Commentary

This is some blog description about this site

The #1 Reason You Need An Estate Plan

The #1 Reason You Need An Estate Plan

Several reasons to create a good estate plan as well as the number one reason plan your estate: personal peace of mind.

Death. It happens to us all. 

Chances are death is not the first thing you think about every morning, but that doesn’t mean you should never think about it.

A good plan will help make the transition as easy as possible for your family and everyone who depends on you when you’re gone. The resulting peace of mind can help you enjoy the rest of your life, no matter how long you live.

Several Reasons To Create An Estate Plan

There are many reasons to create an estate plan. Minimizing taxes is just one of these reasons.   In fact, a good estate plan could net your family a potential $0 tax liability. That’s one goal, but a well-designed plan will include much more.

Another reason estate planning is helpful is that your wishes have the best chance of being followed if they’re in writing. Recording your intentions will help ensure they’re followed. A comprehensive plan includes instructions for your affairs in the event you are incapacitated or disabled – not just when you die. You can make sure your wishes for medical care, family matters, business continuity, and asset disposition are clear even if you are comatose. So estate planning is not just planning for death.

Moreover, estate planning addresses assets for your children, grandchildren, and your favorite charities. Blended families add another layer of complexity if that’s your situation.  There are numerous ways to do this and the right plan isn’t always obvious. But a good estate plan will make your wishes clear – and help your family avoid unnecessary strife when you pass.

But Isn’t A Will Enough?

The classic “Last Will & Testament” is also a part of an estate plan, but it’s not comprehensive. Retirement accounts require you to designate a beneficiary ahead of time and that designation may override your legal will. The same goes with insurance policies. Your estate plan should encompass all your assets and make sure they are distributed according to your wishes. That’s why having a will isn’t the only component in a good estate plan.

The #1 Reason To Plan Your Estate

There are many reasons for estate planning, but the number one reason to do it is for your own personal peace of mind. 

You’ve worked hard for your family, usually for many decades. You’ve provided for your family, sometimes have grown a business, saved assets, bought properties, and invested in worthwhile causes. Your estate plan is one of your final statements to the world about who you are and what you care about. By creating a good estate plan, you are not only giving your spouse and your family what you’ve worked hard for, you’re also giving yourself the peace of mind that you’ve finished the race well. 

Next Steps In Estate Planning

Estate planning is an important part of a broader financial plan. 

We can help direct you to the right resources and experts based on your own unique goals and circumstances. We are not attorneys at Republic Wealth Advisors, but we’ve been through this process with many clients. We’ve seen how smooth the process can be for well-prepared families, and how difficult it can be for those who didn’t plan.

We recommend consulting with a board certified estate planning attorney in your area. If you need a referral, please reach out and we’re happy to make an introduction!

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

Continue reading
87 Hits
0 Comments

Headwinds, Tailwinds & Wild Cards In The Summer of 2017

Headwinds, Tailwinds & Wild Cards In The Summer of 2017

What's working and not working for equities in the financial markets as we enter the summer months.

Dear Clients, Strategic Alliances, Family and Friends,

We hope this finds you and yours doing well and looking forward to the calendar turning to summer.

I thought we would take a pause from our recent blogs being centered mostly on different wealth management topics and share some thoughts from the front lines about what is on our minds here at Republic regarding the capital markets.

For those of you that have been with us for some time you will no doubt remember the framework from our periodic missive Headwinds and Tailwinds regarding the investment opportunities and risk landscape.

Headwinds For Equities Going Forward

  1. High stock valuations (i.e., price to book, price to sales, dividend yield, price to earnings multiples, price to earnings adjusted for both inflation and rolling periods of time, enterprise value, etc.). No matter how you slice it most equities are priced for a happy world.
     
  2. Seasonal rotation usually described as "sell in May and go away". This means the markets historically tend to go stagnant after May and pick up again late in the year.

Potential Tailwinds For Equities From Here

  1. Momentum (i.e., technical analysis). In other words, technical indicators suggest a continued bull run.
     
  2. Supply vs. demand (i.e., there are roughly half the number of public companies today (4,000+/- vs. the 8,000+/- that were public when I entered the business almost four decades ago).
     
  3. Economies around the world are definitely starting to show some actual real growth for the first time in a decade (top line sales revenue growth along with double digit earnings growth).

Wild Cards

  1. Narrowing markets. Are the market advances getting to narrow...with fewer names doing well? You may have heard about the hand full of so called " FANG" stocks, Facebook, Amazon, Apple, Netflix, and Google hitting new highs.  Much has been written about this recently and it appears this fear is overblown, but definitely it is continuously monitored by our team.
     
  2. Currencies (i.e., the value of the dollar vs. the other world markets).
     
  3. The Fed (if and when will the Fed actually go from the accommodative position of forcing interest rates to near zero along with blowing out their balance sheet with QE1, QE2, QE3(QEInfinity?) going all the way back to 2009? In other words, when the biggest financial engineers of all time go from providing a gale force tailwind for financial assets and start to become a possible headwind, will other central bankers follow?).
     
  4. The ever present geo-political risks (North Korea, Syria, Russia, and other international issues can always throw a wrench in otherwise functioning markets).  

Cautious Optimism for the Rest of 2017

Yes, deep down, we are optimists. But we take our Fiduciary responsibilities to heart all the time (side note, we are not fazed by the financial front page debate over the new fiduciary rules for advisors...we have been fee based, fee- only fiduciaries from the start around here).

How all these market dynamics play out going forward and more importantly what it means for your custom investment portfolio strategy and you will continue to be top of mind for us. These will be high on our agenda when we visit with you at your next Regular Progress Meeting.

As always, we are both grateful and thankful to continue to serve you. 

Fred Hanish 
(and the rest of the Republic Wealth team)

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

Continue reading
90 Hits
0 Comments

Three Tips for Excellent Email Protection

Three Tips for Excellent Email Protection

Use different email accounts, enable two-factor authentication, change your email account 4X / year, plus some bonus tips.

Email security is important. 

Without secure email, your entire online presence is at risk. And most of the responsibility for email security lies with you.

Email providers can’t guarantee your cybersecurity. Hackers attack email providers to gain access to user accounts. But they also directly attack individual email accounts, using phishing, malware, social engineering and other scams.

Here are three tips to dramatically improve your email security from JP Morgan’s Cybersecurity Awareness document. 

Email Tip #1: Use Different Personal & Business Email Accounts

If you segment business and personal email accounts, you decrease cybersecurity risk by 50%. It takes extra effort and time to manage two accounts, but it’s much better than the alternative. Here’s what two email accounts look like…

Example Email For Business:
This email address is being protected from spambots. You need JavaScript enabled to view it.

Example Email For Personal:
This email address is being protected from spambots. You need JavaScript enabled to view it.

Once you setup your business and personal email accounts, start using them in that way. Send your contacts an appropriate announcement and interact with people on each account accordingly. This will help limit the downside risk if one of your accounts gets hacked. 

Email Tip #2: Enable Dual-Factor Authentication

Enable dual-factor authentication in your email service when available to help prevent unauthorized access. This is probably the best thing you can do to secure your email.

Dual Factor Authentication, also known as DFA (as an acronym), is an extra layer of security that is known as "multi factor authentication". It requires a username & password but also something that only that user has on them – like cell phone text verification. Using dual-factor authentication will help dramatically improve your email security. 

Email Tip #3: Change Your Password 4 Times Per Year

Email passwords are your first line of defense against a cyberattack. Hackers use dictionaries, names, linguistic patterns, and can break into over 60% of passwords used today – possibly including yours. And worse, email providers also get hacked thus compromising your passwords. 

Here are some ways to improve your email password security. 

  • Use long and complex passwords – at least 10 characters.
  • Use special characters and numbers.
  • Change your email password 3-4 times per year. 

Bonus:  Extra Tips to ‘Bulletproof’ Your Email Accounts

Following the above 3 tips will put you ahead of most other email users.  However, if you want to go the extra mile to ‘bulletproof’ your email accounts, here are more email security tips:

Image from: JP Morgan’s Guide to Cybersecurity Awareness

Other Cybersecurity Areas To Watch

Email security will be important for any person with an email account going forward. Make sure you’re aware of the dangers and follow these tips to stay safe online. 

  


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

Continue reading
108 Hits
0 Comments

The Top 10 Tax Friendly States To Retire In

The Top 10 Tax Friendly States To Retire In

The best states to retire in based on taxes: Alaska, Delaware, Georgia, and more.

Ever thought about relocating when you retire? Before you say goodbye to the neighborhood, this week’s post may help you make smarter plans based on recent tax data.

Each year JP Morgan Asset Management releases an updated Guide to Retirement (2017). This year was no different. The annual guide covers 4 major areas that include: retirement landscape, saving, spending, and investing

One great takeaway from this year’s Guide to Retirement was JP Morgan Asset Management’s Comparison of State Taxes Paid by A Retiree Household. Here are the top ‘tax friendly’ states to retire in according to their methodology.

Image courtesy of JP Morgan Asset Management

Top 10 Tax Friendly States

1. Alaska: Taxes for retirees in Alaska are lower than any other state. They have a modest sales tax (7.5% or lower) with low property taxes and no state income taxes.  

2. Delaware: Delaware taxes are low and weighted toward property and income taxes. Delaware does not impose sales taxes on goods or services sold in the state. 

3. Georgia: Like most states, Georgia sales tax varies by region. The effective tax rate currently ranges from 6.0% to 8.0% in the major metro areas. Georgia has lower and property and income taxes for retirees. 

4. Nevada: Like Alaska, Nevada does not charge an income tax. They make most of their revenue from sales taxes (8.25%). Property taxes vary by area and are subject to senior exemptions.

5. Wyoming: Wyoming is another one of the 7 states that does not assess an income tax. Their state sees revenue from property and sales taxes. Property taxes tend to be lower for retirees in Wyoming. 

6. Mississippi: Sales tax in Mississippi is usually 7.0% unless taxes for certain items. They also have a graduated income tax based upon your income. Property taxes are more reasonable compared to most other states.

7. Kentucky: Kentucky enjoys a relatively low 6.0% sales tax state wide. However, they assess income and property taxes depending on household income and property values.

8. Colorado: Sales tax in Colorado varies by jurisdiction. They also charge a flat 4.63% income tax regardless of your annual income. Colorado also assesses property taxes. 

9. Florida: Florida is another state that does not charge income tax. Sales tax depends on the region and item sold and property taxes in Florida vary by city and county. 

10. South Dakota: Rounding out the top 10 tax-friendly states, South Dakota does not levy an income tax. However, they make up for it with higher sales taxes on various items and property taxes. 

Image Courtesy of JP Morgan Asset Management

Planning Retirement Going Forward

State taxes can change every year. What looks great in 2017 may not make as much sense in 2018 or beyond. We don’t recommend selling the homestead and moving to Alaska just yet, but it may make sense to talk to us about your retirement plans. We help our clients balance these concerns with other considerations so you can enjoy a stress-free retirement. Call us today. 

 

JP MORGAN ASSET MANAGEMENT CHART DISCLOSURES:

Tax favorability based on household overall effective state tax rate: Top tax friendly (<8%), Tax friendly (8%-9.9%), Less tax friendly (10%-13%), Not tax friendly (>13%). Retired married household age 65. 1 State income tax liability is based on all taxable sources of retirement income minus allowable state personal exemptions and a standard deduction. State-specific exemptions, deductions and/or credits related to eligible retirement income and Social Security are included. States with no income tax: AK, FL, NV, SD, TX, WA, WY. States that tax interest and dividends only: TN and NH. States that tax Social Security: CO, CT, KS, MN, MO, MT, NE, NM, ND, RI, UT, VT, WV. States that do not tax retirement plan distributions or Social Security: IL, MS, PA. 2 State property tax applies to home value only and includes state-specific homestead exemptions/credits. 3 States with no sales tax: AK, DE, MT, NH, OR (local taxes may apply).

Of note: CA imposes a 1% surtax on taxpayers earning more than $1M ($1,052,886 married) for a top marginal tax rate of 13.3%. NYC levies an additional 2.907-3.876% on taxable income. HI top marginal income tax rate reduced to 8.25% in 2017.

Retired married household age 65. 1 State income tax liability is based on all taxable sources of retirement income minus allowable state personal exemptions and a standard deduction. State-specific exemptions, deductions and/or credits related to eligible retirement income and Social Security are included. States with no income tax: AK, FL, NV, SD, TX, WA, WY. States that tax interest and dividends only: TN and NH. States that tax Social Security: CO, CT, KS, MN, MO, MT, NE, NM, ND, RI, UT, VT, WV. States that do not tax retirement plan distributions or Social Security: IL, MS, PA. 2 State property tax applies to home value only and includes state-specific homestead exemptions/credits. 3 States with no sales tax: AK, DE, MT, NH, OR (local taxes may apply).

Of note: CA imposes a 1% surtax on taxpayers earning more than $1M ($1,052,886 married) for a top marginal tax rate of 13.3%. NYC levies an additional 2.907-3.876% on taxable income. HI top marginal income tax rate reduced to 8.25% in 2017.

Source: J.P. Morgan Asset Management. The presenter of this slide is not a tax or legal advisor, and this slide should not be used as such. Clients should consult a personal tax or legal advisor prior to making any tax- or legal-related investment decisions.

 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

Continue reading
156 Hits
0 Comments

Top 3 Tax Breaks for Wealthy Americans

Top 3 Tax Breaks for Wealthy Americans

More info on estate tax exceptions, limits on Social Security payroll taxes, and preferential tax treatment for investors.

The U.S. tax system is graduated. In other words, the more you make and the more you own the more taxes you pay, in general. However, Uncle Sam allows some significant tax breaks for wealthier Americans. In today’s post, we cover three of the more exceptional breaks given to those taxpayers.

Special thanks to Motley Fool for the idea. 

1. Estate Tax Exemptions

Income tax news gets the press in March and April, but we sometimes forget about estate taxes. The estate tax can be a big burden to wealthier Americans. Historically, the estate tax has targeted “rich” families. The problem is the term “rich” is a moving target. As recently as 2001, a tax rate of 55% applied to estates worth $3 million and affected every estate over $675,000. Some modest homes can cost $675,000 in certain areas of the country. So in the recent past, estate taxes laws were penalizing families with relatively modest means. 

Estate taxes are more reasonable now. Though estate taxes aren’t gone, they are down from their recent high water marks…

  • Exemptions for gift and estate tax has risen to $5.49 million.
  • Married couples can use the exemptions amounts to shelter nearly $11 million.
  • Estates that are taxable now pay an effective flat rate of 40%.
  • Inherited assets get a step-up in tax basis to eliminate possible capital gains taxes for heirs.
    (As always, check with your CPA to get personalized advice for your personal tax situation.)

2.  Limits on Social Security payroll taxes

Income taxes are graduated. The more you earn, the more you pay. Social security taxes are also graduated in that wage earners pay 6.2% and self-employed workers pay 12.4%. In addition, medicare payroll taxes are 1.45% and 2.9% for wage earners and self-employed workers respectively. 

With one exception: there's a limit on the wages subject to Social Security taxes. The 2017 limit is $127,200. Wealthier Americans may not earn any additional Social Security benefits for earning $100,000+ per year versus $25,000 per year, but at least the total Social Security and Medicare taxes are capped at a reasonable level. 

3. Healthy Tax Breaks For Investing

Investors are, by definition, more wealthy than most taxpayers. That’s why this is the third tax advantage wealthy Americans have over other taxpayers. Here are four of the more significant tax breaks:

A. Lower maximum long-term capital gains for investments held longer than a year. Current maximums are 20% compared to the 39.6% tax bracket for short-term capital gains.

B. Lower maximum tax rates on qualified dividend income that matches the previously mentioned long-term capital gains tax rates.

C. Savings Plans that grow tax-free: Roth IRAs for retirement, health savings accounts (HSAs) for healthcare, and educational savings accounts like 529s and Coverdells.

Possible Changes to Tax Laws for Wealthy Americans?

Wealthy Americans still pay plenty of taxes, but these provisions can help them cut their tax bills. Until tax reform makes changes to these or similar provisions, the wealthy will be able to use these tax breaks to offset their April tax bill.

With every new administration, there is a threat to the current tax system. In Washington, we never know what will happen, so stay tuned. Tax reforms are often meaningful and, if passed, could be retroactive to January 1, 2017.

If you have any questions about your specific tax situation, reach out to a good CPA and estate planning attorney. If you need help with your overall financial plan, let us know.

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

Continue reading
127 Hits
0 Comments

The IRS Dirty Dozen: 12 Top Scams in 2016 – Part 2

The IRS Dirty Dozen: 12 Top Scams in 2016 – Part 2

The 2nd half of the dirty dozen scams from 2016 according to the IRS. 

Tax season is now in full-swing. That’s why we’re reviewing some of the worst scams according to the IRS. Last week we explored the top six ways con artists and tax dodgers ply their trade. In case you missed last week’s blog, checkout the post here.  

This week we cover the bottom half of the ‘Dirty Dozen’ tax scams. The re-printed article is a slightly abridged version from Think Advisor. Think Advisor: IRS Top 12 Tax Scams for 2016

Fred

-----

 

7. Fake Charities

The IRS said charitably inclined Americans should be wary of nonprofits with names that are similar to familiar or nationally known, legitimate organizations. The agency’s Exempt Organizations Select Check allows donors to find legitimate, qualified charities to which contributions may be tax deductible.

Legitimate charities will provide their Employer Identification Numbers, if requested, which can be used to verify their legitimacy through EO Select Check. It is advisable to double check using a charity's EIN, the IRS said.

Donors should not give or send cash. For security and tax record purposes, they should contribute only by check or credit card or another way that provides documentation of the gift.

8. Falsely Padding Deductions on Returns

Each year, some taxpayers just can’t resist the temptation to fudge information on their tax returns by falsely inflating deductions or expenses to underpay what they owe and possibly receive larger refunds.

“Taxpayers should file accurate returns to receive the refunds they are entitled to receive and shouldn’t gamble with their taxes by padding their deductions,” John Koskinen, IRS Commissioner said.

The IRS said it normally is able to audit returns filed within the last three years, and additional years can be added if substantial errors are identified or fraud is suspected.

9. Excessive Claims for Business Credits

The fuel tax credit generally is not available to most taxpayers, yet the IRS said it routinely uncovered unscrupulous preparers who had enticed sizable groups of taxpayers to erroneously claim the credit to inflate their refunds.

Improper claims for the fuel tax credit generally come in two forms: an individual or business making an erroneous claim on an otherwise legitimate tax return, or an identity thief claiming the credit in a broader fraudulent scheme.

10. Falsifying Income to Claim Credits

Some people inflate or include income on a tax return they never earned, either as wages or as self-employment income, usually in order to maximize refundable credits, such as the Earned Income Tax Credit.

“Misrepresenting facts is cheating and taxpayers are legally responsible for all the information reported on their tax returns,” Koskinen said.

Falsifying income could result in the taxpayer facing a big bill to repay the erroneous refunds, or in some cases, criminal prosecution.

11. Abusive Tax Shelters

According to the IRS, abusive tax schemes have evolved from structuring of improper domestic and foreign trust arrangements into sophisticated strategies that take advantage of certain foreign jurisdictions’ financial secrecy laws and the availability of credit/debit cards issued from offshore financial institutions.

“These schemes can end up costing taxpayers more in back taxes, penalties and interest than they saved in the first place,” Koskinen said.

The IRS said taxpayers should be aware that an arrangement is an abusive scheme if it uses unnecessary steps or a form that does not match its substance. Taxpayers should also remember that promoters of these schemes often use financial instruments improperly to facilitate tax evasion.

12. Frivolous Tax Arguments

Promoters of frivolous arguments encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe, such as contending that taxpayers can refuse to pay taxes on religious or moral grounds by invoking the First Amendment. They also include contentions that the only “employees” subject to federal income tax are employees of the federal government; and that only foreign-source income is taxable.

Taxpayers have the right to contest their tax liabilities in court, the IRS noted, but using frivolous arguments is wrong, and these have been thrown out of court.

-----

We hope the list of 12 tax scams reviewed over the last two weeks has been insightful and is a good reminder to always be careful.  

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

Continue reading
177 Hits
0 Comments

The IRS Dirty Dozen: 12 Top Scams in 2016 – Part 1

The IRS Dirty Dozen: 12 Top Scams in 2016 – Part 1

The top 6 scams and tax evasion techniques tried last year according to the IRS.

Tax Season is upon us. Believe it or not, April 15th is only 6½ weeks away. And, this year, you get a few extra days with tax day in 2017 falling on Tuesday, April 18th because of the Easter holiday.  

Every year, individuals try to pull one over on Uncle Sam. And every year they get caught. It has become an annual tradition for the IRS to publish various ways con artists and tax dodgers attempt to fool the unsuspecting public and government. This week, we review an abridged version of an article covering half of those 12 ways. Look for part 2 next week.  

Fred

======

Think Advisor: IRS Top 12 Tax Scams for 2016

Almost as certain as death and taxes is the perennial appearance during tax season of scammers and evaders.

Con artists steal personal information, gull the elderly and promote schemes to the unsophisticated to avoid taxes or increase refunds. Some venal taxpayers don’t need help, and instead finagle their returns to win undeserved benefits or lower liabilities.

Every year, the Internal Revenue Service issues a “dirty dozen” list of a variety of common scams that taxpayers may encounter anytime but especially during filing season as people prepare their returns or hire people to help with their taxes.

The agency notes that illegal scams can result in significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shut down scams and prosecute the criminals behind them.

The agency also offers a variety of ways to obtain tax information.

Following are this year’s “dirty dozen” as prepared by the IRS:

1. Identity Theft

Tax-related identity theft, in which someone uses a stolen Social Security number to file a tax return claiming a fraudulent refund, remains a chief concern for the IRS.

And with good reason. A recent study found that some two-thirds of taxpayers thought identity theft “could never happen to me,” often making them easy prey for scammers.

In fiscal 2015, the IRS initiated 776 identity-theft-related investigations, resulting in 774 sentencings through its enforcement efforts.

2. Phone Scams

Criminals impersonating IRS agents have deluged taxpayers across the nation with phone calls, threatening police arrest, deportation, license revocation and other things.

“There are many variations,” IRS commissioner John Koskinen said. “The caller may threaten you with arrest or court action to trick you into making a payment. Some schemes may say you’re entitled to a huge refund. These all add up to trouble.”

Following is what a taxpayer who gets a phone call from someone claiming to be from the IRS and asking for money should do.

If you don’t owe taxes, or have no reason to think that you do:

Do not give out any information. Hang up immediately.

Contact the Treasury Inspector General for Tax Administration to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.

Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" in the notes.

3. Phishing

“Criminals are constantly looking for new ways to trick you out of your personal financial information, so be extremely cautious about opening strange emails,” Koskinen said.

Some scammers pose as a person or organization the victim trusts or recognizes. Others hack an email account, and send mass emails under another person’s name.  Still others pose as a bank, credit card company, tax software provider or government agency.

 “The IRS won't send you an email about a tax bill or refund out of the blue,” Koskinen said. “We urge taxpayers not to click on any unexpected emails claiming to be from the IRS.”

Doing so can expose the target’s computer to malware, enabling the criminal to access sensitive files or track keyboard strokes, exposing login information.

4. Return Preparer Fraud

Although most tax professionals provide honest, high-quality service, some dishonest preparers set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers.

“Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected,” Koskinen said. 

The IRS offers these tips for choosing a tax preparer:

  • Ask whether the preparer has an IRS Preparer Tax Identification Number, which is required to register with the IRS and must be included on the filed tax return.
  • Does the tax return preparer have a professional credential, belong to a professional organization or attend continuing education classes?
  • Check the preparer’s qualifications on the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications
  • Never sign a blank return
  • Review the return before signing
  • Report tax preparer misconduct to the IRS

5. Offshore Tax Avoidance

The IRS said that despite several years of budget reductions, it has continued to pursue cases of offshore tax evasion in all parts of the world, regardless of whether the person hiding money overseas chooses a bank with no offices on U.S. soil. It said taxpayers were best served by coming in voluntarily and taking care of their tax-filing responsibilities.

The IRS offers the Offshore Voluntary Disclosure Program to enable people catch up on their filing and tax obligations. Since the first OVDP opened in 2009, there have been more than 54,000 disclosures, and the agency has collected more than $8 billion from this initiative alone. The agency has conducted thousands of offshore-related civil audits that have produced tens of millions of dollars, and has also pursued criminal charges leading to billions of dollars in criminal fines and restitutions.

6. Inflated Refund Claims

“Be wary of tax preparers that tout outlandish refunds based on federal benefits or tax credits you've never heard of or weren't eligible to claim in the past,” Koskinen said. “Taxpayers should choose preparers who file accurate returns.”

Scam artists use flyers, advertisements, phony store fronts and word of mouth to throw out a wide net for victims. They frequently prey on people who do not have a filing requirement, such as low-income individuals or the elderly, as well as on non-English speakers, who may or may not have a filing requirement.

 


 

The above list serves as a reminder, as always, that you should be ever vigilant.  We will share with you another 6 scams to be on the lookout for next week.  

 


 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

Continue reading
181 Hits
0 Comments

5-Step Goal Setting Guide for 2017 -- and Life

5-Step Goal Setting Guide for 2017 -- and Life

Goal setting can be a simple, dynamic process to provide clarity on all your actions for this year and beyond.

Whether you’re ultra-wealthy or like most of us, you can benefit from a solid list of goals. And January is a great time to set your goals for the year.

The following excerpt is an edited version of a financial goal-setting worksheet prepared by Kingdom Advisors. If you’ve never set financial goals, this simple, 5-step process can help you take action for goal-setting this year and beyond. Enjoy.

=====  

Writing down your goals can be a mental roadblock to many people. But don’t be afraid to take this step! Without written goals, you will never know when you have reached your finish line. Attaining a goal brings a great feeling of success.

As you set your goals, remember the process is dynamic. Write your goals in sand, not in concrete. Know that even if you have set a faith goal – things can change. Goal setting and keeping is a process. What you aim for may not be where you ultimately end up. 

Write down what you think you should do, make it measurable, and take action. Setting goals should be a process that takes action towards that direction.

Step 1: Make a List of Goals

Take the first step of recording your goals and dreams by making a list. 

Record your financial goals. Some examples of financial goals are to: cut spending, eliminate debt, start a business, retire, put children through college, give to charity, or provide extracurricular activities for your children.

Step 2: Consolidate & Refine Your Goals

The second step is to consolidate and refine your financial goals and dreams.

Look at your list and check it. Do you have any goals that can be combined? For example, did you list pay off credit cards and reduce debt? Those two could be one goal. The purpose of this step is to refine your list so that your goals are clearly stated and distinct.

Step 3: Prioritize Your Goals

The third step is to prioritize your goals.

Put them in order of importance. If you have a lot of goals, choose the top five in order of priority.

Step 4: Quantify Your Top 5 Goals

The forth step is to quantify your top five goals.

Put the goals in numeric terms – how much money and/or time will be required to reach your objective? Without quantifying a goal, it is hard to be effective in pursuing that goal. Your most important goals should be measurable.

Step 5: Keep Your Goals Visible

The fifth and final step is to keep your goals visible.

Write them down, and put them in a place where you will see them regularly. Some ideas for this are to keep them in a notebook you use for your daily prep time, or to post them on your dashboard, on your bathroom mirror, or inside your checkbook cover. Periodically review your goals, and revise or eliminate as your circumstances change or you accomplish your goals! 

Financial Goal Setting for 2017

How are you doing on your financial goal setting this year?

If you need help setting financial goals for your family, it may be helpful to chat with one of our advisors as your situation is likely unique. Don’t hesitate to reach out if we can be of assistance. 

======

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

Continue reading
228 Hits
0 Comments

Financial Goal Setting 201: Planning a 30-Year Retirement

Financial Goal Setting 201: Planning a 30-Year Retirement

Every year, the New Year presents us with a new opportunity. 

In early January, we often review our lives as and decide if we’re heading in a good direction. If not, we make adjustments and change goals. This happens with our personal fitness, family direction, personal finances and other areas. It’s easier to do this in the New Year because many others are doing the same thing. 

In other words, it’s a good time to review your financial goals.  

A critical question for financial goal setting is deciding where you want to go. Retirement is usually the destination. The question is, how long will your retirement last? 

This week, we explore a very likely scenario for many baby boomers: a 30-rear retirement. Here are some thoughts that may help prepare you for your retirement – and it may be a longer retirement than you’re planning for right now.

Fred

 


 

Funding a 30-year retirement will take financial planning prowess as you juggle the effects of inflation, distributions, taxes, asset allocation, and expenditures. Are you up to the task?

George Forman, the boxer-turned-spokesman for portable grills, may have best summed up the retirement conundrum facing baby boomers: “The question isn’t at what age I want to retire; it’s at what income.” The amount you’ll need each year to maintain your desired standard of living is the most critical variable to identify in the retirement planning process. 

How long will you need it?

Longevity is perhaps the greatest challenge for boomer retirement planning. 

Most boomers seriously underestimate their life expectancy. Perhaps this is due to a misunderstanding of what mortality age really means. In fact, half the population will outlive their life expectancy. 

When the mortality table tells us that a 65-yearold man has a mortality age of 84, it means that half of all men who are 65 today will die before age 84, and the other half will still be alive. The mortality tables also include the entire population, not just those who receive the level of nutrition and health care that you probably enjoy. 

The double bite of inflation

The increased longevity that boomers can expect contributes to the serious risk of inflation, which is the long-term tendency for money to lose purchasing power. 

This has two negative effects on retirement income planning. It increases the future costs of goods and services that retirees must buy, and it potentially erodes the value of their savings and investments set aside to meet those expenses. Even at a modest inflation assumption of 3% annually, the effects of inflation over a half century of retirement could be devastating.

The planning process

Explore all sources of guaranteed income available when retirement begins. 

Social Security, pensions, and any other income sources must be quantified as to how much, from what source, and for how long. Pay careful attention to whether benefits index with inflation or continue to a surviving spouse, since survivor planning is an important part of retirement income planning.

Develop three cash-flow models — both spouses living, husband dies, wife dies — to identify any gaps in cash flow that need to be addressed by additional savings or insurance. Next, inventory all assets that will be used to generate retirement income. This is where the traditional financial planning tools are needed to project future values and income streams from various types of assets. Be alert to the differences in taxation during distribution among various types of assets. Retirement accounts will generate less spendable income than investment accounts, because of the taxes due on distributions from retirement plans.

Asset allocation: Between a rock and a hard place

The double whammy of longevity and inflation creates an asset allocation dilemma for boomers. 

The old adage of subtracting a person’s age from 100 to obtain the optimal percentage of equities just doesn’t hold for a multi-decade retirement portfolio. Invest too conservatively, and your money may not grow enough to last your lifetime considering the erosion of long-term inflation. Invest too aggressively, and you run the increasing risk of outright capital loss without adding significant years to your plan under average market conditions.

Working with your advisor, determine an appropriate exposure to equities, then design an allocation within those equities to ensure meaningful diversification among asset classes and investment styles. Cash and fixed income will play a larger role in retirement portfolios, since provisions must be made for the orderly withdrawal of assets.

Setting a realistic withdrawal rate

Most of the evidence seems to point to 4% as being about right for a sustainable withdrawal rate for decades of retirement. The withdrawal rate is the one variable over which you have the most control — not your mortality, not your health, not your investment returns, not inflation — just your withdrawal rate. You must understand that this is the lever you will need to pull when things don’t go as planned. Being realistic about what you can spend and keeping a sufficient contingency reserve fund will ease the pressure that withdrawals put on retirement portfolios.

-----

Helen Modly, CFP, ChFC, has more than 25 years of experience providing wealth management services. She is a member of NAPFA and FPA. Sandra Atkins has been a business owner for more than 30 years. She is a member of the AICPA and NAPFA.

 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.

 

Continue reading
382 Hits
0 Comments

Four Ways to Donate to Charities in 2016

Four Ways to Donate to Charities in 2016

This month, we’ve been focusing on ways to give in 2016. December 31st is the last day you can donate to a charity and receive a credit for 2016 income taxes. There are several ways to donate this month. We’ve put together a short list to help you think about your next charity donation. 

1. Cash Donations

One of the most common ways to donate to any charity is through cash. Though ‘cash’ often refers to money in hand (quarters, hundred dollar bills, etc.), the term can refer to money in banking accounts, checks or any other form of currency that is easily accessible and can be quickly turned into physical cash. This year, you can donate cash through checks, bill pay, or direct transfers to help causes you believe in. 

2. Donor-Advised Funds (DAFs)

Last week, we reviewed another way to give this year: the donor-advised fund, or DAF. The donor-advised fund allows you to make tax qualified contributions today and decide later how the funds can be used. The core features of a donor-advised fund are irrevocable contributions, tax deductions in the current year, and future distribution of funds. It’s one way to give for a tax benefit today while giving tomorrow to your favorite charity. 

3. Qualified Charitable Distributions (QCDs)

If you’re over the age of 70½, you may be interested in giving a qualified charitable distribution (QCD). According to the IRS, a qualified charitable distribution is “an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity.” In other words, you can give funds directly from your IRA and not pay any taxes on that distribution. It may be a great way to offset taxes in your situation while giving to your favorite cause.   

4. Time

An often overlooked way to donate to a charity is with your time. You may not be able to give as much as you would like to a food bank, church, or synagogue, but many of those same organizations offer volunteer opportunities. Volunteering is one way to give back that doesn’t cost anything. One of the major benefits from giving your time can be a feeling of satisfaction after a charity event. There may not be an income tax credit for donating your time, but you can’t replicate the good vibes you often receive when you volunteer. 

Bonus Tip: Charity Navigator

Ever wonder if a charity will use the money in the best way? 

Charity Navigator may be able to help out. According to their website, Charity Navigator “has become the nation's largest and most-utilized evaluator of charities.” They attempt to create an unbiased ratings system so supporters can assess whether donations will be used appropriately. To research a charity, checkout: CharityNavigator.com 

We also recommend you discuss this and other tax-beneficial donation strategies with a qualified tax professional. If you have any other questions about donations this year, give us a call. We’re always a phone call away. 

 

IMPORTANT DISCLOSURE INFORMATION: Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Republic Wealth Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Republic Wealth Advisors.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Republic Wealth Advisors is neither a law firm nor a certified public accounting firm and no portion of this blog content should be construed as legal or accounting advice.  If you are a Republic Wealth Advisors client, please remember to contact Republic Wealth Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Republic Wealth Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request. 

Continue reading
269 Hits
0 Comments

Newsletter Sign Up


Austin | Houston | Bartlesville
Tel: 512-506-9395 | 281-408-2538
Toll-free: 866-453-6565
discovery@republicwealthadvisors.com