April 2014 Financial Planning, Economic and Capital Market Review (Video)

Welcome to our monthly review of the latest events of the last four weeks. With the tax season being so rough and fresh on our minds, we start with a much-needed tax related Financial Planning Tip.

Click here if not visible

Vimeo Direct Link Here

Getting the Most Out of the Sales Tax Deduction

This months Financial Planning was once again straight from the field and this time from a relative.

Those using Schedule A, receive the benefit of deducting a pre-set amount of sales taxes based on your income, zip, and number of exemptions OR using your actual sales tax that you have paid over the year.

This is from the IRS’s website

If you didn’t save all your receipts, you can still choose to claim state and local sales taxes. You could fill out the worksheet and use the optional general sales tax tables in the Instructions for Schedule A (Form 1040) , but why not take the easy route and use the Sales Tax Deduction Calculator!

Take note of that friendly last comment from the IRS.  Most of the time the easy route is probably best, however if you have any of the following, consider double checking your “easy route” amount versus your paid:

  • Car Purchase, boat, aircraft or lease vehicle
  • Substantial additional renovation of home
  • Unusually large taxable purchase of any kind
  • Easily accessible receipts (often via debit cards or other easily traceable sources)

Capital Markets, Gold, or Rates ?

Recently I challenged a group as to what they thought were the most important item currently, choosing from the Dow, Gold or interest rates.

Hands down, interest rates. This is the 10 year treasury rate, seen hovering over the voodoo chart line.

10 Year Treasury 5-1-14

We are watching this closely as we just do not know why it is persistently staying so low. Late in April the FOMC lowered their bond purchases by another $10 billion monthly. Recall these purchases were to keep rates down. Doh… Seems as if rates do not know they should be rising.

Have a Great Day!

John Kvale CFA, CFP
8222 Douglas Ave # 590
Dallas, TX 75225

Leave a Reply