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AUTHORS: Jennifer Climo Jean Fullerton Jonathan Harrington Nick Prigitano Jenna-Rose Finnie Kyle Labelle

End of the Backdoor Roth? New Tax Law Proposal Aims to Quash This Powerful Retirement Savings Move

An incredibly wise man, Benjamin Franklin, once said, “In this world nothing can be said to be certain except death and taxes.” While there isn’t anything we as financial planners can do about death, one of our main goals is to help our clients reduce their total lifetime taxes paid. One of the best ways to accomplish this is to contribute money to a Roth retirement account (either a Roth IRA or a Roth 401(k)). The trouble with this is that not everyone is eligible to contribute to a Roth IRA directly or has an employer that offers a Roth 401(k) option. In these instances, another avenue to pursue is evaluating whether it makes sense to do what’s called a backdoor Roth contribution instead.

Generosity: Making Tax-Efficient Gifts to Charity

September 10, 2021 Taxes Jennifer Climo

Many people like to donate to charity. Often, people will write checks or make an online donation to a variety of charities throughout the year. Since most people now take the standard deduction instead of itemizing their deductions on their tax return, they usually don’t get the maximum bang for their buck by donating in this fashion.

Contemplating Your Compensation – What to Consider When Receiving Company Stock as a Part of Your Compensation Package

July 9, 2021 Taxes Working Professionals Investments

When many people consider the compensation package for an employer, they primarily look at the base pay and possible bonus potential. Beyond that, other fringe benefits such as health insurance, company paid life insurance, a 401(k) match, or other perks (like being able to work from home) may come into the equation. However, for many people who work for publicly traded companies, a portion (often significant) of their total compensation will come in some form of company stock awards. How do you quantify this part of your pay, and its risks, when evaluating your entire compensation package? Here are some things to consider when company stock is a portion of your total pay.

Live in NH but Work in MA? What to Know About Your State Tax Returns

July 8, 2021 Taxes Working Professionals Families

When it comes to financial planning, taxes are always a top concern. They can become even more tricky when someone lives in one state but works in another. Do you need to file a state return? What income gets reported where? If you're one of the many who live in NH but work in MA, make sure to report your income correctly so you're not overpaying this year.

The Step-Up Loophole and the STEP Act

May 14, 2021 Taxes Estate Planning

On April 28th President Biden pitched his American Families Plan to select group of members of Congress. Near the end of the proposal was a section entitled “End capital income tax breaks and other loopholes for the very top.” The first part of this section covered changes to capital gains tax rates that we covered in a previous blog article. The second part covered closing the “step-up” loophole (see text below) which is what we’re going to cover in this week’s blog.

Making Kids a Little Less Expensive - Big Changes to the Child Tax Credit in 2021

April 29, 2021 Taxes Families

Kids aren't cheap. Between providing for their food, clothes, childcare, activities, toys, possibly college, and countless other things, the financial cost of raising children can be quite high. However, most parents will admit that the joys and wonders of having children far outweigh the financial costs (at least until their adolescent years). Luckily for those who have qualifying children, many will receive an expanded tax benefit in the form of a tax credit from the recently passed American Rescue Plan. This credit is in addition to the enhancements of the Child and Dependent Care Tax Credit that was discussed in a previous blog. Here's what you should know about the Child Tax Credit, and what expanded benefits may apply to you.

The American Families Plan and the potential increase in Capital Gains Tax rates

April 26, 2021 Taxes Investments

President Biden is planning on previewing his American Families Plan (AFP) at his first address to a joint session of Congress on April 28th. Some of the expected parts of the plan include extending the enhanced child tax credit, 12 weeks of family leave paid for by the federal government, free community college, access to free childcare, and universal pre-K. To pay for all of these new programs, the President is expected to propose tax increases in various forms. One of the most talked-about changes is with long-term capital gains rates, reportedly increasing dramatically for those Americans with more than $1 million in taxable income.

Big Changes to the Child and Dependent Care Tax Credits & FSAs in 2021

March 22, 2021 Taxes Families

The American Recovery Plan Act (ARPA) has temporarily expanded two key provisions of the tax code that affect families with children 18 or under along with other types of dependents. Not that anything in the tax code is simple, but the new Child Tax Credit and Child & Dependent Care Tax Credit have now become super complicated to understand for 2021. For now, these rules only apply to 2021 and then revert to the old rules in 2022 (pending permanent changes in future tax legislation). In this week’s blog we are going to look at the Child and Dependent Care Tax Credit. We will analyze the Child tax Credit in a future blog.

Don't File Your 2020 Tax Return Yet! - More Tax Law Changes Coming From The American Rescue Plan Act (ARP)

March 12, 2021 Taxes Working Professionals Families

Just this week, both the House and Senate passed new legislation called the American Rescue Plan Act of 2021, or ARP for short, and was signed by the President. Within this bill, there are significant changes to the tax code that will apply to 2021 and beyond. In this post we will review the changes that apply to 2020 returns. In this instance, maybe the early bird does not get the worm, and if you have not filed your return yet it may make sense to hold off until some of these changes are implemented or you may need to amend your taxes later. Here's what you should know about the new tax law and how it may impact your 2020 taxes.

Don't Forget to Report This on Your 2020 Tax Return - You May Be Leaving Money on the Table!

March 5, 2021 Taxes

As we close out February and enter March, individuals and CPAs around the US are getting into the thick of tax season. By this time most tax forms should be available, and CPAs are anxiously awaiting to frantically prepare this information before the ominous April 15th deadline. No one expected last year to upend our daily lives as much as it did. Along with life changes also came government assistance, much of which came in the form of tax changes. While there are numerous differences with how 2020 taxes will be prepared, one of the most noteworthy is how to report any direct payments received (or not received) from the government. Here's what you should know about how to report these payments.

LGBTQ+ Supercharge Your HSA

February 12, 2021 Taxes Working Professionals LGBTQ+

What is a Health Savings Account (HSA)? An HSA is a savings account for health care expenses; is one of the few deductions allowed regardless of your income; and has triple tax benefits (tax deduction for contributions, tax-deferred growth and tax-free distributions if used for qualified medical expenses).

Can You Contribute to an HSA? - The Triple Threat of Retirement Saving Accounts

February 11, 2021 Taxes Working Professionals Families Insurance

In show-business, few can claim that they are the much sought after triple threat. While many can sing and dance, or act and sing, few stars can sing, act, and dance exceptionally well. When it comes to tax-preferential savings there is one account that can sing, dance, and act above the rest. This ever elusive triple threat of the retirement savings world is none other than the Health Savings Account (HSA).