For most of our lives many of us have heard the old adage “Money can’t buy happiness.” And we can all think of numerous examples of individuals where this certainly seems to be true – whether among the powerful and famous, or within our own family or group of friends. But is that really true? Research over the last few decades suggests “NO!” In fact, many studies show that in one sense money can buy happiness. But it’s not the amount of money we have, but rather how we SPEND our money that can indeed increase our happiness – although perhaps not in the way Madison Avenue or Amazon Prime would like us to think. First, let’s address the skeptics among you who feel sure that if you simply had MORE money you would indeed be happier. Statistics show that certainly isn’t true, since 70% of all lottery winners or those with a sudden financial windfall end up bankrupt within a few years.1 Carl Jung, famous psychologist, said in fact that the keys to happiness were five things.
Atlanta Financial Newsroom
The New Tax Bill: Tallying the Results
“How did the new tax bill affect me?” was the question on everyone’s minds this tax season, and for good reason. Even though this was touted as the greatest simplification of the tax code in my lifetime, I didn’t notice any reduction in time spent preparing returns. Those of you who reviewed your returns in detail noticed that the schedules look drastically different although contain all the same information. The short answer for many is that it didn’t materially change your overall tax liability. The outliers fell into one of a few buckets:
– Those that paid more in taxes: These were generally married couples or individuals with W2 wages in excess of $250,000. Because the new tax law limited the amount of state income and property tax deduction to $10,000 combined, for those with higher incomes and living in a home or area with significant property taxes in excess of $10,000, the loss of ductions led to a higher overall tax.
– Those that paid less in taxes: These were generally business owners who benefited from the 20% passthrough deduction; couples with children whose income previously adjusted them out of the child tax credit but are now were able to benefit from the $2,000 child tax credit; or those that had comparable income and deductions to prior year, but benefited from the lower marginal rates.
My takeaways and planning tips coming out of tax season are:
– Whether self-employed or working and receiving a W2, reach out to your CPA or tax professional during the year and have them review the amount of tax being withheld or your estimated tax percentage to ensure you know where you stand and won’t be surprised next year at tax time. It has become apparent through news stories that companies made mistakes when adjusting withholding and many employees had less withholding than needed.
– Many retirees will take the standard deduction of $26,600 as most of our clients do not have mortgage interest to deduct and do not pay enough in property tax or state income tax (due to the Georgia retirement income exclusion or Alabama pension income exclusion) to deduct the full $10,000.
Therefore, charitable giving should be done directly from your IRA. This will reduce your overall AGI and could help with taxability of Social Security and/or Capital Gains and will allow for you to still receive the tax benefit from giving to charity. If you are charitably inclined, contact your advisor to discuss whether a Qualified Charitable Distribution makes sense for you, and how we can assist with the details of making these kinds of contributions.
“How did the new tax bill affect me?” was the question on everyone’s minds this tax season, and for good reason. Even though this was touted as the greatest simplification of the tax code in my lifetime, I didn’t notice any reduction in time spent preparing returns. Those of you who reviewed your returns in detail noticed that the schedules look drastically different although contain all the same information. The short answer for many is that it didn’t materially change your overall tax liability. The outliers fell into one of a few buckets…
What would you do if you received a major financial windfall? Would you buy a new house or vacation home, give some to your family members, donate to your favorite charity, or take the trip(s) that you have always dreamed about?While most people will not receive a major financial windfall during their lives, it is not uncommon. You might receive a financial windfall by:
When I first sit down with prospective new clients to learn about their finances, one of the most common issues we come across is how spread out investment accounts are. We may have a brokerage account here, an IRA there and, very often, an old 401(K) or two still sitting in a previous employer’s plan. There are plenty of reasons why a 401(K) may be left behind with a prior employer – it could have gotten lost in the shuffle of beginning a new job, it may have just seemed like too much of a hassle to move the plan, or perhaps you took the time to roll the plan into an IRA but your employer made subsequent contributions you didn’t know about. These accounts, affectionately referred to as “orphans,” are becoming more and more common given the increasing frequency of job-hopping, especially among Millennials. So, who do these orphan accounts belong to and more importantly, what can be done about them?