The latest on the blog:
Benefits of a Taxable Investment Account
The benefits of tax-deferred accounts like 401(k)’s, IRA’s, and HSA’s, among others, are often touted and generally for good reason. That said, the benefits of a taxable investment account tend to be overlooked but can be meaningful as well. This post will go over financial planning benefits a taxable investment account can provide as part of a tax diversified portfolio. Tax Planning Opportunities When assets are sold in a taxable brokerage account, they are subject to capital gains taxes. This tax is based on the gain of the investment and is subject to your income tax rate if the investment is sold less than a year after purchasing but more favorable long term capital gains rate if held for more than a year. These rates can range from as low as 0% up to 20% and are shown below: Filing Status 0% Rate 15% Rate 20% Rate Single Up to $47,025 $47,026-$518,900 Over $518,900 Head of Household Up to $63,000 $63,001-$551,350 Over $551,350 Married Filing Jointly Up to $94,050 $94,051-$583,750 Over $583,750 Married Filing Separately Up to $47,025 $47,026-$291,850 Over $291,850 Estates and Trusts Up to $3,150 $3,151-$15,450 Over $15,450 Additionally, if your income is over $200,000 if single or
Off to School: Guide to 529 Distributions
For most investors, the 529 account is the most used account type to save and invest for a child’s education. This type of account provides for tax-deferral on the growth of the investments and if the funds are used for ‘Qualified Educational Expenses’ the funds can be withdrawn tax free. If you have a young one either in school or about to head off, you are likely wondering what exactly is a qualified education expense that allows the withdrawal to be tax free. What is a Qualified Education Expense? As long as the funds are being used for a college age child, there is no limit on the amount of qualified expenses that can be incurred. 529 funds can now be used to cover expenses for a child in grades K-12 but those expenses are limited to $10,000 per year and only tuition and fees qualify. Qualifying expenses include: What is not a Qualified Education Expense? While many costs associated with school, and often the highest cost expenses, are qualifying educational expenses not all are and it is prudent to be prepared to cover non-qualified expenses through other means. Some common expenses that can’t be paid from a 529 penalty
Essential Estate Planning Documents Everyone Should Have
Estate planning is a crucial aspect of financial planning for individuals of all ages and income levels. Having the right estate planning documents in place ensures that your assets are distributed according to your wishes, and your loved ones are protected in case of unexpected events. In this blog post, we will outline the essential estate planning documents that everyone should have to safeguard their legacy and provide reassurance for themselves and their families. Last Will and Testament A Last Will and Testament, commonly known as a Will, is a fundamental estate planning document that outlines how you want your assets and property to be distributed after your death. It allows you to name beneficiaries, appoint an executor to oversee the distribution, and, if you have minor children, designate a guardian for them. Without a Will, your state’s laws will determine how your assets are divided, which might not align with your intentions. Revocable Living Trust A Revocable Living Trust is an estate planning tool that provides more flexibility and privacy than a Will. With a trust, you can transfer your assets to a separate entity (the trust) while retaining control over them during your lifetime. In case of incapacity
