Early in the month, here in this post, we review the new contribution levels, rates and maximums.
As suspected, we have reviewed this ourselves a ton of times already as 2019 and 2020 levels blur during conversations…
Homesteading Reminder
In our article here, we remind all of those who may have changed primary residence last year to check their homesteading provisions as this can be a significant saving, depending on your situation.
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.
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 2013 and 2014, the exemption has been set at $36,000. 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 $75,000 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.
Helping Close Relatives or Others
During the month, we had multiple Financial Planning questions for close relatives and friends, which were asked, but some what hesitantly…
Wanting to reinforce the fact that we are glad to help, in this article we remind everyone we are not only flattered by the question, but VERY happy to help!
Tax Forms and Information Reminders
In another handy reference post, here, we discuss the tax form alphabet and more importantly, note the due dates and expected delivery times of the most common tax forms….
1099- R and 1099 Miscellaneous cover 95% of most folks reporting!
We know, it’s tax season again…not everyone’s fav…but we are trying to help make it easier.
Capital Market Comments
The markets finally took notice of the CoronaVirus. As scary as the virus is, modern day medicine and the actual fast spreading of the event and comprehension, unlike SARS which we remember well will likely help stem the fears and spread of the virus.
Have a Great Day – Talk to you at the end of February!
Here are the new 2020 Tax Rates, Retirement Contribution Rates and a few other Handy reminders to start the year…
A Great Resource for all your tax needs is none other… www.irs.gov… we all pay for it, and it has abundant information…not to worry, they will not know if we are reviewing the site (no increased chance of audit..haha)
Welcome to our Video and Audio Podcast Review of our Q 3 2019 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 Here for 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
We had planned on leaving this out due to repeated appearances here in our blog and in the Newsletter – but in true “Break In” like format, as this post is completed and the video – hopefully the local wifi is strong enough for uploading … the time is spent in Austin Texas at this moment in another rain delay- the same exact place the original article was written!
Tax Talk/Review
Change Likely the New Normal
After two decades of only minor changes in the Tax Law… it was overhauled and many changes were made that were reflected in our 2018 tax returns.
This neat chart is a nice reminder of the current brackets and can be helpful in income distribution tax bracket management.
Inverted Yield Curve Update
This chart featured in our Newsletter is a slightly different term comparison of the 2 year (we like the 90 day) versus the 10 year, but a wonderful historical view of inversions and recessions. We have fully inverted for over a month now and if we use this historic guide as our yardstick a recession would be in the cards mid year 2020!
Social Security Update
We have begun a detailed review of the late spring event and it is going great. Weekly we dissect a section of Social Security Expert, Tom Clark’s presentation and give handy links to greater details and explain in bullet fashion the main points. Here is a link to the Audio on a special page here at our blog and you can also click here for a link that will pull up each complete post!
There are tons of nuances regarding Social Security, Disability, Death Benefit and Medicare decisions…we look forward to discussing many more with you as the summer weeks occur!
We hope you enjoy … talk to you near the end of Summer!
The general rules of Social Security are to wait until as long as you can. In our post here, and the chart below, may give pause to that thinking.
Many situations are different, deeming great thought and analysis needed before commencing OR delaying your Social Security Benefits.
Favorite Pension Benefit Option
Joint Survivor – As mentioned above in our Social Security review, situations vary. While our favorite options for Pensions is the 100% joint survivor –
Less Changes in the future
Straight forward
Simple
As mentioned in greater detail, in our post here, consider all options before making your final decision as this one is irrevocable !
Capital Market Comments
Turns Out, Over the Long Term Earnings do Drive Markets
With earnings booming and Capital Markets treading water, this chart caught our eye and in this post we discussed in greater detail current earnings AND the fact that over the longer term (see chart below) markets do EVENTUALLY react to earnings.
Have a Great Day – Talk to you at the end of August!
Welcome to our Video and Audio Podcast Review of our Q 3 2018 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 here for 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
BREAK IN : Summer Project Update – Finding Your Lost Money
Wow, we have had fun with this — our biggest find so far is a little over $5k AND COUNTING – keep your eyes on your email for a summer present if we are fortunate enough to find lost funds in your name – also send us your relatives who may have fallen out of connection with … well their hard earned money!
Financial Planning Tip (s) –
To Itemize we must CLUMP
In our clumping post here, we discuss the need to clump – look no farther than the following hand written graph for the reasons- Standard deductions and limited itemizations make it hard to do every year!
Handy Travel App
This is one of the few apps that has paid for itself many times over in less than a year. Not to mention the convenience or quick, email forwarding logging of the trip. That is just the tip of the iceberg as mentioned in our article here.
Updated Tax Rates Compared to 2017 – Personal
This nice chart from the Tax Foundation shows pretty much across the board – see more details here and our coming Newsletter
Expect much more on this throughout the coming months as we dig DEEP into the actual rates and the planning techniques necessary to optimize our tax liability …. One Important five letter word…. CLUMP – more later on this in our Newsletter
Capital Market Comments
Stunning 50% Drop in Public Companies
Over the past several decades, there has been a greater than 50% – yes, 50% drop in publicly traded companies in the USA – same demand, less supply may make for higher prices moving forward- or at least the sustainability of higher than historical prices- read more here and our Newsletter!
Have a Great Day – Talk to you at the end of July!
While there is much to be debated, approved, voted and bantered before any final legislation is likely approved, there is one very interesting tax item we are keeping our eye on.
Major Increase in Standard Deduction
So far the GOP and the new president seem very strong proponents of a HUGE increase in the standard deduction. Currently the talk is $30k for joint filers. The current standard deduction is $12,600.
Digging deeper into the facts, a couple of probably outcomes may be seen:
A married couple with no kids or dependants and negligible deductions really get a big break
Larger families may actually come out worse as there is currently talk of eliminating standard deductions (think dependent kids)
Itemization may be much less – this may be a goal of the new plan- with such a higher standard deduction, those on the cusp of deductions may not even be close anymore
We will keep our eyes on this one and update you as clarity occurs…..interesting though !
With the ongoing debate about the future of tax rates, we found this chart, from the Financial Times based on IRS data to be very interesting.
With the possible “tax cliff” (sudden increase of tax rates if no congressional changes are made) coming later this year, this graph may be handy to reference as well.
Our thesis remains that as long as we have gradual and unsurprising movement, digestion can occur. Sharp snaps or sudden moves would not be advisable, but the IRS and bureaucrats have not been listening to us lately (ever..haha.)
We would not expect ANY clarity until after the presidential election.
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.
January 2020 Podcast Video (Dogs Blooper at 2:55), Financial Planning and Capital Market Update – By John Kvale
Hello and Welcome to our January 2020 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 and current events!
January – 2020 Video
Financial Planning Tip (s) –
Handy New Tax Rates and Table
Early in the month, here in this post, we review the new contribution levels, rates and maximums.
As suspected, we have reviewed this ourselves a ton of times already as 2019 and 2020 levels blur during conversations…
Homesteading Reminder
In our article here, we remind all of those who may have changed primary residence last year to check their homesteading provisions as this can be a significant saving, depending on your situation.
Examples
Helping Close Relatives or Others
During the month, we had multiple Financial Planning questions for close relatives and friends, which were asked, but some what hesitantly…
Wanting to reinforce the fact that we are glad to help, in this article we remind everyone we are not only flattered by the question, but VERY happy to help!
Tax Forms and Information Reminders
In another handy reference post, here, we discuss the tax form alphabet and more importantly, note the due dates and expected delivery times of the most common tax forms….
We know, it’s tax season again…not everyone’s fav…but we are trying to help make it easier.
Capital Market Comments
The markets finally took notice of the CoronaVirus. As scary as the virus is, modern day medicine and the actual fast spreading of the event and comprehension, unlike SARS which we remember well will likely help stem the fears and spread of the virus.
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
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Posted in General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Tax Related, Video
Tagged Corona Virus, Homestead, SARS, Tax Rates, Tax Schedules