Happy Tax Day to You and Your Family

April 19, 2018

For those who couldn’t join us at SHRED-IT, here are the highlights.

“Lily Jo pretending to behave”

“Self-Shredding by Lily Jo”

TAXES

Today is the day we start thinking about your 2018 taxes. The Tax Cut and Jobs Act of 2018 represents the largest change to individual and corporate taxes in recent history. A sample of changes:

Individuals:

  • Reduction of marginal tax rates for many of 3%
  • Increase of Standard deduction to 12,000 (single) / 24,000 (married)
  • A maximum deduction of $10,000 for State and Local Tax (SALT)
  • Your mortgage interest payments may not be tax deductible
  • Your charitable contributions may not be tax deductible
  • Your medical expenses just became harder to deduct
  • Investment costs for IRA’s are no longer deductible

Business owners:

  • Entertainment expenses are no longer deductible
  • Reduction of marginal tax rates for a portion of your income

OUR FINDINGS

Individuals:

  • It may make more sense to pay off your mortgage
  • Roth IRA’s can be a better option
  • Health Savings Accounts can be a powerful tool

Business Owners:

  • Can your entertainment costs be reconfigured to be educational?
  • Will your corporation benefit by moving from an S corporation to a C corporation?

TARIFFS

Our markets the past 9 weeks are as volatile as I can remember. 300-point swings in the market have been the new normal and 1,000-point changes are no longer abnormal. The primary contributor to current market volatility is the potential for a trade war via tariffs. Our stock markets strongly dislike any barriers to free trade and respond with vigor each time tariffs are discussed. Because the tariff conversation is part of a bigger strategy to negotiate with our Chinese trading partners to better respect intellectual property, particularly in the technology field, we don’t feel this conversation goes away soon. However, there is a long history of American administrations threatening trade wars, and very very seldom are they implemented. We feel a similar outcome will occur this time as well, and when the Intellectual Property negotiations are complete, tariff talk will evaporate. We will continue to experience market volatility in the meantime.

EVENTS

Purpose Planning Workshop – May 4-6, Shorelodge in McCall

Retirement Plans for Business Owners – May 31, 12:00PM, Hillcrest (CE Credit)

Women, Wine and Wealth – June 21, 6:00PM, Arid Club

Travel Buddies – July 25, 6:00PM, Arid Club

PURPOSE PLANNING

We recently launched a new service called Purpose Planning, where we assist you in identifying and prioritizing your Purpose. We have received complimentary feedback on this. Our program follows the good work of George Vaillant’s research in “Triumphs and Experience”, the longest study on aging. He follows the lives of 1929 freshman at Harvard and studied them for over 70 years. The most important determinate to successful retirement was the individual’s ability to find purpose in their life. By purpose, we mean a reason to get up in the morning, more than simply keeping busy, including an identity that provides a sense of accomplishment

If you would like to discuss one of these topics further or a complimentary copy of our new 114 Tips in Retirement, contact tj.falconer@woodtarver.com. Falconer@RaymondJames.com.

Wood Financial Group is a Treasure Valley based Investment practice focusing on assisting their clients with the transition to retirement. We specialize in working with business leaders and owners. Our mission is to deeply improve the lives of our clients, team members and community through a thoughtful and patient investments.

Any opinions are those of Kelly Wood and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Investing involves risk and investors may incur a profit or a loss.

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax matters. Please consult your tax or legal advisor for your particular situation.