Posts Tagged "investments"

Study reveals retirement concerns

Posted on Apr 23, 2014

A recent study conducted by Harris Interactive of 1,000 middle class individuals aged 25 to 75 revealed some interesting statistics about retirement attitudes. Among the survey’s findings: * 37% of respondents say they don’t expect to retire; instead they expect to work until they are too sick or die. * 59% said retirement is not their top priority; their priority is paying day-to-day bills. * 34% felt they would have to continue working until age 80 or beyond because they won’t have saved enough to retire. * 31% in the 40 to 59 age category say they have a retirement plan; 69% say they have no plan. * Those who say they have a written plan say they have saved a median of $63,000 for retirement, which represents 32% of their retirement savings goal of $200,000. Those without a written plan say they have saved $20,000 or 10% of their goal. * A third of those surveyed said that social security would be their primary source of income in retirement. * 40% said a large unexpected health care expense was their greatest retirement fear; 37% said lower or no social security benefits was their biggest fear. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ <https://plus.google.com/108764776146415485651/posts> , LinkedIn <http://www.linkedin.com/in/gillilandcpa> , Facebook <https://www.facebook.com/gillilandcpa> , and Twitter...

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Eggs, baskets, and investments

Posted on Sep 5, 2013

A well-diversified portfolio spreads out your investment risk. However, you can easily end up with more eggs in one basket than you intended. Here are some investment tips. Look at the big picture. The assets inside and outside your retirement plans should be considered together when you are designing an investment strategy and balancing your portfolio. Selecting the same investments for your personal accounts and your retirement accounts may decrease your diversification and increase your risk. Make sure your mutual funds are diversified. One of the main benefits of owning a mutual fund is diversification. However, your mutual fund might not be as diversified as you think. Consider these areas: * Watch out for top-heavy funds. For example, your fund’s manager favors a few stocks and invests a big chunk of the fund’s assets in those stocks. You shouldn’t necessarily steer clear of concentrated mutual funds, but owning a single concentrated fund may expose you to more investment risk than you bargained for. * Watch out for overlap. It’s possible to own different funds that own the same stocks or that own similar stocks in the same industries. For example, you might own a technology fund that invests 10% of its assets in Microsoft. You might also own a growth fund that invests 10% of its assets in Microsoft. * Watch the turnover. Although funds generally list their largest holdings in their prospectus and their annual report, that information represents a snapshot in time. If you own a fund that engages in active trading (a high turnover ratio), its holdings can change considerably from one day to the next. You should review your fund’s holdings from time to time to ensure you still have the diversity you desire. Many mutual funds periodically update their holdings on their websites. If you have questions about your investments and how they fit into your overall financial picture, give us a...

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Savings bonds are tax-smart for college savings

Posted on Sep 3, 2013

Amid the evolving assortment of education tax breaks is a benefit that has survived with few changes over the years: the education savings bond program. When you qualify for this federal income tax exclusion, the interest you receive from bonds redeemed to pay for certain college expenses may be tax-free. Are bonds you bought years ago eligible? It depends on when you bought them and how they’re titled. Eligible bonds include Series EE or Series I savings bonds you purchased after 1989, as long as you were at least 24 years old when they were issued. The age restriction rules out bonds you put in the names of your kids or grandkids, though the children can be named as beneficiaries. Once you’re sure your bonds qualify for the exclusion, the next step is to find out if you meet the income limitation. In 2013, you can exclude all the interest income you receive from eligible savings bonds when you file a joint return and your modified adjusted gross income is less than $112,050 ($74,700 for singles). A partial exclusion is available until your income reaches $142,050 ($89,700 for singles), at which point the exclusion is no longer available. Finally, the bonds must be redeemed in the same year you pay qualifying educational expenses for yourself, your spouse, or your dependent child. What expenses qualify? The definition includes tuition and fees that you pay out-of-pocket and for which you claim no other deduction or credit. You can also claim the exclusion when you use the bond proceeds to fund a 529 college savings plan or a Coverdell education savings account. Savings bonds offer additional, less restrictive opportunities for education and tax planning. For instance, it may make sense to put the bonds in your child’s name and report the interest on an annual basis. Depending on your child’s income, the interest could remain tax-free. Alternatively, you may choose to defer recognizing interest on bonds issued in your child’s name until the bonds are redeemed. Please call us to discuss these strategies and others that can help ease the burden of college...

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Identify types of income to end up with lower 2013 taxes

Posted on Jul 25, 2013

Act now to identify ways to minimize your 2013 taxes. Start by estimating your 2013 income, sorting it into categories such as wages, investments, passive income, retirement plan distributions, and active business income. Different tax rules apply to different kinds of income, and rules differ at various income thresholds. If you act now rather than later in the year, you’ll have time to identify and put tax-saving options to work for you.   Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ , LinkedIn , Facebook, and Twitter....

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Make the most of your professional advisors

Posted on Jul 4, 2013

Who’s on your team? No, not your sports or reality-show dancing team, your business team, that group of professional advisors who are ready and willing to help you tackle tough financial decisions. Those decisions can have an effect on your taxes this year as well as in the future, so you want to be sure your advisors know each other – and are working together for your benefit. As you begin your midyear planning review, here are three areas where coordinating the advice you receive can pay off. * Investments. Capital gains and losses from sales of your securities affect your taxes, of course, but the kind of investments you make can also have an impact. For instance, buying municipal bonds to generate tax-free interest may result in the unintended outcome of creating income subject to the alternative minimum tax. * Insurance. The type of health insurance plan you select can have tax implications. An example: A Health Savings Account (HSA), used in conjunction with a high-deductible health plan, can save premium and tax dollars. You fund an HSA with pre-tax cash and take tax-free withdrawals to pay medical expenses. * Estate planning. Wills, trusts, and beneficiary designations provide the framework for carrying out your wishes after your death. Communication between your tax and legal advisors helps ensure that these documents offer the greatest protection for your heirs while minimizing estate tax consequences. Please call us to schedule a comprehensive review of your goals. We’re delighted to be part of your professional...

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