The Big Tax Code Revision

Major news! The tax code revision is now law. In this blog post I want to review the major changes on individual tax returns. In subsequent posts I’ll cover the changes to business taxation, and then given an opinion on the whole thing. This will of necessity be a long post, so please bear with me.

The new individual provisions mostly take place in 2018, and expire at the end of 2025. The changes to corporate changes are permanent. This has to do with the arcane way bills move through the legislative process in Congress.

The general flow of the form 1040, or the long form, is this:

Income goes on lines 7-22
This is taxable income from wages and business interests, and from investment earnings. Taxable income also includes alimony received, capital gains and losses, IRA and retirement account distributions, rental real estate income, farm income, unemployment compensation, and social security benefits. Yes; social security benefits are taxable; see a special

Adjustments to...

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Student Loan Stress: Taking Steps to Live Debt Free


According to CNBC, there is more than $1.2 trillion in outstanding student loan debt, owed by 40 million borrowers, who have an average balance of $29,000. * Do you have student loan stress?

Large student loan balances can be a significant cause of stress. Stress over loans can lead to resignation. “I’ll have student debt forever” is a refrain I hear from some clients. Resignation leads to denial and even inaction. Where are you in this progression? Does this sound like you or someone you know? Are you a number of years out college or graduate school, yet it doesn’t seem like your loan balance is coming down?

Until recently, the economic environment hasn’t been the best for many new entrants into the workforce. You’ve taken on more debt at a younger age than the previous generation. Also, it’s tougher to find the higher-paying jobs required to pay off those loans. So what can you do?

Student loan stress: don’t live in denial, own it

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The Advice Industry

A little history of the advice industry
In this post I’d like to give a little history and background on the advice industry. It may not grab you right off as being the most compelling reading, but please stick with it. I have some valuable points to develop.

A visit to the stockbroker
When I was a teen I remember going with my father to visit his stockbroker. Dad used the occasion to teach me what owning common stock means (an ownership stake in a publicly-traded company). He explained that the broker brings buyers and sellers of securities together, and facilitates trades. For this service there is a fee on each trade – a fee on both the buy and the sell, paid by the customer to the broker.

Looking back on it, Dad was explaining to me that I, the buyer, and the broker, had a conflict of interest. My interest was getting the cheapest price for the shares. The brokers interest was to execute a sale, not unlike any other salesperson working on commission – from the...

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A Fresh Perspective on the Budget


Many of you have heard the old adage, If you fail to plan you plan to fail. Your financial planning begins with your cash flow planning – your budget, in other words. This spending plan keeps you focused on working toward achieving your financial goals. The order of operations is this:

Establish and quantify financial goals
Think this through carefully: How much do I need in my emergency fund? How much debt do I have to repay? How much should I accumulate in my retirement accounts?

Your budget – write down income and expenses
Here is where the budget comes into play. Use the budget as your roadmap to make sure you achieve your goals. Empirically I can tell you: after just 3 months of budgeting, 8 out of 10 people say they feel more in control of their money. We have a great budget template that we’d be glad to share with you. Send an email to [email protected] with the request and we’ll send it out.

Budget for the year
The budget should run out a full...

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What’s it Like Working with a Financial Planner?


What’s it like working with a financial planner?
I know many people reading this blog post have never engaged a professional financial planner before, and may be a bit reticent about what to expect. So let me tell you all about working with a financial planner at CameronDowning.

We always offer a complimentary first meeting. This is so we can determine, together, if we’re a good fit to work together. We want to know all about you – not just your financial life but about your family, your ultimate goals, to whom do you want to leave money, and whether you have any special needs children who need to be provided for. We want to know how your parents doing. Could you become financially responsible for them at some point in life? Do you have an expectation of a legacy? Do you have any lawsuits pending? We need to know all of these things! Where do you hold your current assets? Are you pleased with your current advisor? If not, why not? How did it happen that you came to...

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Financial Planning for Millennials

As a Millennial, you are in a unique position to start strong when it comes to your money. Financial planning for Millennials looks very different than planning done for Baby Boomers, and requires special attention. Here are the top three financial priorities of Millennials, by far, in no particular order:

  • How do I pay down my student loans?
  • When do I begin saving for the future?
  • What is the best way prepare to buy a first home?

In a nutshell, this is the heart of financial planning for Millennials.

Millennials are hungry for sound financial advice
Where do you start? Start by working with a qualified professional to help you identify and prioritize these important money decisions. Find a financial planner who specializes in working with young professionals.

Who does financial planning for millennials?
Not many financial planners take on younger clients because Millennials rarely meet advisor’s investment asset minimums. In other words, who wants to work with a Millennial with...

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Dependent Care Flexible Spending Account

A flexible spending account (FSA) is an elective benefit offered by many employers. There are generally two types: the FSA for healthcare expenses, and the FSA for dependent care expenses. This is part two of a two-part series. Here I describe the dependent care flexible spending account. You’ll find my post on the healthcare FSA here.

Dependent care flexible spending account
The Dependent Care FSA is a great way to fund, on a pre-tax basis, childcare expense incurred so that the parent can go to work. You must claim the child as a dependent on your tax return. Also, the child must be under age 13. The maximum tax-free reimbursement under a dependent care FSA is $5000/year. If married, both spouses must work in order to benefit. There is an exception if the non-working spouse is a student or disabled. If one spouse earns less than $5000, the benefit is limited to the earnings of that spouse.

What are the eligible expenses?
There are many. Before and after-school care, but not...

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Everybody Needs Estate Planning – That Means You!

Uncategorized Nov 30, 2017

Estate Planning – not just for the rich
You are out of school, maybe working your first job, and for the first time have your own place. You’re a real person now – making your own way in the world. It’s a great time of life! so why would I ever want to interrupt your fun to talk about estate planning?

Usually when we think of estate planning we have in mind the orderly transition of assets at death. Death is something that you have a 100% chance of experiencing – we just don’t know when. Tomorrow isn’t promised to us – and neither is this afternoon, for that matter. Consequently it is prudent to plan for this eventuality.

What does the Young Professional need?
A valid will
What do you need to do at this point in life? A basic will is the foundational document of estate planning. You need that once you own real property or begin to accumulate assets. Typically, at the earlier stages of life, most of what you have is going to pass by...

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Healthcare Flexible Spending Account

Flexible Spending Accounts (FSAs)
A flexible spending account (FSA) is offered as an elective benefit by many employers. There are generally two types: the FSA for healthcare expenses, and the FSA for dependent care expenses. This is part one of a two-part series. Here I describe the healthcare flexible spending account. You’ll find my post on the dependent care FSA here.

The Healthcare FSA
This account allows workers to contribute, through payroll deduction, to accounts that are designated for qualifying medical or dental expenses not covered by insurance. All amounts contributed are pretax and funds are not taxed when spent on qualifying health care costs – this is a big tax advantage. The FSA owner can use the funds for deductibles, co-payments, and co-insurance for the employee’s health insurance. The funds are also available for dental and vision expenses. Over-the-counter medications are not an allowable FSA expense.

Before the new tax year the employee directs...

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Income Opportunities in Charitable Giving

The IRS tax code sets forth rules and regulations under which US taxpayers remit monies to the federal government. Our taxes, and borrowing, supply the US government with its operating funds. The tax code also encourages certain behaviors, and discourages others. For example, it encourages charitable giving through generous tax deductions. Clearly it discourages speculation by taxing short term gains at one’s marginal tax rate.

In this blog piece I want to describe some of the charitable giving strategies available to the affluent. I as an advisor would be remiss if I didn’t bring this conversation up to a client. Is there a church or synagogue you wish to favor? A university? A specific charity? The opera guild? There are many favorable ways to give, which can also produce a guaranteed income for the giver.

Charitable giving is itself a discipline within the larger discipline of estate planning. Through 2017 the estate exemption is $5.49 million for an individual, and...

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