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Finding My Tribe at Wealth/Stack

I recently had the opportunity to attend the Wealth/Stack Conference in Scottsdale, Arizona. There are so many conferences for our industry that it is sometimes hard to determine what will be a good one to attend and which will not be a good use of your time. I must say, Wealth/Stack was a great conference and worth the time I spent away from the office. This conference, being held for the first time, brought 700 plus attendees who represented a “Who’s, who” of the #FinTwit and Fintech community. It was also the first conference that I have gone to where the vast majority of attendees were advisors.

The sessions were all informative, helpful and interesting, hands down, but I want to spend my time sharing with you the sense of community that was projected at this event. Some would say that many of the attendees were competitors to a degree, but that was never felt. What I did feel was a community of likeminded people coming together to help, support and bring each other’s respective businesses to the next level while providing the best level of advice and service for their clients.

During the few days I was at this conference I connected with people I knew, met others I had never met previously in person and those that I met for the first time. Each conversation I had allowed me to learn something new or build a relationship with someone that I wanted to stay in touch with so we could continue the conversation. This conference allowed me to find my tribe and put us all in a position to learn and grow together.

As we go through life it is important for us to find our tribe, community, which helps build you up and inspire you. Wealth/Stack did that and more. I have a community of experts in all different areas of financial services following this trip, from all over the country. This community will be valuable to me and my clients as time goes on. I have seen this in a few other areas of my life, the author and hockey communities. Like the financial services community, the author and hockey communities also serve to build up, inspire and help those that are part of it.

It is important to find your community and become active in it. Once you find the right community you will know as you will feel inspired, feel great about what you do and know that you have a network of others like you there to help in a moment if needed. Thank you Wealth/Stack for providing a great opportunity to learn and grow!

 

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

What you should know about Investment Accounts, Capital Gains, Income

 What you should know about Investment Accounts Capital Gains and Income

Investing is a complicated topic that many do not fully understand and they rely on their advisors to assist them through the process of investing and becoming retirement ready. Taxes are an area that cause significant confusion and the fact that they have a tendency to change over time adds to the confusion.

Taxes on investment accounts can come in several forms and we will discuss some of the most common types along with strategies to help you over time. We touched on this topic in a recent article, Tax Planning Is A Year Round Concern, and we will expand on it here.

Income from investments can come in several forms, such as dividends and interest. The best type of income, especially for high net worth clients, is tax free income. This income will not be taxed, assuming it is tax free on both the Federal and State level. There are investments that will pay tax free income that will only be federally tax free and it is important to be aware of this, especially if you live in a State that has a high income tax bracket. The majority of interest and dividends will be taxed as ordinary income, unless they are a qualified dividend. This will typically be your highest taxed form of income generated from your investments. In these cases, unless you are in need of this income to live on or are in low tax bracket, it would make the most sense to try and place these types of assets in a qualified account. This would allow you to own the asset and not pay taxes on the income.

Capital gains are another consideration when it comes to taxes on investments. These types of gains are broken down into short term, less than twelve months, and long term, longer that twelve months. Depending on your income, the taxes owed could vary widely. The higher the tax bracket you are in, the larger the difference. Short term capital gains are taxed as ordinary income and will be taxed at your normal tax bracket. However, if you hold the asset for twelve months and a day the capital gain becomes long term providing a maximum tax of twenty percent (depending on your income tax bracket) on the Federal return, plus the State tax owed. This could amount to a significant difference in tax and you will want to make sure you are holding assets, if you can, for the long term in order to maximize your tax position. In the instance that you are looking to purchase an investment with the intention of only holding it on a short term basis, we would recommend placing this asset in a Qualified account and avoid the capital gain altogether.

We know that clients do not like to take losses, but sometimes it makes sense for you to bite the bullet. We recommend that you, along with your advisor, review your portfolio each November to evaluate gains and losses for the year. Long term and short term gains and losses will net out each year and you can develop a picture of what your capital gains will be for the year. Based upon the review, it may make a lot of sense to sell an asset at a loss and negate some of your overall capital gain. At times, we have seen clients that understand they need to do this in order to mitigate their tax liability, but at the same time are still confident the asset will work out long term. In these cases, you can double up the position thirty plus days before the end of the year and on day thirty one, in order to avoid a wash sale, sell the initial lot for the loss. This will provide you with the opportunity to capture the loss and still own the position, while participating in the upside potential of the holding.

Planning like this is an important aspect of working with the right advisory team. This type of review should take place with you, your wealth advisor and your CPA annually to make sure things are being done in your best interest. It is key to have your CPA and wealth management firm on the same page with a good working relationship. This is why we always look to build relationships with our clients’ tax advisors. 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, has questions about how taxes like these will affect them 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.

Follow The Leaders

RegisteredInvestmentAdvisor Follow The Leaders 06202019                       RegisteredInvestmentAdvisor Follow The Leaders 2 06202019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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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.

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