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So far Perspective Financial Services has created 150 blog entries.

New Pass-Through Income Tax-Exemption

Learn about the new pass-through income tax-exemption.People who claim their business income on their individual income tax forms (often referred to as “pass-through” income) may now be able to exempt 20 percent of that income from federal taxes. This new pass-through income tax-exemption could add up to significant tax savings.

High-earning professionals like accountants, lawyers and consultants may encounter some eligibility rules; for example, they don’t qualify if income exceeds $207,500 for an individual or $405,000 for a married couple filing jointly. However, single filers with total taxable income of less than $157,000 in 2018 (or $315,000 for joint filers) can take advantage of the pass-through tax break regardless of their line of work. That includes people with side jobs and home-based businesses, too.

Read this Consumer Reports article and talk with your tax advisor if you’d like to learn more about reducing your 2018 taxes.

By |December 17th, 2018|Taxes|

Strong Holiday Spending Expected

Photo courtesy of freedigitalphotos.net and photostock.

Holiday retail sales in November and December are expected to increase between 4.3 and 4.8 percent over last year. This is according to a recent forecast from the National Retail Federation (NRF). That strong holiday spending would equate to total sales of about $717 billion to $721 billion this year.

“Our forecast reflects the overall strength of the industry,” said Matthew Shay, NRF president and CEO.

“Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.”

Holiday sales in 2017 totaled nearly $688 billion. That is a 5.3 percent increase over the year before and the largest increase since the 5.2 percent gain in 2010.

NRF’s forecast for strong holiday spending is based on an economic model using several indicators. They include consumer credit, disposable personal income and previous monthly retail sales. The forecast includes online and other non-store sales, as well.

Retail is actually growing faster than the rest of the economy at large, according to research from IHL Group. While the lines between digital and physical shopping experiences are blurring, stores are not going away. IHL data shows that for every single retailer closing stores, two others are opening stores. The group expects stores to be involved in 81 percent of all retail sales in 2021.

By |November 4th, 2018|Current Affairs, Small Business|

Think About Estate Planning

Aretha Franklin’s death without a will is a reminder that “you better think” about estate planning.

On August 16, Aretha Franklin passed away in her home after a long, private battle with pancreatic cancer. The Queen of Soul died without having a will or trust in place. Now her family must wrestle with not only their grief, but also the lengthy, complicated and expensive process of probate. Take this news as an important reminder to think about estate planning. Probate is the court-supervised process of gathering a deceased person’s assets and distributing them to creditors and inheritors.

How Often Do You Think about Estate Planning?

Franklin’s exact net worth is unknown, but it is estimated at roughly $80 million and includes the rights to many of her hit songs, according to Wealth Management Magazine. The complete lack of estate planning on Franklin’s part will likely result in the federal government taking a huge tax bite out of that figure, leaving less inheritance to her four sons. At the moment, there are no indications that any of Franklin’s heirs are in conflict regarding next steps. Unfortunately, without documented instructions for distribution of her estate, that could easily change.

When music legend Prince died two years ago, he also left behind no will or plan for what should happen to his $500 million estate. In addition, it was unclear who had control of his royalty rights and his unreleased music. Both performers led deeply private lives. Yet, without a will or trust in place, each of their estates now can and will be laid bare for all to see.

Everyone needs a will. The legal document expedites the settlement of an estate, keeps proceedings from going to probate, and helps keep private matters private. This is true regardless of the size or scope of your estate, legacy or fame.

By |September 24th, 2018|Current Affairs, Estate Planning|

529 Education Savings Plan Updates

529 Education Savings Plan UpdatesIn July, the Internal Revenue Service (IRS) and Department of the Treasury announced new regulations related to recent tax law changes that affect 529 plans. The 529 education savings plan updates have to do with k-12 education and rollovers to Achieving a Better Life Experience (ABLE) accounts.

The 2017 Tax Cuts and Jobs Act (TCJA) allows distributions from 529  plans to be used to pay up to a total of $10,000 of tuition per beneficiary (regardless of the number of contributing plans) each year at an elementary or secondary (k-12) public, private or religious school of the beneficiary’s choosing.

Another TCJA change allows funds to be rolled over from a designated beneficiary’s 529 plan to an ABLE account for the same beneficiary or a family member. ABLE accounts are tax-favored accounts for certain people who become disabled before age 26, designed to enable these people and their families to save and pay for disability-related expenses. The regulations would provide that rollovers from 529 plans, together with any contributions made to the ABLE account cannot exceed the annual ABLE contribution limit ($15,000 for 2018).

To learn more about the changes, visit the IRS official website.

To learn more about 529 plans and how they can help beneficiaries, as well as those who contribute funds, click on our article below.

Grandparents Can Help Pay Grandchildren’s Education

By |September 10th, 2018|College Planning, Current Affairs, Taxes|