Tax-Advantaged Strategies for Charitable Donations
How to give the most bang for your buck. The year is drawing to a close, and you may be considering year-end charitable donations. There are strategic ways to donate to charities that can benefit both the giver and the receiver. Qualified Charitable Distributions (QCDs) One common mistake we see in charitable giving is withdrawing money from an IRA and then donating it by writing a personal check. Because the IRA withdrawal is taxable, you end up owing taxes on the money before it reaches the charity, leaving less for the cause you want to support. A strategy...
What is IRMAA?
What to know if you get an IRMAA letter this year. Photo by National Cancer Institute on Unsplash If you are a higher-income taxpayer enrolled in Medicare, you may receive a letter from the Social Security Administration (SSA) this fall. This notice concerns the Income-Related Monthly Adjustment Amount (IRMAA) — an additional premium charged on Medicare Parts B and D for individuals with higher income levels. Let’s break down what it means, how it’s calculated, and what you can do if you’re affected. What income is used to determine IRMAA? IRMAA is based on your Modified Adjusted Gross...
Health Insurance After Retirement, Before Medicare
Filling the gap between early retirement and qualifying for Medicare. Health insurance is one of the biggest concerns for people considering retirement before age 65. Many hesitate to leave work because employer-sponsored coverage ends, and Medicare has not yet begun. While this gap can feel intimidating, it doesn’t have to prevent you from moving forward with your retirement plans. Several coverage options are available to bridge the transition. Let’s explore the most common choices for health insurance after retirement but before Medicare. Spouse Health Insurance Plan Transferring to your spouse's employer health insurance plan is the first option. Many people...
The One Big Beautiful Bill (and what it means for you)
We’ve all heard that President Trump’s “One Big Beautiful Bill” was recently signed into law. While there are many changes to tax law within the bill, there are some provisions that remain unchanged or extended. With so much going on in one big bill, it can be difficult to decipher. Let's take a look at the “One Big Beautiful Bill,” and what it means for you. Tax Brackets and Deductions. The bill contains about $4.5 trillion in tax cuts. The current tax brackets, which were set to revert to the old tax code at the end of this year, are...
Essential Tips for Avoiding Email Scams
How to recognize scams and what to do if you encounter them. The internet has made it easier than ever to get in touch with far-away loved ones or friends overseas. It has also made it much easier for the unscrupulous to prey upon the unsuspecting. Email scams are a pervasive threat, targeting individuals and businesses alike with increasingly sophisticated tactics. Avoiding email scams is becoming increasingly difficult. A recent CNET survey found that 96% of American adults report receiving at least one scam email, call, text or social media message every week. Scammers are coming up with new ways to...
Dollar Cost Averaging Establishes Good Saving Habits
Investing small amounts of money regularly establishes good savings habits and can benefit you in the long run. You don’t need a lot of money to start investing. Investing a little bit every pay period, month, or quarter can develop financial discipline and help you reach your financial goals. Many people think they need to save up a lump sum in order to make a worthwhile investment when in reality, small amounts at regular intervals can be beneficial. When you invest a set amount consistently, no matter what the market is doing, you’re practising the dollar cost averaging method- an...
Small-Cap Value Funds: An Investment Strategy for Long-term Vision
Small-Cap Value Funds are part of a diversified portfolio for a very important reason - this article attempts to illustrate what Small-Cap Value funds are and their importance in your portfolio. First, let’s discuss the Cap reference. Cap is derived from the term market capitalization which is the market’s estimated value of the total company’s public stock. Stocks are classified into several levels of market capitalization – generally: Small, Mid, and Large. Small-cap stocks are shares of companies where the total market value ranges between $300 million to $2 billion while Large-cap stocks are shares of companies where the total...
5 Biggest Tax Planning Mistakes
And How You Can Avoid Them Can you pay less tax? As you file your tax return for 2022, the last thing you want to think about is next year’s tax return. However, it's never too early to start tax planning. Even if you have a handle on your finances, there’s a good chance you don’t know about all your options to make sure you are making the wisest decisions regarding your tax planning. We’re here to answer your tax planning questions. At Financial Strategies Inc. (FSI), we want to help you pay taxes strategically– so you are paying less,...
It’s a Bear Market – Should I Run?
Absolutely not. They say if you encounter a bear, you should never run away; rather stand your ground and stay calm.1 The same is true for a bear market. While it may be scary, panicking and running is not your best option. Investors who withdraw their money from the stock market may miss some of the decline, but they also risk missing the recovery and gains that historically follow a bear market. The Risk of Running Away Peter Lynch once stated, “Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”2 In...
Qualified Charitable Distributions
What is a QCD? If you are over the age of 70 ½ and charitably inclined, a Qualified Charitable Distribution (QCD) is a strategy to discuss with your financial professional. A Qualified Charitable Distribution is a distribution from an IRA that goes directly to a qualified charity. Up to $100,000 per year may be given through a QCD. Other limits may apply if you are still working and contributing to your IRA. Who is eligible to give using a QCD? To be eligible to give via a QCD, you must be at least age 70 ½. QCD’s can be...