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It’s important to consider taxes as they affect all aspects of your financial life.  As you reach the age when you are required to take distributions from your retirement accounts, we’d like to remind you it is possible to combine that requirement with your charitable giving strategy to potentially save money on your taxes.

If you are over 70 ½ you can donate DIRECTLY from your IRA to a qualified charity and reap significant tax benefits.  It is very important that the donation goes directly from your IRA custodian to your chosen charity.   Amounts given in this way do not have to be reported as income.  They also can’t be used as a charitable donation deduction.  It is often beneficial to keep your adjusted gross income as low as possible.  For example, your taxable social security depends on your adjusted gross income. 

Fred is 75 and single.  He does not itemize deductions.  His pension income is $10,000, Social Security income of $24,000 and interest and dividends of $2,000.  His required minimum distribution (RMD) for 2018 is $4,000.  Fred does not need the RMD for cash flow purposes and would like to donate it to his church and Neighbors Inc.  If Fred takes out the RMD and writes checks totaling $4,000 to his church and Neighbors, his taxable income will be $4,400 (including $2,000 of taxable Social Security).  On the other hand, if he directs his IRA custodian to send checks directly to his church and Neighbors for his $4,000 RMD, his taxable income will be $0 (and none of his Social Security will be taxable).

Important things to remember with this strategy: 

· The monies must not come to you first!  Some brokerage firms offer a checkbook that can be used to write checks directly from your IRA, others require you to make a formal request to them to issue the checks to the charity. 

· You are not required to donate all of your RMD — you can choose how much to donate up to the maximum amount of $100,000 per year. 

· You must be over 70 ½ to use this tool.

                                                                                                                                                  October 9, 2018





With the passing of Tax Cuts and Jobs Act of 2017 (TCJA), some deductions that have been available in the past are no longer available. One of these deductions is miscellaneous itemized deductions. Covered under this umbrella are investment advisor fees. Though unfortunate from a tax standpoint, it may still be the best way to have your advisor manage your investments. If you have taken advisor fees as part of your itemized deductions in the past, you may want to consider talking to your financial planner.


Other Miscellaneous Itemized Deductions

The other miscellaneous itemized deduction we see most often is unreimbursed business expenses, such as business mileage or items required to be used in a trade or business, but not paid for by the employer. If this change impacts your return, it may be a good idea to request your employer reimburse you for these expenses under an accountable reimbursement plan.  This way, taxpayers get covered, tax-free, for the costs they pay out of pocket and the business gets to deduct the expense.


Regardless of the final guidance, the new tax laws will add to the complexity of preparing returns, which may also result in longer preparation times.

                                                                                                                                                         July 24, 2018




The IRS initiates most contact with taxpayers through regular mail delivered by the US Postal Service.  In some very special circumstances, the IRS may show up at your door, but you will have received a letter in the mail prior to their visit, so their visit shouldn't be a surprise.

The IRS does NOT demand people use prepaid debit card, gift card, or wire transfer to make a payment.  They will NEVER ask for debit or credit card numbers over the phone.  Neither will the IRS threaten to bring in the local police, immigration officers, or other law enforcement agencies to arrest people for not paying.  The IRS is not able to revoke a license or immigration status.

Remember to stay vigilant.  Criminals continue to impersonate IRS employees & call taxpayers in aggressive and sophisticated ways.  If you receive any such calls, just hang up the phone.  Do not try to engage the caller.

                                                                                                                                                           July 20, 2018