Each year the house of representatives ruins the holiday cheer by passing last minute tax legislation which could have saved taxpayers thousands of dollars if decisions were made earlier in the year.
Finally, under the PATH (Protecting Americans from Tax Hikes) Act of 2015, several popular tax provisions are about to be made permanent ending the annual uncertainty. While these rules have just passed the House Ways and Means Committee, it is expected that the following legislation will pass shortly (if not by the time you read this blog post):
1. Qualified Charitable Distributions (QCD): This allows individuals over 70.5 to contribute up to
$100,000 of required minimum IRA distributions to charity each year. By donating your RMD to charity, you avoid incurring additional income and may in effect avoid the loss of exemptions, deductions, credits, phase outs and/or the 3.8% Obamacare surtax on unearned income. In addition, this may help lower your Medicare premiums which increase based on income.
2. State and Local Sales Tax Deduction: Deduction of state sales tax instead of state income taxes on your schedule A.
3. American Opportunity Tax Credit: Up to $2,500/year if you meet certain income phase outs.
4. Enhanced Child Tax Credit: Up to $1,000 for each dependent child if you meet certain income phase outs.
5. Section 179 Expensing for Business Owners: Added an inflation adjustment to the $500,000 expensing limit and $2,000,000 threshold for phase-out.
As with all tax planning, it is important to have a CPA on your team to explain the rules of each of the strategies above and for tax advice. As your financial quarterback, your PSG financial planner will look holistically at your entire financial picture and help you feel more secure about your situation.
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Steve joined Planning Solutions Group in 2015 and specializes in providing comprehensive financial plans to high-net worth individuals and families. During his career he has realized that his true passion is for building long-term relationships with clients and helping them through the various financial challenges they may face. Steve’s mission is to act as a true advocate for his client’s financial well-being.
Prior to joining Planning Solutions Group, Steve spent four years as a CERTIFIED FINANCIAL PLANNER™ with Keeney Financial Group in Columbia, MD. He has also had the privilege of working for Convergent Wealth Advisors, Legg Mason and NVR, Inc. Steve currently holds the prestigious CFP® designation and has his FINRA series 7 and life and health insurance licenses.
In addition to providing clarity and confidence in all financial matters to his clients, Steve is passionate about giving back to the community. He currently lives in Baltimore City with his new wife and spends his free time rock climbing, travelling, cooking and volunteering with The Associated, a Jewish Philanthropic organization.