Quizmaster Doug Hutchinson presents his monthly wealth management test. This month he quizzes your knowledge on whether it’s better to pay for college expenses from a taxable joint account or an IRA. Consider this Scenario: Your friends Rick and Andrea have a granddaughter, Alexis, who is getting close to college age. Rick and Andrea would like to help out with college expenses and they are considering two options to fund a tax deferred investment account for Alexis' college expenses. [+] Read More

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug explores donating appreciated stock versus selling the stock and donating the cash. [+] Read More

Quizmaster, Doug Hutchinson, presents his quiz for the month. Here, Doug explores how to manage capital gains tax on mutual funds. Consider this Scenario: Your friend Joe is preparing his tax returns and is confused as to why he owes taxes on a mutual fund position that he hasn’t sold and went down in value from the purchase price. "I bought $100,000 worth of a mutual fund on October 1st at $10.00 per share in a taxable brokerage account. On December 1st I received a capital gains distribution from the mutual fund. At the end of the year the mutual fund was worth $9.90 per share." "I didn't sell any shares of the mutual fund after I bought them and the price per share has gone down in value since I bought the mutual fund. Why would I owe taxes in this scenario?" What is a potential reason why Joe would owe taxes in this scenario? [+] Read More

Editor's Note: This article was originally published in March 2015 and has been updated to include new tips for tax filing year 2016. “In this world nothing can be said to be certain, except death and taxes.” It’s February, which means tax time is just around the corner, and you’ve probably seen lots of articles quoting Benjamin Franklin’s historic quip, but taxes don’t have to be as bad as all that. Whether you’ve already started your taxes, outsourced the entire process to a tax professional, or are waiting until the last minute, small things make a big difference when it comes time to do your filing. These seven strategic tax tips have been selected to help you get the most possible out of your tax filing. So, instead of dreading doing your taxes, maybe this is the year where some extra research could help you save a bit more. Or perhaps you’ll set a goal to finish your taxes earlier than you’ve ever finished them before. So, grab the tax bulls by the horns! And use these seven strategic tips to potentially make your life easier. [+] Read More

With the end of the year fast approaching and holiday season just a few weeks away, time is running out for investors to “make moves” that could benefit the filing of 2016 taxes next April. Here are three tips to consider as we head into the end of the year. All of these provide a win-win for investors of reducing your taxable income and providing a meaningful benefit to your household: [+] Read More

For readers unfamiliar with the generation skipping transfer tax (GSTT), in its simplest form it is what it sounds like – a transfer tax that is triggered when an individual (transferor) bequeaths all or a portion of an estate to a person (skip person) that is two or more generations below them, with an age difference of 37 ½ years or more. The simplest and perhaps most common example would be a grandparent leaving assets to a grandchild.1 [+] Read More

Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding how tax aversion can sometimes lead investors to make sub-optimal investment decisions. Good luck! Consider this scenario: Your friend Jeff owns a mutual fund worth $100,000 in his taxable account. Jeff has been considering selling the mutual fund and replacing it with a similar investment with lower fees (and, therefore better projected net of fees returns). However, Jeff is leaning toward not selling his mutual fund because his cost basis on the mutual fund is $75,000, so selling it would create a taxable gain of $25,000. [+] Read More

A new year is a fresh slate in many ways, including the way you manage your taxes. There are numerous tax deductions and tax credits available to taxpayers who know about them and use them. The problem is that many taxpayers either don’t pay attention to them or don’t prepare to use them. Most of these deductions and credits require that you track expenses and keep receipts. These are easy things to do if you create a strategy and system for tracking expenses. Make a goal in 2016 to take advantage of tax deductions and tax credits. You may be able to lower your overall taxes by doing so. The following tax deductions and tax credits are often overlooked. See if you qualify for any of them. By making a plan now for the coming year, you may be able to take advantage of more tax deductions and credits. Long Term Care Insurance Premiums You may be able to deduct premiums paid for qualified Long Term Care (LTC) insurance policies from you 2016 taxes. Some LTC policies qualify as “medical expenses” according to the IRS itemization definition. Talk with your tax adviser about the possibility of deducting these expenses; in many cases you can deduct them to the extent that your total medical expenses exceed 10% of your adjusted gross income. [+] Read More

Charitable giving reached an all-time high in 2014,1 with Americans giving $358.38 billion to charities, according to National Philanthropic Trust.2 Giving feels good, but the benefits of giving don’t end there. You can also reduce your taxable income through charitable giving by making sure you follow the tax guidelines for charitable donations. If you haven’t yet done so, you can join the millions of Americans who donate to charity and receive a reward for themselves: a lower overall tax bill. In order to make a difference in your taxes, follow these 7 guidelines: Choose Qualified Charities. Not all charities qualify for tax deductions. If you’re unsure about a charity’s status, ask to see their letter from the IRS or search online at the IRS Exempt Organization Select Check website. If you’re donating to a church, mosque, synagogue, or temple, keep in mind that religious charities are considered de facto charitable organizations, even if they’re not on the IRS list. [+] Read More