Check our blog for updates on regulations or resources that can be used to help you and your business achieve your financial goals.
As your financial advisors, we want to remind you that the “bad actors” who want to compromise your security online don’t take vacations. Instead, they have an eye out for when you do. Here’s how to keep them from compromising your online safety while you travel:
Before You Go:
Sign up for fraud alerts from your financial institutions
Many major banks and credit cards can send you free alerts by text, email or phone call if you have a suspicious transaction. Be sure to call and see if this service is available, and that you have it activated before you leave on vacation.
Turn off location services, and auto connect for Wi-Fi and Bluetooth on your devices
These can be a great convenience, helping you move seamlessly through your day. But, if you leave them on while you are on vacation, anyone sitting nearby – say in a hotel or coffee shop – can track you or get access to your data. If you take your laptop, turn off auto file sharing, too.
Enable PINs and passcodes on your devices
This is your first line of defense in case your phone is lost or stolen. Also, check to be sure it’s set to require the password in the shortest amount of time. Annoying for you – but even more annoying for the “bad actors”.
Install anti-virus protection
Be sure all your devices are equipped with virus protection, and that it’s running the latest updates.
While You’re Away:
Use only password-protected Wi-Fi from networks you recognize
Avoid “free” public Wi-Fi – you might pay the price of giving the bad actors access to your information. Most hotels (and even some restaurants) have password-protected networks.
Don’t post your vacation on social media while you’re away
Even if you or one of your family members is “Instagram Famous,” stay off of social media platforms while you’re away. Your posts are broadcasting to strangers that your home is vacant, as well as giving plenty of clues when you’re not at your hotel, too. Post highlights from your trip when you get back.
Be careful on public computers
If you use a public computer – in your hotel business center or an internet café, for example – be sure to log out of any accounts you accessed before leaving. (And you should note that if you do need to check financial accounts, it’s usually safest to do it from a wired connection – not Wi-Fi – or a cellular on your phone.) Also, if a URL starts with “https”//” it means you have a more secure connection.
Thank you for allowing us to work with you to help you pursue your financial goals, and we wish you continued success.
We found this information on pool safety to be a good reminder. We thought you might be able to use it, too.
Keeping Summer Safe: Pool and Spa Safety Tips
The backyard pool can be great summer fun, but it can also be a source of danger for children. Every year hundreds of children fatally drown. If you have a pool or spa, here are seven simple tips to keep your children and their friends safe during swim season.
Seven Safety Tips to Save Lives
1) Adult Supervision: Always be present when children are using the pool. As any parent knows, it only takes moments for children to place themselves in dangerous situations, so stay attentive.
2) Keep a Life Ring or Shepherd’s Crook Nearby: This lifesaver can quickly pull someone from the pool. Always check that it is in good condition.
3) Fence and Alarms: Make sure your pool is protected by a fence. You may even want to add an alarm system that can warn you of unintended use of the pool.
4) Rope or Float Line: This can distinguish between the shallow and deep ends and serve as a visual reminder to young children not to pass.
5) Lock Your Hot Tub Cover: Young children may not be tall enough to stand up in the hot tub or fully appreciate how quickly heated water can lead to dehydration or other accidents.
6) Safely Store All Pool Chemicals: These chemicals represent a danger not only to children but the adults who use them. Find a safe storage area and handle them properly.
7) Cover Pool Drains: Suction entrapment can lead to death. Make sure all drains are properly installed with certified covers. Periodically check to ensure that they are not damaged.
With these simple steps, you can increase the safety of your pool or hot tub, without any loss in the fun and joy they bring.
Owning a vacation home can offer tax breaks, but they may differ from those associated with a primary residence. The key is whether a vacation home is used solely for personal enjoyment or is also rented out to tenants.
Sorting it out
If your vacation home is not rented out, or if you rent it out for no more than 14 days a year, the tax benefits are essentially the same as those you’d receive if you own your primary residence. In this scenario, you’d generally be able to deduct your mortgage interest and real estate taxes on Schedule A of your federal income tax return, up to certain limits. Also, you may exclude all your rental income.
But the rules are different if you rent out your vacation home for 15 or more days annually. First, the rental income must be reported. Second, in this scenario, the IRS considers your vacation home to be an investment property and, thus, allows deductions related to the rental of the property, with certain limitations. In addition to mortgage interest and real estate taxes, these deductions generally include insurance, utilities, housekeeping, repairs and depreciation. Also, the deduction for certain categories of expenses cannot exceed the rental income.
If you exceed this number of days of rentals and use your vacation home for personal use, these deductions will be limited by the ratio of actual rental days to the total days of use of the home. Suppose, for example, that you personally use your vacation home for 25 days and rent it for 75 days in a year, so the home is used for 100 total days. Here, you would be allowed to deduct 75% of the expenses listed above as rental expenses. Be aware that a portion of the mortgage interest and real estate taxes may be deductible on Schedule A. In certain circumstances, however, the personal portion of your mortgage interest may not be deductible.
If you want to maximize the tax benefits of your vacation home, limit your personal use of the home to no more than 14 days or 10% of the total rental days. If you want to personally use the home more than this, you can still realize some limited tax benefits. Contact our firm for details about your specific situation.
If you make estimated tax payments, this is a reminder that your second quarter Federal and Missouri tax estimates are due on or before June 17, 2019.
If we prepared your tax return, please use your pre-printed forms and mail with your checks to the address indicated on the estimate vouchers. You should refer to your 2018 tax folder for this information. Also, be sure to write your social security number and "2019 1040-ES" on the memo line of your check.
Many parents today suffer from sticker shock when they learn what it costs to send their children to college. While the cost of college can be a hard pill to swallow for parents of college-bound teens, now is the time for parents to get familiar with a 529 College Savings Plan. The commonly used college savings plan has offered parents, and their college-bound kid(s), tax-free withdrawals to pay for college.
Here’s what you need to know about a 529 College Savings Plan:
- Also known as a “qualified tuition program,” a 529 Plan allows an individual to save for higher education expenses for a determined beneficiary.
- Anyone—whether they are a family member or friend—can establish a 529 Plan for a designated beneficiary.
- A 529 Plan is provided by a state, an agency of the state or by an educational institution itself.
- Money invested in the plan accumulates on a tax-deferred basis and distributions used for higher education expenses are tax and penalty-free, as long as the funds are used for approved education expenses.
If you are considering establishing a trust for your child to pay for college instead, here’s what you should know:
- Most trust funds may not be effective means of sheltering this cash from the financial aid process—if your child will be applying for aid trust funds can be counted in the financial aid process as an asset of the child. This could affect your child’s eligibility for aid.
- A potential work around to the above issue could be established if the trust was restricted to withdrawing just the principle for the beneficiary.
Be sure to work with a financial professional before investing in a 529 Plan to understand eligibility requirements. Some plans will only allow savings to be used to pay for college in that designated state, for example.
If you are interested in starting a 529 College Savings Plan for your children, give us a call today at 417.883.1212 to discuss savings and investment strategies.
Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing.
Investors should also consider whether the investor's or beneficiary's home state offers any state tax or other benefits available only from the state's 529 Plan. Any state-based benefit should consult their financial or tax advisor before investing in any state's 529 Plan.
Over the course of retirement, healthcare expenses are anticipated to cost $280,000, on average, for a couple turning age 65 today.1 Yet, many retirees significantly underestimate their out-of-pocket healthcare costs, assuming that Medicare and private insurance will cover far more than it does. Below we’ve debunked four of the most common myths about healthcare costs to help you make confident and informed decisions about planning for healthcare in retirement.
MYTH #1: Medicare will cover all of my healthcare expenses. Misinformation about what Medicare does and does not cover can lead many people to underestimate how much money they may need to cover healthcare expenses after age 65. While Medicare Parts A and B provide coverage for most hospital stays, emergency room visits, certain lab tests, and doctor’s office visits, you may still be responsible for a portion of these costs, including copays. Medicare also does not cover prescription drugs administered outside of a hospital setting and most dental, hearing, vision, and long-term care services, which can add up quickly over time.
MYTH #2: I don’t need to purchase a prescription drug plan. Certain prescription drugs can cost hundreds or even thousands of dollars per month, especially those used to treat rare conditions or where a generic version is not available. Purchasing a prescription drug coverage plan, such as Medicare Part D or certain Medicare Advantage plans offering prescription drug coverage, may help lower your out-of-pocket healthcare expenses in retirement.
MYTH #3: My Social Security benefits will cover anything Medicare doesn’t cover. While most retirees rely on Social Security benefits to provide a portion of their income needs in retirement, keep in mind that Social Security is only expected to replace about 40% of the average worker’s pre-retirement income in retirement.2 Without additional income from sources such as a company pension, employer retirement plan(s), and personal savings, most retirees find that Social Security alone falls short of paying for all of their expenses in retirement.
MYTH #4: It’s less expensive to age at home. Remaining in your home is not always the least expensive option if you require assistance with activities of daily living, such as cooking, cleaning, dressing, bathing, and transportation. A 2018 study reports the average annual cost for home health aides is $50,336.3 While that’s roughly the same as the average cost of an assisted living facility at $48,000 a year,3 it’s important to consider the other costs associated with remaining in your home. These may include retrofitting your home with wheelchair ramps and safety features, in addition to paying your mortgage or rent, homeowner’s insurance, real estate taxes, utilities, and regular maintenance and repairs— all of which can quickly push the cost of remaining in your home with the assistance of paid caregivers well over the estimated average.
Call the office today if you have questions or concerns about how you will pay for healthcare costs in retirement.
Are you expecting a tax refund and would like to be able to track it?
The IRS is offering it's "Where's My Refund" tracking tools again this year. There are two ways you can track your refund:
- IRS "Where's My Refund" Website
Both are available 24 hours a day, 7 days a week. You can start checking on the status of your refund within 24 hours after they have received your e-filed return or 4 weeks after you mail a paper return. The tools are updated once a day so you don't need to check more often than that.
To use the "Where's My Refund?" tools, taxpayers need to have a copy of their tax return for reference. Taxpayers will need their social security number, filing status and the exact dollar amount of the refund they are expecting.
The IRS issues 9 out of 10 refunds in less than 21 days. Where's My Refund? has a tracker that displays progress through 3 stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent. You will get personalized refund information based on the processing of your tax return. The tool will provide an actual refund date as soon as the IRS processes your tax return and approves your refund.
Caution: Don't count on getting your refund by a certain date to make major purchases or pay other financial obligations. Even though the IRS issues most refunds in less than 21 days, it's possible your tax return may require additional review and take longer.
If you are expecting a refund from the State of Missouri you can track it through the Missouri Return Inquiry System.
Did you contribute to an Individual Retirement Account (IRA) last year? Are you thinking about contributing to your IRA now? If so, you may have questions about IRAs and your taxes. Here are some tax tips about saving for retirement using an IRA:
Age Rules. You must be under age 70½ at the end of the tax year in order to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.
Compensation Rules. You must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. It also includes tips, commissions, bonuses and alimony. If you are married and file a joint tax return, only one spouse needs to have compensation in most cases.
When to Contribute. You can contribute to an IRA at any time during the year. To count for 2018, you must contribute by the due date of your tax return. This does not include extensions. This means most people must contribute by April 15, 2019. If you contribute between Jan. 1 and April 15, make sure your plan sponsor applies it to the year you choose (2018 or 2019).
Contribution Limits. In general, the most you can contribute to your IRA for 2018 is the smaller of either your taxable compensation for the year or $5,500. If you were age 50 or older at the end of 2018, the maximum you can contribute increases to $6,500.
Taxability Rules. You normally don’t pay income tax on funds in your traditional IRA until you start taking distributions from it. Qualified distributions from a Roth IRA are tax-free.
Deductibility Rules. You may be able to deduct some or all of your contributions to your traditional IRA.
Saver’s Credit. If you contribute to an IRA you may also qualify for the Saver’s Credit. It can reduce your taxes up to $2,000 if you file a joint return.
If you don't currently have an IRA and would like to discuss the options available to you, please contact our office.
Between 30 percent and 60 percent of taxable property has an inflated assessment, which may lead to higher property tax bills. Moreover, typically fewer than 5 percent of taxpayers dispute their assessment.¹
For homeowners who think their local government may have assessed their property’s value too high, there are ways to appeal and potentially win a lower assessment, which may save hundreds or even thousands of dollars annually in future taxes.²
The procedures and requirements for challenging the assessed value of your property will differ by state, but you should consider a number of general factors.
Your opinion of the fairness and accuracy of your property assessment is not enough. You will need to gather facts to support your claim. One way to do that is to see how your home compares to similar homes in your neighborhood.
Check to see if there are any obvious errors (e.g., is the square footage incorrect?). If you have found an outright error, you may be able to simply bring it to the assessor’s attention and get it corrected.
Appealing your assessment may cost you money, depending on the complexity of the process and whether you choose to use professional resources. You are the ultimate judge of weighing the costs related to some uncertain financial reward, but know the cost-benefit before you start. For instance, you may not want to spend $1,000 to save $200 per year.
Your appeal will have less credence if the market evaluation is made by a local real estate agent. A comparative appraisal will carry considerably more weight when it is performed by a credible, third-party expert.
Appeals have precise deadlines and procedures. You need to meet them; otherwise you run the risk of losing out on the opportunity to have your appeal heard for another year. Call your local officials or visit the relevant website to familiarize yourself with the appeal process requirements.
1National Taxpayers Union Foundation, 2018
2The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2019 FMG Suite.
The Tax Cuts and Jobs Act of 2017 ushered in a number of changes impacting taxpayers at all income levels. These changes include new tax rates and adjusted income thresholds, as well as a significantly higher standard deduction ($12,000 for single filers and $24,000 for married couples filing jointly). The new law also eliminated a number of itemized deductions, while limiting others. As you prepare to file your first return under the new tax law, one of the first decisions you’ll need to make is whether to take the standard deduction or itemize.
Under the new law, if you have less than $12,000 in deductible expenses ($24,000 for a married couple), it makes sense to take the higher, standard deduction. However, keep in mind, even if you take the standard deduction, you may still be able to claim certain “above-the-line” deductions to further lower you tax bill. These deductions are subtracted from your income before your adjusted gross income (AGI) is calculated for tax purposes. Below are several deductions you may be eligible to take, whether or not you itemize on your 2018 return. Since this is not a complete list of deductions you may be eligible for, be sure to consult your tax professional for more information.
Traditional IRA contributions may be deductible if you meet the eligibility requirements. Remember, you have until April 15, 2019 to make an IRA contribution for tax-year 2018. IRA contribution limits for 2018 are $5,500 for those under age 50 with earned income from wage earnings. Those age 50 and older in 2018 are eligible to make an additional catch-up contribution of $1,000, for a total annual IRA contribution of $6,500 for tax-year 2018.1
Health savings accounts (HSAs) are generally available to individuals with high-deductible health plans to help offset out-of-pocket healthcare costs. Contributions are tax deductible on your federal return up to $3,450 for individuals in 2018, and $6,900 for qualifying family plans—as long as you made them with after-tax dollars. (You can’t deduct contributions made through an employer plan using pre-tax dollars.) Those age 55 or older in 2018 were eligible for an additional $1,000 in catch-up contributions for a total of $4,450 for individuals, and $7,900 for families.2
Penalties on early withdrawals from CDs are also deductible, whether or not you itemize, regardless of the amount of the penalty.3
Alimony that you pay to a former spouse may be deducted as long as 1) your divorce agreement was signed before December 31, 2018, and 2) the payments are disclosed in your divorce agreement. You must also report your former spouse’s Social Security number so the IRS can verify that your ex-spouse reports the same amount as taxable income.3
This information is not provided as tax advice. Be sure to consult your tax professional with questions regarding these and other tax matters. If you have questions about tax-advantaged planning and investment strategies, call the office to schedule time to talk.
As parents, we encourage our children to work so they can learn important values about work and independence. At what point, if at all, do children need to file an income tax return for the money they earn?
The IRS does not exempt anyone from the requirement to file a tax return based on age, even if your child is declared as a dependent on your tax return.¹
Your dependent children must file a tax return when they earn above a certain amount of income.
Dependent children with earned income in excess of $12,000 must file an income tax return.² Dependent children with unearned income of more than $1,050 must also file a return. And if the dependent child's earned and unearned income together total more than the larger of $1,050, or a total earned income up to $12,000 plus $350.
These thresholds are subject to change, so please consult a professional with tax expertise regarding your individual situation.
Here's an example. Kyle is a 20 year old college student who's claimed as a dependent by his parents. He received $400 in unearned income and $5,500 for a part-time job on campus. He does not have to file a tax return because both his unearned and earned income fall below the thresholds. Kyle's total income of $5,900 is less than his total earned income plus $350.
Even if your child earns less than the threshold amount, filing a tax return may be worthwhile if your child is eligible for a tax refund.
If you decide to prepare a separate return for your child, the same reduced standard deduction rules detailed above will apply.
1The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2019 FMG Suite.
As a result of the Tax Cuts and Jobs Act of 2017 that was signed into law on December 22, 2017, you will notice a change in the individual tax brackets when your 2018 tax return is filed. Here is a chart that summarizes those new brackets.
Some of the retirement contribution limits for 2019 have increased while others have remained the same. Here is a quick summary of the contribution limits for 2019.
- 401(k), 403(b), most 457 plans, and Thrift Savings Plan - $19,000 | Catch-up* - $6,000
- SEP IRA and Solo 401(k) - $56,000
- SIMPLE IRA - $13,000 | Catch-up* - $3,000
- Individual Retirement Accounts (IRA) - $6,000 | Catch-up* - $1,000
- Roth IRA - $6,000 | Catch-up* - $1,000
*Additional catch-up contributions apply to individuals age 50 or older, even if you turn 50 on December 31, 2019
If you earn too much to open a Roth IRA due to the IRS phase out rules, you can open a non-deductible IRA and convert it to a Roth IRA as congress lifted any income restrictions for Roth IRA conversions. To learn more about the “backdoor Roth”, please contact our office.
Are you using your personal vehicle for your small business, farm or in service of a charitable organization? You could be eligible for a mileage deduction. The IRS has issued the new standard mileage rates for 2019. They are as follows:
- 58 cents per mile driven for business use, up 3.5 cent from the rate for 2018
- 20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018
- 14 cents per mile driven in service of charitable organizations, unchanged from 2018
As always, documentation is required for all mileage expenses. Records must include the amount of the expense, date and place it was incurred, and an acceptable business purpose. Examples of records include receipts, canceled checks and mileage logs.
Missouri’s minimum wage has increased with the passing of the new year. Effective, January 1, 2019, workers receiving minimum wage will now make $8.60 per hour, up from $7.85 in 2018. With the passage of Proposition B in November’s election, the wage will increase 85 cents a year to reach $12.00 in 2023.
Employers engaged in retail or service businesses whose annual gross income is less than $500,000 are not required to pay the state minimum wage rate. Employers not subject to the minimum wage law can pay employees wages of their choosing.