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!
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!
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!
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!
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!
Welcome to our Video and Audio Podcast Review of our Q1 2023 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.
Click the Download button below, for a direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page
Entering the 36 year in the Financial and Capital Markets world, a lesson was learned this year (see below) we want to thank everyone for their well wishes, patience and confidence as we went through a unique “Changing of the Tiger Stripes” event this year!
Higher Rates – Longer – CPI Stubbornly High
CPI Causes Tiger Stripes to Change?
Very Lagging Rent and Shelter Numbers keep pushing CPI
Estate Tax Laws Set to Change – Heads Up
At the end of 2025, putting January 1, 2026 into play, without any tax law adjustments the Estate Tax level will adjust back down to somewhere between a $7 to $8 million or $14 to $16 million for couples level.
While Estate Tax is not a huge revenue earner for the IRS, in our opinion Estate tax is in purpose is to affect the very largest of the states think $100 million and up.
Additionally the IRS is having trouble completing regular federal tax returns, by some estimates some 15 to 20 thousand taxpayers are still waiting on their regular federal returns to be blessed by the IRS from 2020 to present. Lowering the Estate Tax level to an extreme low, while may sound good in the headlines, impracticality, it will likely create a huge bottleneck and more trouble than money earned.
Ya ya … it was 100+ degrees for like 60 days this summer….those afar go ahead and giggle (many have already jabbed- tha’s cool and deserved – haha)… in the 20’s suddenly and the schools in our area were closed T-Friday — Make up Weather days here we come…. amazing how out of sorts the schedule can get with just a few snow days….digressing
With some business and pleasure travels planned – south and north soon, early work on posts are on deck… Want to talk more on AI (Artificial Intelligence) if you missed it, we spoke about it here- who knew it would be so cutting edge… not us – and our good ole friend Federal Funds Rate which were raised this week….
Ahhhhh….today is a “Thaw out Friday” and “See how much School can be forgotten in Three… no Four Days” Weekend…
Wishing everyone a Season’s Greeting, Happy Holidays and a Merry Christmas!
As a “Heads Up” in the Financial world, there is a Bill (Secure Act 2.0 aka HR 2954) going through Congress that is likely to pass before years end … Recall in late December of 2019 Secure Act 1.0 was passed and signed into law, only to be lost in the multitude of laws around the virus and relief…
While not into law yet…. a few high points include:
Another increase in RMD (Required Minimum Distributions) age to 73 – currently age 72
401k and other similar increased contribution levels
Will keep you posted… but wanted to let you know we are watching closely!
This is pressure for now, but pleasure as our income from our fixed pays out more!
When the Fixed Income market breathes, rates typically go down in a slowdown…. even with the Fed raising short term rates… actually especially when they raise short term rates…
Have a Good “Temporary Pressure Eventual Pleasure” Day!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
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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
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Posted in Audio, FOMC, General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Retirement Planning, Video
Tagged Contra bounces, Contra Rally, Homestead, Homestead Property, John Kvale, Monthly Review, Roth, Roth Donation, Roth Gift