Category Archives: Tax Related

1099 Update – Corrected Update – Reminder, a Paper Copy is being mailed UNLESS you specifically turned it off – Holiday Weekend !

Those that follow us know we had a fun conference last week and pretty much burned the candle at both ends… We look forward to bringing you more soon!

Being the last of the four in my gang to NOT get the winter sore throat or flu… and after bragging about not getting sick AT ALL the last four years, those three fingers pointing back at myself came home to roost… GIANT head ache Saturday followed by sandpaper in my throat Monday morning… on the down hill side now….

Corrected 1099 Update1099 sho

Yesterday we sent a blast email out to all of the lucky ones who will be receiving a corrected 1099 printed and mailed one week from today …

If you did not receive the email, so far you are in the clear….

EVERYONE will receive a paper copy of their 1099 – even if you receive electronic copies of everything else – unless you specifically turned your tax copies off – no one we know of has done this and this is the one item we do not recommend you turn off unless you REALLY want to!

Holiday Weekend

Today is Friday, heading into a Presidents Day Weekend – you know the drill … banks, capital markets and those buildings holding our little ones hostage during the day will be closed on Monday – mandating our offices are closed as well… all good, again!

Have a Great “Presidents Day Weekend” Friday!

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

Job Change or Retirement? Here is a great reminder checklist – Updated

Books get updated and reprinted on a regular basis. This post is originally from several years back, but worthy of a re-post/update regularly!

So Important

Maybe you are about to Retire… CONGRATULATIONS ! ……Or maybe you are about to change jobs… exciting new times, just around the corner…

Here are a few handy reminders before/as you leave!

Job/Retirement Change ChecklistFinanicial Planning Doc

Grab that Last paycheck– Once you are gone, the internal system may be harder to access, be sure to get your last paycheck downloaded for your tax and personal recordkeeping.

RSU -Options- Grants -Make sure you are not leaving anything on the table via a vesting sunset or time line that can be associated with your departure.

Employee Stock Purchase Plan-Confirm you have control of your stock and transfer it to an easily controlled account-most ESPP plans are only holding tanks and cumbersome to make transactions.

Deferred Comp– Check on when your plan will be paying you your funds- i.e. tax year, time frame, and if all at once or over several series of payments- confirm the payments method and where they will be sent if mailed.

Pension – Get a copy of your latest balance or estimated amount, time frame of payment, if the projection is inclusive of your departure, if your spouse is included as beneficiary and his/her date of birth is correct and MOST IMPORTANTLY your correct address.

Health Coverage– You do not want to go a day without coverage, make sure you have some type of overlap such as Cobra, New company coverage, Medicare or outside personal coverage.

UPDATED NEW REMINDER – Long Term Health Coverage– If you have been at your employer some time (10+ Years usually), check to see if some type of retirement health coverage options are available. Frequently these have a one time option of opting in and if you leave, you will NEVER get another chance. We have found these to be very good options in certain cases.

401k– In most instances you want to take control of your old 401k by rolling into a self directed IRA. Make sure your final paycheck withholding has hit your 401k before you roll it over or there will be residual amount later.

New 401k– In most cases you want to allocate your new 401k aggressively- be careful NOT to overfund your old and new plan in the same year- most maximums are $18k (+$6k catch up) – If your two employers do not know about each other they may accidentally allow you to overfund the total afore mentioned amount

Severance– Be sure to get your arms around the type, amount, timing and pay and benefits.

Social Security Withholding – Withholdings may likely be over withheld since your two employers did not know about each other – keep good tax records- if they did, you get a refund.

While mentioned several times, once more due to just how important, be sure to keep your address up to date with your former employer !

Have a great ‘More Organized” Day!

John A. Kvale CFA, CFP

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

January 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our January 2019 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 format as well as Video!

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

January – 2019 Video

Financial Planning Tip (s) –

Get and Earlier than normal start on those Taxestaxes control-1027103_1280

Here in this post, we remind everyone that due to the new tax laws, it will be a good idea to get your tax information to your professional as soon as possible.

If your using tax software, be sure to do the recommended updates as we feel certain there will be necessary updates to the tables along the way.

Corrected 1099’s are the usual, with only a few last year, we will give everyone the green light once we get our first round of corrected tax forms – but again go ahead and get started with your taxes!

Stunning Findings about your old employer 401kabonded dawn-3358468__480

We had long suspected as much, but in this post we review a Cerulli study that interviewed over 800 401k providers, only to find out that less than 30% really want your funds once you leave.

We have experienced less than stellar service over the years with former employees 401k plans – leading to our long suspicion of these findings.

Make Pension Changes/Decisions Carefullythumbs-up-2056022__480

While our favorite commencement benefit for pensions (100% jt survivor) is fairly straight forward, the simplicity ends there.

In this post, we review recent trends in buy outs and what to watch for, as well as the many scenarios we have experienced that are not always in our best interest.

Capital Market Comments –

Good News – Recovery without a Re-test – So far

What a different a month makes – WOW! We literally have gone from the sky is falling to sunshine!

In our summary post in December, we mentioned that fast moving slumps, such as the one we had, frequently do not last long….

Here, earlier in the month we also mentioned that we fully expected some type of retest of those lows before we gained our footing.

We still do expect some type of re-test, but as of this date we have had the following positives that have added to the markets better mood:

  1. Federal Reserve (FOMC) have turned very cautious about raising rates further (We are happily surprised at their yielding, and even more surprised at market participants joy)
  2. Tariff talks are making progress – Interestingly, China has seen a slow down in their economy making for slightly more urgent talks – with a little compromise and statesmanship a resolve looks more likely – again a positive for capital markets.
  3. Earnings are still cranking along – For the prior 4-6 quarters, earnings were red hot and hitting on all cylinders, so hot, they were not sustainable. Companies are still reporting good earnings, just not the Red Hot, overheated earnings from prior quarters – this is good news as it avails the FOMC to not have to raise rates to slow the economy –

All in all a Win- Win!

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.
www.jkfinancialinc.com
street-cents

It’s that time of year again, Tax Season – Tax forms update and important information concerning those using a tax professional as well as Tax software – Friday

We are beginning to get 1099 tax forms, however all of them are not complete for everyone.

With a corrected schedule that lasts over the next few weeks to months, please do not file your return until we give you a greenlight and get past the first corrected 1099’s!

Please reach out to Jen at jen@jkfinancialinc.com  if you want to know if your tax form is available as we will be glad to electronically send it to you or upload it to your vault as soon as we have sight of it – please follow the next instructions.

Tax Professional and Tax Software taxes control-1027103_1280

For those using a tax professional we highly recommend that you get your information to them as soon as possible as this tax season will most certainly be much more complicated due to all the new tax laws. It would be much better to have already been in line with your tax professional and have a few missing documents than to  bring all of the information late this year.

We feel certain your tax professionals will appreciate it.

For those using tax software, we are fine with you beginning to put your information into the software, however, we would hold off on filing your tax return as we expect multiple software updates, due once again to the tax law changes!

This tax season will likely have a few curveballs as many documents that we may have used in the past, may not be needed due to the tax law changes, however don’t throw anything away, and  be sure and either give it to your tax provider or enter it into your software – let both of them tell you it’s not necessary.

It’s Friday, enjoy your weekend, and thanks so much for reading our posts!

Have a Great “Beginning of Tax Season” 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

RMD Adjustment Season – Holiday Weekend – Friday

Required Minimum Distributions (RMD) are the mandated distributions of funds from Qualified plans such as IRA’s, 401k’s and the like.

Here, here and here we discuss RMD’s and differing techniques to appease Uncle Sam/IRS in great detail…Uncle Sam

Since RMD’s amounts are based on age and prior year ending account balance the mandatory amount changes year by year.

One option we like is spreading your RMD out over the year, creating your own “Person Pension” plan – of course as long as you take at least what Uncle Sam says, you are good…

Bottom Line – this is RMD adjustment season.

Monday is a holiday in honor of Martin Luther King, and as such markets, banks and our office will be closed.

Ahhhh….. today is a Friday as we brace for the coldest front of the year – and of course an out-door tennis tournament is calling (the girls get warm in about 5 minutes – parents freeze! All good)

Have a Good 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

 

Clumping Property Tax and Deductions Reminder – Standard Deduction Maximization Strategy

Over the Thanksgiving Holiday’s several family members were surprised to find out that there are still tax law changes – well clarifications, that are going on at this time…

It is possible that there will be changes/clarifications occurring right up and through this first “New” Tax season…

Now is reminder time for taxes — but given the above — we have more of a butter knife than a tax scalpel for our surgical tax techniques — No matter …. Let’s go!

Clumping Property Tax

A joint family will receive a $24k – yes … Twenty Four Thousand Dollar STANDARD deduction – add on to this that the new limited – state and local sales tax (SALT) deduction (read property tax) of $10k annually,  planning is needed to maximize deductions.

The easiest and most common way to POSSIBLY maximize deductions is to clump your property taxes as well as other elective expenses. As you can easily tell, clumping your SALT deductions will get you to $20k so we are still not there…

Mortgages interest up to $1million in loan value prior to 2018 and $750k after is still deductible.

Bad Deduction Planning

All of this fancy acceleration and delayed of tax deductible expenses is to avoid the following –

Every year coming up with just under the standard deduction! I.e. $23k of deductions annually is likely not as tax efficient as possible…

A better solution would look like this:

Clumping Taxes

Skip years = Standard/no itemization/simple tax return

According to this AARP report earlier in 2018 the approximate 30% of tax payers who formerly itemized will drop to about 10% –

Bottom Line do not feel bad if you do not itemize, BUT you may still be able to itemize every other year, under an appropriate standard deduction tax max strategy.

Reach out with questions before year’s end – We can help you calculate what the best strategy may be!

Have a Great “Standard Deduction Maximization” 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

YEAA – Social Security Benefit Increase 2.8% – Most other Pensions to Follow too

Each year our federal government accesses the inflationary environment and makes a determination for those on Social Security as to how much, if any, of an inflationary adjustment is needed…. AKA Cola adjustment-

COLA Adjustment – Cost of Living Adjustment

Looking into 2019, those on fixed incomes with COLA or Cost of Living Adjustments, in MOST cases will see a 2.8% increase per the Social Security Administration and their flagship marker, the CPI or consumer price index…

This includes in most cases pension, and other fixed income types, as they usually (we have just run across a disconnect, but are not to the bottom of it yet) follow the same index – good for all.

Here is the last decade of adjustments from the Social Security Administration

2019 Cola SS

Social Security Tax Maximum

Ok – so the good news for those receiving fixed income could be looked at as a minor detractor for those paying the new higher Social Security Tax amount – but hey, we are all in this together –

Here is the new Social Security Tax Maximum amount with a little historical perspective for your perusal:

2019 SS Tax max and 10 year history

In 2019, the new tax maximum (said another way- the amount of money you need to earn to max your Social Security Benefit) is $132,900!

Have a great “Social Security COLA” 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