Financial Planning

This is a letter that I composed back in 2008, and I was absolutely surprised at the positive responses received from clients. There are some new items for 2019, but I have kept the framework the same because the basics really never change. So here we go again!
“… in this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin Much has changed in the world of taxes because of the Tax Cuts and Jobs Act of 2017 (TCJA), but paying taxes remains (and, of course, we will all die eventually). I have written much over the last year regarding changes to taxpayers’ income tax liabilities, but none related to estates. The main reason? Not much changed, but there is plenty of planning still to do.
The Tax Cuts and Jobs Act (TCJA) was passed in late 2017 making changes to several income tax provisions like brackets, standard deductions, personal exemptions, and corporate tax rates. . A relatively unknown provision included, which garnered bipartisan support (a rare thing, indeed), is Qualified Opportunity Funds (QOF).
Investing internationally has become a standard method of diversifying the return streams of an investment portfolio. Rather than being subject merely to performance of the domestic markets, such as the S&P 500 or Dow, diversifying internationally is supposed to provide investors with a smoother stream of returns over time.
Each year I write about Georgia’s QEE Credit program that allows state citizens to donate to a qualified school in return for a credit against state income taxes. (See this year’s article here).
No, this isn’t some newfangled common core math test! My daughter is 7 years old and, despite her parents’ mathematical abilities, she struggles with math. Addition makes sense, but subtraction is a challenge. 2+2 is most definitely 4 but 4-2 isn’t as clear cut. It reminds me of the accounting joke, “what’s 2+2?” “Whatever you want it to be.” So, at this point you may be wondering why 10 – 2 = 0.28.
The Tax Cuts and Jobs Act of 2017 have altered the traditional tax saving advice. Many are going to see their taxes reduced but lose precious itemized deductions at the same time.
I have written about utilizing Student Scholarship Organizations in the past (here), but their use is becoming more powerful with the new limitation on state and local income tax deduction.
While there is virtually an unlimited number of topics in personal finance to write on, I like to address client questions in my articles. This one relates to something I wrote about 2 years ago (here) and is a good reminder to always double check the rules.
The “major tax reform” is coming to a head with the final package agreed to by the House and Senate, soon to be signed into law by the President. On the individual side, not much has really changed and, as a disappointment to the author, it isn’t any simpler. Let’s take a look at the major provisions of the individual tax law beginning 2018.

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