Tax

By: John P. Napolitano, CFP®, CPA, PFS, MST

The recently passed tax law, known as the Tax Cuts and Jobs Act, has many wondering how to alter their financial plans. According to a poll conducted on behalf of the American Institute of CPAs, over 90 % of people surveyed with income greater than $200,000 believe that tax planning would be somewhat or very important to their financial well-being.

By: John P. Napolitano, CFP®, CPA, PFS, MST

In a famous tax court case from 1934, Judge Learned Hand spouted what is now a famous quote amongst us tax nerds. Justice Hand said that “any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes”.

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

There are two ways to move your IRA money.  One is known as a rollover and the other is known as a direct transfer. To make it simple, a direct transfer is when one IRA custodian sends the funds directly to another IRA custodian. A rollover is when the IRA custodian sends you a check leaving you 60 days to reinvest that amount with another IRA custodian as an IRA account or become subject to taxation.

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

Calculating the rate of inflation seems rather simple. If you pay $10 for something today and one year later that item costs $11, you would think that the item has inflated by $1 or 10% over the past year. But when it comes to the rate of inflation, there is yet another variable to factor into the equation.  That factor is what the Bureau of Labor and Statistics calls a Hedonic Quality Adjustment.  The result is that all price increases may not be factored into the governments published calculation of inflation.

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

It seems as if the past ten years have heightened investors’ jitters to the point where every little rumble in the economy causes some to wonder if the sky will indeed fall and the financial markets drop in value. It is a combination of factors, some firsts in their category, which have heightened the concerns of U. S. investors and helped to increase volatility. 

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

Most people approach their financial planning on a piecemeal basis.  They look at their portfolio every now and then.  They talk to an estate planner every 10 or 20 years, even though it should be more frequent. They buy their life insurance in a vacuum and never look at it again. They buy and sell homes without connecting that transaction to anything but getting a mortgage approval. They deal with the loss of a spouse or job as if it’s just another blip in the screen.

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

The Roth IRA is a powerful financial tool.  Roth IRA’s are a retirement account that allow for the potential growth without taxes, have no required minimum distribution and distributions are tax free if over the age of 59 ½ and the account has been open for a minimum of 5 years.  The downside to a Roth is that taxpayers get no deduction for contributions to Roth IRAs and if you convert a traditional IRA to a Roth, you are taxed immediately on that distribution.

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

Unless you are a CPA who audits public companies, you’ve probably never heard of familiarity risk.  Familiarity risk are risks that you may be incurring that are easily masked by something or someone that you simply become used to. Being too familiar with any situation may cause your guard to become lower than it should be and not allow you to perceive the actual risks that you may be facing.

By: John P. Napolitano, CFP®, CPA, PFS, MST, RLP®

Many people are more concerned about preserving their wealth for the next generation than they are about their own well-being or bucket list.  Hat’s off to you paternalistic savers – your next generation would thank you if they only knew how you really feel.

Many make gifts that they can’t afford and avoid spending on themselves for the benefit of the next generation – but then let it all fall apart upon their death or bad health.