Category Archives: Investing/Financial Planning

January 2023 – YES Already One Month Down – Financial Planning and Capital Market Review – Roth Donation – Homestead – Contra Rally reminder – By John Kvale CFA, CFP

Hello and Welcome to our January 2023 … YEP 2023 !!! Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!

Hope you enjoy!

New Laptop – Looks Like the Old One – But not so much!

January 2023 Video – Note New Intro and Theme Music


YouTube

Financial Planning Tip(s)

Give a kid/Young Adult a Roth if they Meet the restrictions

By blending a couple of Tax laws and having at least $6500 in earnings, a young adult may be just the right recipient of a gift, but to a Roth Retirement plan rather than for spending….

Gifts up to $17k per person are free of gift/estate tax issues – blend that with at least the Roth amount of earnings and a donation directly to a Roth can be a super gift, all of which we discuss here in our January post!

Purchase a New Home last Year – Check that Homestead Exemption

In one of our annual reminders, in this post we once again remind those that purchase a new home last year, that if they are in the home as of January 1 in most/many cases, you may be eligible for a Homestead Deduction aka – Property tax savings….

We also updated a large but not complete slew of state related adjustments – thanks Wikipedia!

Capital Market Comments

Watch the Contra Rally – They can be very deceiving!

With a suddenly happy faced Capital Market, we remind ourselves and everyone else Contra Rallies can seem very soothing, but often times their main result is to have you let your guard down and draw one into a sudden overconfident situation… NO biting…

Have a Great Day, Talk to You at the End of February!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Did You Buy a New Primary Residence Last Year? – Homesteading Your Property – Most States are January 1st Residence Requirement – Possible Property Tax Savings –

Because of the various state rules and regulations, we want to remind you that this post is not meant as a guide, but only as a reminder, if you are in the appropriate state, and in the appropriate situation, you may be able to Homestead your home, saving your property taxes (property tax exemption.)

If you hit up Homestead on your favorite search engine you’re likely going to get an article about moving to the country somewhere and building a log cabin home to retire.

That’s not what this is about.

landscape-3417201__480 homestead

We want to remind those especially that live in Texas who may have moved into a new home on last year on or before January 1st to be sure in Homestead their home in order to have a significant savings on your taxes.

Those living in other states should check their central appraisal district website to see the rules and regulations – this is likely a timely reminder as most just paid the property tax … or are about to pay them.

Not all states offer Homestead exemptions and many states do offer them but do no good because of the tax structure of their states, thereby making it important that you check each situation.

All of the above being said, using our home state of Texas as an example, there is a significant tax savings by homesteading your home.

From Wikipedia

In many states, including Texas once again, there are very special exemptions for those age 65 and it’s likely the January 1 residence date may not apply for those turning age 65. Special tax considerations are given for those 65 and older to school, property, other taxes with frequently freezes in escalations as part of the exemption … In order to qualify, you most likely will need to raise your hand (fill out another form) …notifying your taxing authority of your new tax saving age.

Property tax exemption

A homestead exemption is most often on only a fixed monetary amount, such as the first $50,000 of the assessed value. The remainder is taxed at the normal rate. A home valued at $150,000 would then be taxed on only $100,000 and a home valued at $75,000 would then be taxed on only $25,000.

The exemption is generally intended to turn the property tax into a progressive tax. In some places, the exemption is paid for with a local or state (or equivalent unit) sales tax.

Examples

  • California exempts the first $7,000 of residential homestead from property taxes.
  • Colorado allows a 50% deduction for up to the first $200,000 (equivalent to a $100,000 exemption if the property is valued at $200,000 or above) for seniors (over age 65) who have lived in their property for ten consecutive years.
  • Georgia allows a 1% HEST only in a few counties.
  • Florida‘s homestead exemption allows an exemption of 160 acres outside of a municipality and one-half an acre inside a municipality.[5]
  • Kentucky, for 2019 and 2020, the exemption has been set at $39,300. Once it is approved, homeowners who are 65 or older do not need to reapply for the homestead exemption each year.[6]
  • Louisiana exempts the first $7,500 of residential homestead from local property taxes.[7]
  • Michigan exempts the homeowner from paying the operating millage of local school districts.
  • Mississippi exemption from all ad valorem taxes assessed to property; this is limited to the first $7,500 of the assessed value or $300 of the actual exempted tax dollars.[8]
  • New York‘s School Tax Relief (STAR) program exempts the first $30,000 of a primary home’s assessed value from school district taxes; the exemption is limited to owners with incomes under $500,000. Additional exemptions are available for people over 65 with a limited income. The STAR program applies only to school taxes; no homestead exemption exists for taxes levied by other municipal entities. New York prevents a New York resident claiming this exemption if the New York resident owns property in another state and claims a similar exemption in that other state.
  • Oklahoma allows a $1000 deduction of the assessed valuation, about $75 to $125 of savings per year, if owners file for homestead exemption with the local county clerk.
  • Rhode Island exempts the first 20% of the home value from property taxes.
  • Texas allows a deduction, with additional exemptions available for county taxes, people over 65 and people who are disabled. It also requires school districts to offer a $25,000 exemption (but not other taxing districts, such as cities and counties).[9] Texas further limits the assessment increase on a homestead to 10% of the prior year’s value.

In most cases, there is a deadline for filing your Homestead Exemption, so do not dilly dally around or you may lose that tax savings at the end of this year or early 2024!

Just a friendly reminder to jog your memory, and maybe give you a nice tax savings!

Have a Great “Homesteaded Tax Savings” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Contra Rally Reminder … New Laptop … Cold Friday

In slow downs, things called Contra Rallies occur … we have mentioned this before, here, here and here and as the reminder chart below shows, they can be very large …

We are optimistic at heart but also realists when it comes to economic data and the effects of higher interest rates on the economy. And OH… the rallies can be big as the chart above, again from prior post exhibits.

We will call your attention to Contra Rallies relative the “sharp pullback” during growth times when that chapter finally arrives…not to worry it will…

Technology Dog Years

With a call to our IT folks due to a humming fan in the favorite dear laptop…. an assessment was made that the “Dear Laptop” was nearing the Century mark in computer terms…. With a new one in hand, almost identical to the old but with all the latest platform and security, let the downloading of programs and setting of shortcuts begin….already liking the faster hardware speed, clearer screen and speaker quality – yay

Cold Friday and Weekend

Traveling back over 1200 miles south to a Colder Climate was a bit surprising….But, hey it is a Friday and it is Texas… “If you do not like the weather, just wait a bit, it will change!”

Enjoy your Friday and maybe a Fire if you are near in proximity, and your weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Give a Kid a Roth … A Donor’s Heads up/Reminder!

A while back we first came across the neat Tax/Retirement/Donation/Savings technique utilizing low/early career income relatives (think young kids/adults) of basically helping them fund a Roth IRA.

Give a Kid a Roth – Blending Tax Techniques to Accomplish

We all know starting early greatly helps our future retirement planning chances… Marry that to tax free growth AND under CURRENT Tax laws, Tax Free withdraws, and we have a neat plan.

Let’s blend some tax techniques and get this accomplished:

In the year 2023 we can give $17k to basically anyone without causing a Gift tax event…. the max for young earnings is $6500 into a Roth this year!

Have a Child/Grandchild/Relative or special young person in your life? If they have at least $6500 in income this year, consider giving them a Roth IRA to help jump start their retirement…. the earlier the better of course.

Kids working at your or a relatives business? Consider funding a Roth with their income… maybe a well earned bonus goes directly into the Roth?

Make sure the young earner does not over save in their Retirement plans – Max into a 401k is $22,500 this year and that includes a Roth contribution… so do not overfund.

Watch the top end of annual earnings as well… from our Tax Page Right here on our Blog

Lastly…the Sizzle —

Just one $6500 Roth for a 15 year old, growing at 8% annually, will be worth a whopping $300k+ at age 65 … do that three times to get to a million… and that is tax free withdrawals at retirement! NICE!

Have a Great “Give a Kid Roth” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Tax Time Reminders … Friday

It is hard to believe but YES it is already tax time again….. Couple of reminders here

1099’s – think big tax packet that shows all the interest, gains and losses and basis information is generally due February 15, 2023 – This is on a best effort basis and given mail services and reporting by the respective investment companies delivery, can be delayed…

Ahhhh… here is the big date, First Corrected 1099’s are scheduled on March 9, 2023 with the second corrected March 16, 2023….

We would generally ask everyone (you guys know who you are the early filers) to wait until after the Second corrected before filing that return!

Ahhhh,,,today is a Friday and feeling a bit under the weather so will keep this one short! Enjoy your Friday and weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

M2 Turns Negative for the First Time and that’s a Long Time!

There are tons of measuring sticks out there…. almost all of which we look at and follow, at least at one time or another…..

What grabs our attention is when the measuring sticks do unique things….or have never happened before!

M2 – aka Money Supply

According to Investopedia M2 is best described as the following:

M2 is the U.S. Federal Reserve’s estimate of the total money supply including all of the cash people have on hand plus all of the money deposited in checking accounts, savings accounts, and other short-term saving vehicles such as certificates of deposit (CDs). Retirement account balances and time deposits above $100,000 are omitted from M2.

Check out the latest reading of M2

While close in 1994, it stayed positive, for the year 2022… M2 was a negative for the year for the first time ever!

Note also as compared to 1994, the rapid draw down in 2022…

Why are we watching this?

This draw down of money in the system may put pressure on certain risky players i.e. Companies that use Junk or High Yield Debt!

Just a heads up to let you know what we are watching!

Have a Great “M2 Analysis” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

529 to Roth Possible New Rule from Secure Act 2.0 … Long weekend … Friday the 13th!

While researching the afore mentioned Secure Act 2.0 about a week ago… recall this 4200 page monster was released on December 27th, 2022 …

Some talk in the beast is about unused 529’s being able to roll over into a Roth….

This caught the eye/ear and a note was made. A possible use of this came up this week, so further research is needed as there were a ton of hurdles (like a 15 year waiting period, just to name one) to allow this transaction AND we will likely have updates during the year to clarify this possibility.

With a use already a possibility, we wanted to bring this to your attention and let you know we will be doing further research for clarity! yay

Long Weekend

Monday is a Holiday in honor of Martin Luther King day, as such banks, government offices and our office will be closed as well.

Today is a Friday the 13th spooky … enjoy your day and the weekend…talk next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Fourth Quarter 2022 Review, Bill(s), Rates, Bills and Sunshine – Private Policy, Annual Offerings

Dear Investor:

Bill(s)

On December 20th, 2019 the Secure Act was singed into law. On December 27th , 2022 the Secure Act 2.0, a bill long in the works and a mere 4200 pages long was signed into law. The most important item in the financial world (there were a multitude of areas addressed) as the second upping of RMD’s to age 73. Look for more information soon from us.

Rates

In December the FOMC (Federal Open Market Committee) led by Jerome Powell raised rates to over 4% after starting the year at zero.  As mentioned in our Q1 2023 Newsletter article (Maybe a Tiger can change Stripes0, on a percentage basis this would be a possible once in a lifetime speedy move.  This may also be a return to a normal interest rate policy (hopefully) with no intention of going to the zero boundary again.  See Next point.

Bills

Not getting too wordie, but US citizens “bills” or the increase in them in the form of food, travel, energy, housing just to name a few are what is creating the opportunity of the afore mentioned speed of rates or rate increases. The CPI (Consumer Price Index) measurements continue to hold at much loftier levels than anyone thought possible (somewhat due to lagging indicators) and are allowing rates to rise and likely stay higher for longer.  This is a good thing for our safe assets aka Fixed Income/Bonds thankfully as most of the headwinds are likely behind us, again see Q1 2023 Newsletter lead article and associate graphs.

Sunshine

Last year at this time we were reviewing items such as “Anatomy of a Slowdown” and “The R” Word – Recession.

Today, from our unique “Personal Reflections” portion of our Q1 2023 Newsletter :

“Future is better

Just as we pointed out over a year ago what a slowdown looks like and that it might occur, we are now ready to point out later on this year it’s very likely the clouds of higher interest rates and two feet on the economic brakes by Powell are likely to clear.”

This is also the time we attach our Private Policy Statement for the year, along with our opportunity to offer our latest ADV filings and Client Relationship Summary (Form CRS); Requests for review will be accepted via phone, mail or email, and mailed immediately upon request.

Happy Turn of the Calendar, and Best Wishes for the Start of a New Year!

Sincerely,

John A. Kvale CFA, CFP

Enclosure (2022 Report)

J.K. Financial, Inc.

PRIVACY POLICY NOTICE

Our Promise to You

As a client of J.K. Financial, Inc., you share both personal and financial information with us.  Your privacy is important to us, and we are dedicated to safeguarding your personal and financial information. 

Information Provided by Clients 

In the normal course of doing business, we typically obtain the following non-public personal information about our clients: 

  • Personal information regarding our clients’ identity such as name, address and social security number;
  • Information regarding securities transactions effected by us; and
  • Client financial information such as net-worth, assets, income, bank account information and account balances.

How We Manage and Protect Your Personal Information

We do not sell information about current or former clients to third parties, nor is it our practice to disclose such information to third parties unless requested to do so by a client or client representative or, if necessary, in order to process a transaction, service an account or as permitted by law

In order to protect your personal information, we maintain physical, electronic and procedural safeguards to protect your personal information.  Our Privacy Policy restricts the use of client information and requires that it be held in strict confidence.

Client Notifications

We are required by law to annually provide a notice describing our privacy policy.  In addition, we will inform you promptly if there are changes to our policy. 

Please do not hesitate to contact us with questions about this notice.

ES Payment Reminder … Confirming another “NEW” RMD (Required Minimum Distribution) age of 73 … First Week in the Books … Was a busy but good one!

Attention all ES IRS payment filers….January 17th is our due date this year for our Q4 2022 Estimated taxes!

With continued slow mail, we still like to direct everyone to the electronic filings of your state and the Federal payments system.

Tax Due Dates

Payment Due Dates


You can pay all of your estimated tax by April 18, 2022, or
in four equal amounts by the dates shown below.
1st payment . . . . . . . . . . . . . . . . . April 18, 2022
2nd payment . . . . . . . . . . . . . . . . June 15, 2022
3rd payment . . . . . . . . . . . . . . . . . Sept. 15, 2022
4th payment . . . . . . . . . . . . . . . . . Jan. 17, 2023*

  • You don’t have to make the payment due January 17,
    2023, if you file your 2022 tax return by January 31, 2023,
    and pay the entire balance due with your return.

Electronic Payment of ES Taxes

Here is the IRS tax website link, which is very easy to make electronic estimated taxes. Be sure to follow the instructions carefully as there are a lot of different options for making payments to taxes, and be sure to carefully enter your personal information so the IRS knows it’s you.

RMD Changed (again) this time to 73

As mentioned earlier, those turning 72 in the year of 2023, your new RMD age starting time is now 73! yay…. boy do they keep moving this target… at least farther out!

Hope you had a Great first week of the year… we were busy as expected, thanks for your patience on any delays!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

December 2022 Financial Planning and Capital Market Review – Secure Act 2.0 – By John Kvale CFA, CFP

Hello and Welcome to our December 2022 … Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!

Hope you enjoy!

December 2022 Video


YouTube

Financial Planning Tip(s)

Secure Act 2.0 – Passed on 12-27-22 Quietly …. Shhhhh we are working through the details

On December 27, 2022 a HUGE bill … over 4000 pages, was passed…. while not sweeping in our neck of the woods, there is one main adjustment….

RMD – Required Minimum Distributions are pushed out again to age 73! Not Kidding!

Capital Market Comments

Rate Increase – Fed Raised rates for the Holidays

In December the FOMC (Federal Open Market Committee) led by Jerome Powell raised rates, but only by .50% … but it was a raise…

Have a Great Day, Talk to You at the End of January – Happy 2023!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents