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Three Things to Consider Before the Year Ends

Have you thought about these things as you wrap up 2018?

Believe it or not, Christmas is 12 days away – you all know the song, sing with me! Actually, I did a little research lately, and found that the 12 days of Christmas start on December 25 and run through January 5. But, I wanted to give everyone the head’s up that our office will be running at full capacity until December 21. We’ll be closed for regular business on the 24th & 25th, with a skeleton crew running things from the 26th until January 7, when we’ll resume full functionality and all Christmas and New Year’s festivities are over. So, if anything I mention in this newsletter creates the need for you to contact us, please do so in the next 10 days so we can take care of you. 

I’m having a lot of conversations with our client families right now about charitable gifting. Some of you are giving cash gifts or writing checks, and others of you are giving appreciated stock from your brokerage accounts or IRAs to reap those deduction benefits. Keep in mind however, that the tax rules have changed this year, so if you’re in the habit of making charitable gifts, we suggest you have a conversation with your accountant before you make the same gift you’ve made in years past. 

Many of you have been in this habit for some time, and we love and encourage that. But, the deduction might not be what you’re expecting based on past tax laws, so be aware of that. Also, for those of you who are making gifts from your portfolio, please make sure to get that paperwork to our office by December 20 so we can take care of that for you. (Tax and/or legal advice is not offered by Family Financial Partners. Please consult your tax professional for additional guidance regarding tax-related matters.)

For all of you retirees out there who have taken money from your IRAs in 2018, now is the time that we receive a lot of requests for additional funds because you want to write some extra checks to the kids for Christmas, or for a family trip, or to pay for that new HVAC because your old one decided to give up the ghost this month. Trust me, we understand that life happens! 

However, depending on how much you’ve taken out and your current tax bracket, this is one time when it might be beneficial to use that line of credit, or put those expenses on a credit card for a month, and wait until January to take additional funds from your IRA. Remember, your tax bracket resets to 10 percent on January 1. So, if your current bracket is 24-37 percent, waiting a few days to pay that bill might not only make cents, but save you tax dollars. (See what I did there?)

Finally, I want to talk about capital gains. For those of you who have Envestnet investment accounts with us, 2018 was an active year, and hopefully, we’ll still see an end-of-year rally from Old St. Nick. 

But, some of those changes have realized some long- and short-term capital gains in your portfolios. We are planning on realizing some of the unrealized long- and short-term capital losses to help offset the capital gains taxes that will be due by the April IRS deadline. You may see some activity in those portfolios that’s not necessarily based on our opinion of the companies we own. However, due to recent market volatility, we have the opportunity to book losses that will help offset those capital gains taxes you’ll owe in April of 2019. 

As always, as my team and I are making our plans and setting our goals for our business in 2019, we welcome your comments and suggestions. Is there anything we can do to make your experience working with Family Financial Partners better? Please, give us a call. And please do use the phone – in our industry, “constructive criticism” emails may be considered customer complaints, and are not looked on favorably by our compliance department! In all seriousness though, I do love to hear what you have to say. Your feedback makes us stronger. 

I look forward to a prosperous new year, and I truly do value the opportunity to work with each and every one of you. On behalf of our entire team, we appreciate that you’ve chosen to work with us. And, as you’re gathering with family and friends this holiday season, please, keep us in mind. If you think of anyone we should meet, pass their information along so we can add them to our weekly thoughts, and perhaps sit down over a hot cup of coffee. 

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