Do You Have a Financial Blueprint?

Would you start building a house without a plan?

Many investors are missing a clear and defined plan to guide their financial planning and investment decisions.

You deserve a custom blueprint.

Watch our 70-second video and contact the Baron Financial Team to learn more.

Tax-Advantageous Ways to Gift to Charities: Gifting Appreciated Stock

A 30-second read by Nicholas Scheibner:  You may have a stock in your brokerage account that has a very large gain since you originally purchased it.  If you were to go and sell the stock, outside of a retirement account, you would pay taxes on the profit you made on the investment.  This is called a “capital gain”.

In many cases, a stock with a very large capital-gain may be a large portion of your overall portfolio.  This can provide unneeded risk in the event the stock loses significant value.

One strategy to avoid having to pay the capital-gains tax on a stock with appreciated value is to gift the stock to a charity.  You can get a tax deduction for a portion of the gift, and the charity will not have to pay taxes on the stock when they sell it. 

You will need to check with your charity if they are able to accept stock transfers as gifts.  Also, you can look into establishing a “Donor-Advised Fund” which can help you sell appreciated stock in the account and gift the remaining money to a charity, tax-free with a deduction.

Contact Baron Financial Group to discuss tax-saving gifting strategies.

Disclosure: This material is not intended to be relied upon as a forecast, research, tax or investment advice.  Please consult your financial planning and tax professional for personal advice.

Tax-Advantageous Ways to Gift to Charities: Charitable RMD’s

A 30-second read by Nicholas Scheibner:  If you are the owner of an IRA (Individual Retirement Account) you may be aware that at age 70 ½ you are required to withdraw a small portion of your account and pay taxes on the amount withdrawn.  This is called the “Required Minimum Distribution” or “RMD.”  The RMD is determined by the IRS (Internal Revenue Service) and applies to any retirement assets that have been “tax-deferred.”  At 70 ½, the approximate amount you must withdraw from your IRA is about 3.5% of the account value.  As you age, this number goes up based on the RMD calculations from the IRS.

What if you do not need the money from your RMD?  A great option if you do not need the money from your RMD is to write a check directly to a qualified charitable organization.  Writing a check directly from your IRA to a charitable organization will qualify as a “Qualified Charitable Distribution” and satisfy your Required Minimum Distribution for that year.  The main advantage to doing this is to avoid having to pay taxes on your RMD withdrawal.  Any withdrawal from an IRA is normally taxed at your ordinary income rate, except for a “Qualified Charitable Distribution”.

Contact Baron Financial Group to discuss tax-saving gifting strategies.

Disclosure: This material is not intended to be relied upon as a forecast, research, tax or investment advice.  Please consult your financial planning and tax professional for personal advice.

New Investor Blog Series from BFG – IRA Basics

Baron Financial Group’s New Investor Blog Series will consist of monthly blog posts that provide general information on a range of investment topics. The series aims to provide new investors with basic investment information.

*This blog post is the first in the series*

 A 60-second read by the Baron Team:  What is an IRA? An IRA is an Individual Retirement Account. There are two types of IRAs – Traditional and Roth. 

Traditional IRA:

  • Who is eligible? Anyone can invest in an IRA if they are under the age of 70 ½ and are still working
  • How much can you contribute? For 2019, you can contribute up to $6,000 per year based on your earned income (or $7,000 if you are over the age of 50)
  • What are the tax implications? Investment income and growth is tax-deferred until you begin to make withdrawals
  • Are contributions tax-deductible? Yes (In most Cases)
  • Are there withdrawal penalties? Yes, withdrawals made before age 59 ½ are subject to a 10% penalty (There are exceptions)
  • What are the distribution rules? Withdrawal is mandatory starting at age 70 ½

Roth IRA:

  • Who is eligible? Working taxpayers with gross income below $137,00  or $203,000 for married couples for 2019 tax year (Phaseouts apply)
  • How much can you contribute? For 2019, you can contribute up to $6,000 per year based on your earned income (or $7,000 if you are over the age of 50)
  • What are the tax implications? With Roth IRAs you pay taxes upfront, so withdrawals made upon retirement are tax-free
  • Are contributions tax deductible? No
  • Are there withdrawal penalties? None, if a qualified distribution
  • What are the distribution rules? No requirement to make withdrawals by age 70 ½

What are the main differences between the two?

Continue reading “New Investor Blog Series from BFG – IRA Basics”