak, 5000 is just one decent rally away.
It is that time of year again. We are reaching out to find the next rising stars to join our team. We are looking not only for recent college graduates, but will also consider other individuals who are re-entering the workforce or just getting started in their career. If you know anyone who you think has the skills, education and drive to join our team, please let me know ASAP. And, please circulate this to your own contacts. If you have any questions, let me know.
Entry Level ProfessionalFinancial Services
Valley National’s Entry Level Professional (ELP) program is designed to hire a select group of entry level professionals and integrate them into Valley National’s expanding “one-stop” financial planning business model. These individuals should have a strong desire to live and work in Lehigh Valley. The ELP program will train, educate, and teach each employee the foundations of financial planning, tax preparation, and investment management in order to give them the skills necessary to serve and grow Valley National’s client base.
Do you have your tax returns prepared by Valley National? You should have received your annual tax disclosures and questionnaires via e-mail or mail earlier in the month. If you do not see them soon, you may click here to access the engagement forms online. Or call our office with any questions.
Do you want (or know someone who wants) to have your tax returns prepared by Valley National? Visit our website to access the forms to get started – valleynationalgroup.com , click on “Tax Services.” You may download PDF versions or fill the required forms out online by clicking on the link that says GET STARTED HERE.
Understanding your tax options is an integral part of informed financial choices. We look forward to helping you and your family.
Valley National’s founder and president, Thomas M. Riddle, was interviewed by NEWSWEEK! Not on the usual topic of financial planning, taxes or investments. Instead, the writer contacted Tom to find out what it’s like sharing a name with the infamous character from the Harry Potter books by the name of Lord Voldemort. CLICK TO READ THE ARTICLE
“We all receive email that is crazy sounding,” said Tom. “I was very suspicious when I read the email from the writer introducing himself; but, this one turned out to be legitimate. My family has had a lot of fun with this.”
Thanks to all of you referring great new restaurants to my wife Jo Anne and me to try. Most recently, we tried “Saranda’s on Broadway” and we were impressed! I am adding it to my list of FAV’s. Here is what YELP says: http://www.yelp.com/biz/sarandas-on-broadway-fountain-hill
My wife Jo Anne makes the best turkey stuffing. She proved it once again this Thanksgiving. The recipe has been passed down for three generations and bound to be passed further along because our two daughters are asking about its specifics too. What’s the secret to great stuffing? Make lots of it. Seriously, there is never enough!
