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RegisteredInvestmentAdvisor Follow The Leaders 06202019                       RegisteredInvestmentAdvisor Follow The Leaders 2 06202019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RegisteredInvestmentAdvisor Follow The Leaders 3 06202019

 

Our founder, Lawrence Sprung, had the honor of being recognized in Registered Investment Advisor magazine on June 20, 2019 in their Follow The Leaders article by Courtney McQuade.  Twitter is celebrating its 13th birthday next month and they highlighted 10 RIAs to follow on Twitter.

Over the past few years, Larry has worked hard to put out valuable content so it is truly an honor to have him recognized with other great voices in the RIA space.  Take this opportunity to read about why he was chosen and follow us too.

For those of you that do not know how to find us, here is where you can find us on social media, Twitter, Instagram, and LinkedIn.   We look forward to interacting with you on social media and having you a part of our community.

 

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice. 

 

Wedding Bells and Your Wallet

 Wedding Bells and Your Wallet

 

One of the best times of our client’s life is when they or their kids have decided to get married. It means they are embarking on a new chapter in their life, either their own or through their children. This life event typically comes with a hefty price tag. According to ValuePeguin, the average cost of a wedding in the US ranges from $12,000 (in Mississippi) to $88,000 (in Manhattan). The cost of a wedding can certainly take a bite out of your financial life.

Traditional wedding ceremonies and celebrations can be hugely expensive, as outlined above, and detrimental to your financial plan. We would recommend that you take a few minutes with your advisor and have them assist you through this financial juggernaut. It is key to determine what type of celebration is in your budget or to what degree you would be able to help your children. This is an expense that you would want to have as part of your overall financial plan. Hopefully it is part of your overall plan and you have a separate savings where you have been setting aside money for this momentous occasion. This would certainly help you reach your desired expectations while not forcing you into debt and hindering your financial goals.

Helping out children tends to be a bit more difficult conversation than speaking with a client that is planning their own wedding. We all want to help our kids and provide them with the best. We have seen some parents sacrifice their own financial stability for the pleasure of their kids. It is important to educate yourself on what you can and cannot afford. We have had our clients use us as the bad guy and inform their children that they only have a certain amount of financial resources, a dollar amount, available to contribute. These are not easy conversations, but ones that will help keep you from making a financial misstep.

There are many ways to celebrate a wedding and it is definitely a matter of preference. Spending tens of thousands of dollars for a several hour celebration may not be the best use of your financial resources. It is important that the happy couple or the parents and children sit down and outline what the expectations are for the cost of the wedding or what they will contribute to the event. Recently, we had a client who asked if they could take a deduction for the expenses they are incurring for their son’s wedding. This is not an option, but it makes you think if they would spend more if it were deductible. There are certainly ways to make a memorable event without bankrupting the family’s financial situation.

Every marriage should start out on the right foot and being in a financial hole does not help a marriage one bit. Please feel free to contact us, Mitlin Financial, at (844) 4-MITLIN x12 if you or someone you know is planning on paying for a wedding, their own or for a child. We look forward to helping you, and them, make the decision that is best for all.

 

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Tax Planning Is a Year Round Concern

 Tax Planning Is A Year Round Concern

 

Income tax planning is something you need to be aware of year-round and should continuously evaluate.  Although your tax returns are not due until April 15th each year, without extensions, it is important to make sure you are aware of your tax situation all year.  Decisions made over the course of the year that have a financial impact could hinder or improve your tax liability and a little extra work during the year can save you hours of review and alleviate your tax burden too.

When it comes to taxes, it is important to have the right financial team in place. You need to have your wealth management firm, CPA and other advisors on the same page working in your best interest. While you are in the process of, or shortly after, filing your most recent tax return there are several things you can review to make sure you are making the most tax efficient use of your investable assets.

One of the easiest ways for you to alleviate your income tax burden would be to take advantage of investment accounts that can provide a tax deduction. It is easy to see from your previous year’s W-2 how much you took advantage of your company’s retirement plan, be sure to read 2019 IRS Limits Affecting Qualified Plans and IRA’s for specific limits. It may make sense for you to consider increasing your contributions in order to lower your income tax liability and concurrently help you increase your retirement savings. Should your company not have a 401(k) or company retirement plan be sure to explore the possibility of using an IRA in a similar manner.

Utilizing different types of retirement savings vehicles would make sense too. It is important for you to understand that all of the money that is being saved on a tax-deferred basis towards retirement will be taxable in the future when you withdraw it. It may make sense for you to utilize a Roth 401(k) option, if available, or a Roth IRA which would enable access to funds in retirement that would not be taxable. By taking advantage of both forms of savings, it will allow you flexibility down the road to have more control over your income taxes.

In addition to retirement accounts, it is also important to have investment accounts that will allow you access to your money at any time without penalty, unlike most of the retirement accounts mentioned thus far. Investment accounts can generate different forms of taxable income, such as dividend income, short term capital gains and long-term capital gains, and you should have a basic understanding of what they are and how they work. Simple things like holding investments for at least 12 months and one day will turn a short term capital gain into a long one, which can mean a significant tax savings. Have you ever sold an investment only a few days prior to the one-year mark only to pay short term capital gains instead of long term, when there was no imminent need to sell? Mutual Funds should be reviewed carefully as they can produce taxable income and capital gains. It is especially important to know when mutual funds will be distributing their capital gains. We have seen clients purchase funds in early November, only to receive a significant capital gain distribution after only owning it for a few weeks. In these cases, it may make sense to wait to make the purchase or purchase an equivalent investment that has no distribution scheduled.

You will also want to make sure that you have the right investments in the right accounts. It would be ideal for you to place investments that would have the highest tax implications in your tax deferred accounts. Simply placing the highest income producing investments or those you plan to hold short term in the most ideal accounts could save you quite a bit in taxes. When making investments, it is best to place them in the type of account that will help your tax situation based upon their propensity to produce taxable income.

Lastly, you should be reviewing your accounts on an annual basis, around November, to see if there are any opportunities to harvest tax losses. As the end of the year approaches it is important to see if there are ways to mitigate your income tax liability for the year. We know most people do not necessarily like taking losses, but many times it will make sense to take the loss and reduce your tax liability. Should you feel really convicted about the holding, you can always double up the position thirty plus days before the end of the year and on day thirty one sell the initial lot for the loss. This will provide you the opportunity to capture the loss and still own the position, while participating in the upside potential of the holding.

This type of planning is how we assist our clients regularly. In many cases we will coordinate with their CPA to make sure everyone is on the same page and the portfolio changes will indeed be of help to the client. Having an open dialogue between your financial team is important to make sure everything is being done to put you in the best position possible.

Please feel free to contact us, Mitlin Financial, at (844) 4-MITLIN x12 if you or someone you know has encountered tax issues with regards to their investments or simply does not feel their CPA and advisor are on the same page. We look forward to helping you, and them, make the decision that is best for all.

 

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Mitlin Financial Nominated for Long Island Business News Reader Rankings as "Best Wealth Advisers"

 Mitlin Financial, Inc. is please to annouce that it has been nominated for the Long Island Business News Reader Rankings as "Best Wealth Advisers" for their 2019 Reader Ranking Awards.  We would really appreciate your vote and hope you can take the few seconds out of your day.

We do not take nominations like this lightly and really appreciate your support.  You can vote simply by clicking this link: https://mitlin.us/VoteMitlinLIBN or by clicking the photo below.  You can also have the opportunity to win $250 from Long Island Business News. 

 

LIBN Reader Rankings

 

 

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.  Mitlin Financial, Inc. did not pay a fee to be considered for this award, nor will it win any form of compensation if they win.

To Rollover or Not Rollover, That is The Question

To Rollover or Not Rollover That Is The Question

 

There are many decisions that need to be made when changing employers or retiring. One of the key decisions that you may need to make is whether or not to rollover your retirement plan, 401(k), from the previous employer. As mentioned in Top Five Things to Review Before Changing Jobs, you have several options when separating from service and it is important to do a careful review upon your departure.

Depending on your account balance you may not have any choice and may be required to take a distribution. It is important that you read your company’s summary plan description to see if there is a minimum level, such as $5000, where they force you to take a distribution. It is common for companies to impose this minimum so they are not burdened with maintaining what is needed for many smaller accounts for employees that are no longer with the company. When faced with this distribution, you will have the option to roll over the assets to your own IRA, your new employer’s 401(k) or simply have a check cut to you. Be aware of the tax consequences of simply taking the check. The options and consequences are very similar to those that are not forced to rollover, so keep reading.

Assuming that you are not going to be forced to take a distribution, you will be presented with several options for your 401(k) assets and we will discuss each of them here:

  • You will be able to maintain your 401(k) account with the current provider at your previous employer. This would not require any changes and your account would continue to be managed as it was previously, by you. The main difference would be that you would no longer have any contributions being deposited into the account.
  • Rolling over your 401(k) to a current (or newly opened) Individual Retirement Account or IRA. This would be a non-taxable event as long as you perform the movement of monies as a direct rollover. This would then allow you to take over management of the assets or hire a wealth management firm or advisor to assist you with investing these funds. You would not be limited to the investment menu presented by your previous company and now would have the ability to invest the funds however you see fit.
  • Another option you may have, depending on the plan provisions for your new employer, would be to roll the assets over into your new employer’s retirement plan. Like rolling it over to your own IRA, this would be a non-taxable event if you handle it as a direct rollover. You would still be in a position to manage these assets on your own and would be limited to whatever investments the new employer offers in their plan.
  • The last option you would have is taking a distribution. This would be a taxable event and depending on the size of the 401(k) could cost you a considerable amount in taxes. A distribution or withdrawal would be taxable as ordinary income in the year you take the distribution. When taking this type of withdrawal there is a 20% mandatory federal tax withholding by the plan. This is used to offset your tax liability for the year. Essentially, if your 401(k) at the time of distribution is worth $100,000 you would only receive a check in the amount of $80,000. The $20,000 would be sent in as a Federal tax withholding to offset your liability for the year. Keep in mind, this does not mean that this is all the tax you owe. Depending on your tax bracket for that given year, you may owe more or you may end up getting a refund because you withheld too much over the course of the year. Before exercising this option it is very important to consult with your tax advisor to make certain there are not any unintended consequences down the road.

The choices here are not easy ones to make and should be considered very carefully. It is important to speak with a fiduciary advisor that can outline and walk you through the pros and cons of each option. As an example, one of the tremendous benefits of rolling the assets into your own IRA would be the freedom and flexibility of the investments you can choose. In addition, it would provide you with the ability to have an advisor assist you with the investments as well. These two benefits may come with a cost and it is important to understand what the cost/benefit is of making this transition. You want to make sure that you are making a change for the right reasons and the decision will ultimately benefit you and your family in the end.

This decision making process is something we have walked many clients through before and we are confident we can help you as well. Please feel free to contact us, Mitlin Financial, at (844) 4-MITLIN x12 if you or someone you know has changed jobs recently, plans to change jobs, retire or simply has a 401(k) plan with a previous employer. We look forward to helping you, and them, make the decision that is best for all.

 

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

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