Author: 16783607

Tax Tips – What to Know About Flexible Spending Accounts at the End of the Year

Flexible spending accounts (FSAs) are savings accounts reserved for out-of-pocket health care costs. They are offered through an employee benefit plan and allow you to use pretax dollars to pay for medical costs that insurance might not cover.

FSAs can save you money because they are funded with pretax dollars, but they are “use it or lose it,” meaning that if you don’t use the funds by the end of the year, they don’t roll over into the next. There is some flexibility, and employers may extend the deadline to use funds until March 15, but participants might want to aim for the end-of-year deadline to be safe. That means, come December, you should have a plan of how to maximize your FSA funds.

Not sure how to spend your remaining FSA dollars? FSA Store has thousands of items that are eligible, including first aid items, travel essentials, pain relief items, and much more.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from TurboTax[7]

[7] turbotax.intuit.com/tax-tips/health-care/flexible-spending-accounts-a-once-a-year-tax-break/L8hwzKu7r

Stocks Ride Out a Choppy Week – WEEKLY UPDATE – DECEMBER 9, 2019

The Week on Wall Street
Key Wall Street benchmarks were up and down last week – or rather down and then up. A Tuesday retreat was offset by a Friday rally spurred by the Department of Labor’s November jobs report.
While the S&P 500 managed to rise 0.16% for the week, the Dow Jones Industrial Average declined 0.13%, and the Nasdaq Composite ceded 0.10%. MSCI’s EAFE benchmark for international stocks retreated 0.25%.[1][2]

Hiring Surpasses Expectations
Employers added 266,000 net new jobs last month, 79,000 more than economists surveyed by Dow Jones had projected. The main jobless rate ticked down 0.1% to 3.5%. The U-6 rate, counting both the unemployed and underemployed, also declined 0.1% to 6.9%. Wages grew 3.1% year-over-year, above the 3.0% Dow Jones estimate.

These numbers do not indicate an economy cooling off. While they were influenced by the return of striking General Motors workers to their jobs, November hiring gains were spread across several categories.[3]

Markets Might Wait Well into 2020 for a China Trade Deal
The U.S.-China trade dispute has gone on for 21 months. Wall Street would like to see a new phase-one trade agreement signed this month, but the timeline could lengthen. On Tuesday, President Trump said that he was considering the option of waiting until after the 2020 election to sign off on such a pact.

On December 15, the U.S. is slated to impose a new set of tariffs on around $160 billion of Chinese products. Tech companies are eyeing this date with concern.[4]

Final Thought
Holiday shopping is critical to the economy, accounting for about 20% of annual retail sales. This year’s calendar, however, does not favor retailers. The 2019 holiday shopping season is six days shorter than last year’s, as Thanksgiving fell on November 28. So, expect traders to keep close tabs on the pace of holiday spending, even with consumer confidence indices and stock benchmarks at high levels.[5]

[1] www.wsj.com/market-data
[2] quotes.wsj.com/index/XX/MSCI%20GLOBAL/990300/historical-prices
[3] www.cnbc.com/2019/12/06/us-nonfarm-payrolls-november-2019.html
[4] www.washingtonpost.com/us-policy/2019/12/03/trump-says-trade-deal-with-china-could-wait-until-after-election/
[5] www.jsonline.com/story/money/2019/11/26/black-friday-tv-sales-deals-best-buy-target-walmart-kohls-still-good/4254241002/

Tax Tips – Stay Safe While Shopping Online

It’s the most wonderful time of the year for online shopping! Buy your holiday gifts with ease with these tips on how to protect your data online:

    • Don’t enter your credit card information if you’re connected to an unsecure Wi-Fi network.

    • Only shop at sites that you know and make sure they have an “https://:” URL (the “s” in the URL means that it’s secure).

    • Recognize phishing emails, never click on links you don’t know, and report scams that ask for financial information to the IRS.

    • Keep your computer and security software up to date.

    • Use strong, long, and unique passwords. Use a combination of letters, numbers, and special characters.

    • Use multifactor authentication when available. These sites, like email servers and banking websites, will require a code be sent to your phone number to be able to log in.

    • Encrypt sensitive data on your computer.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[8]

[8] www.irs.gov/newsroom/follow-these-tips-to-protect-data-when-shopping-online

November Concludes With Gains – WEEKLY UPDATE – DECEMBER 2, 2019

The Week on Wall Street
As November wrapped up, U.S. equity benchmarks advanced. Stocks were again aided by a sense of optimism that a preliminary U.S.-China trade deal could be near.

For the week, the Nasdaq Composite added 1.87%; the S&P 500, 1.21%; the Dow Jones Industrial Average, 1.03%. The MSCI EAFE index, which measures the performance of developed stock markets outside North America, gained 0.89%.[1][2]

Markets Wait for News of a Trade Pact
Wednesday, a senior White House official told Politico that the U.S. was “millimeters away” from a phase-one trade agreement with China, a deal that might involve the removal of certain tariffs.

Still, friction remains within the Sino-American relationship. Last week, President Trump signed two bills into law backing pro-democracy demonstrators in Hong Kong. China’s Ministry of Foreign Affairs quickly reacted, stating that American lawmakers had “sinister intentions” and adding that China would take “strong counter-measures” in return.[3][4]

The Latest on Consumer Spending and Consumer Confidence
Personal spending was up 0.3% in October, according to the Department of Commerce. This happened even with no gain in household incomes.

The Conference Board said its Consumer Confidence Index came in at 125.5 for November. Even though it has declined for four straight months, the index remains well above levels seen during the first half of the decade.[5][6]

[1] www.wsj.com/market-data

[2] quotes.wsj.com/index/XX/990300/historical-prices

[3] www.politico.com/news/2019/11/27/us-trade-deal-china-074230

[4] www.cnbc.com/2019/11/29/dow-futures-black-friday-thanksgiving-holiday.html
[5] www.morningstar.com/news/dow-jones/201911276898/us-gdp-growth-revised-up-to-21-rate-in-third-quarter-2nd-update
[6] www.briefing.com/calendars/economic/display-article?ArticleId=ER20191126100000ConsumerConfidence&FileName=conf.htm

Tax Tips – End-of-the-Year Tax Tips

With all the hustle and bustle of the holidays, taxes are likely the last thing on your mind. You have until April, right? Well, there are a few end-of-year tips that you should get ahead on now to save yourself time (and money) come April.

    Donate stock that has appreciated in value – You can donate stock that has appreciated in value that you’ve had for at least a year. This can result in significant income tax savings. Also, donating stock saves you more on taxes than donating cash because there’s no capital gains tax when these stocks are given to a nonprofit. You also save on future capital gains taxes.

    Increase your 401(k) contributions – You’re allowed to contribute up to $19,000 this year if you’re under 50 and $25,000 if you’re 50 and older, and contributing more to your 401(k) by the end of the year means that you will have a lower income tax. This is especially beneficial if you’re between tax brackets.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from Kiplinger[9]

[9] www.kiplinger.com/slideshow/saving/T023-S002-money-moves-to-make-now-to-prepare-for-2020/index.html

Major Indices Move Lower – WEEKLY UPDATE – NOVEMBER 25, 2019

The Week on Wall Street
Stocks declined last week as mixed signals emerged about the progress of U.S.-China trade negotiations.

The three major Wall Street benchmarks all took weekly losses. The Dow Jones Industrial Average declined 0.46%; the S&P 500, 0.33%, the Nasdaq Composite, 0.25%. Also pulling back, the MSCI EAFE index, tracking developed stock markets outside the U.S. and Canada, retreated 0.69%.[1][2]

Nothing Conclusive Regarding Trade
As the market week ended, there was still haziness surrounding the state of U.S.-China trade discussions. Were negotiators on the cusp of a phase-one deal or further away?

Friday, President Trump told reporters that a deal was “very close,” but Chinese President Xi Jinping said that his country could decide to “fight back” against certain terms. Last week, a bill intended to support Hong Kong protesters advanced through Congress, and that development was not taken well in Beijing.[3][4]

The Fed Assesses the Economy
Federal Reserve officials gathered for their October meeting “generally saw the economic outlook as positive” according to minutes from the central bank’s October monetary policy meeting released Wednesday. Some of them termed the economy “resilient.”

The minutes also noted that the Fed would wait to assess the impact of its recent interest rate cuts and that any upcoming policy decisions might be data dependent.[5]

Strength in the Housing Sector
Existing home sales improved 1.9% last month, by the estimation of the National Association of Realtors. Year-over-year, sales were up 4.6% through October, and the median sale price was $270,900, 6.2% above where it was 12 months earlier.

Wednesday, the Census Bureau said that single-family home construction increased for a fifth straight month in October. In addition, the pace of building permits for new homes hit a level unseen since 2007.[6][7]

What’s Ahead
This will be an abbreviated trading week on Wall Street. U.S. stock and bond markets are closed on Thanksgiving Day (Thursday), and then reopen for a half-day session on Friday.

[1] www.wsj.com/market-data

[2] quotes.wsj.com/index/XX/990300/historical-prices

[3] www.cnbc.com/2019/11/22/dow-futures-amid-us-china-trade-uncertainty.html

[4] www.cnbc.com/2019/11/22/hong-kong-rights-bill-unlikely-to-derail-us-china-trade-talks.html

[5] www.marketwatch.com/story/fed-minutes-show-worries-about-economy-had-eased-a-bit-2019-11-20

[6] www.inman.com/2019/11/21/existing-home-sales-pick-up-in-october-after-slump-nar/

[7] www.marketwatch.com/story/permits-for-new-home-construction-hits-post-recession-record-high-in-october-2019-11-19

Tax Tips – It’s Never Too Early to Start Thinking About 2020 Taxes

Even though it’s only November, it’s never too early to start thinking about your
2020 taxes in April. There are a few things you can do to prepare early, including:

    • Doing a paycheck checkup. We’ve recently talked about the importance of making sure your withholding status is correct, and if you haven’t already done so, now’s the time.

    • Gathering your documents. You’ll need your W-2 and Form 1099 from any other payer (and if you’re self-employed).

    • Confirming that your employer and bank have the accurate addresses. You should start to receive tax documentation in January.

    • Setting up an e-Filing profile and signing up for direct deposit for a faster refund.
    Remember, even though the filing deadline is April 15, you can always file your taxes before then as soon as you have all your documentation. The sooner you file, the sooner you will receive your tax refund. How early do you plan for the next year’s filing?

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[7]

[7] www.irs.gov/newsroom/not-too-early-here-are-steps-taxpayers-can-take-now-to-get-ready-to-file-their-taxes-in-2019

A New Dow Milestone – WEEKLY UPDATE – NOVEMBER 18, 2019

The Week on Wall Street
Stock benchmarks were little changed for much of last week, but a rally occurred Friday after news broke that the U.S. and China could be closing in on the first phase of a new trade pact.
At Friday’s close, the Dow Jones Industrial Average crossed the 28,000 level. The Dow rose 1.17% for the week, outgaining the S&P 500 (which advanced 0.89%) and the Nasdaq Composite (which added 0.77%). The MSCI EAFE index, representing developed overseas stock markets, fell 0.77%.[1][2]

Will There Be a Trade Breakthrough?
Friday, Secretary of Commerce Wilbur Ross told the media that “in all likelihood,” a phase-one trade deal between China and the U.S. would presently happen, stating that the talks were “down to the last details.” Thursday evening, White House economic adviser Larry Kudlow expressed similar optimism, noting that negotiations were “coming down to the short strokes.”

That said, the Wall Street Journal reported last week that President Trump is not yet committed to signing a phase-one trade deal. Secretary Ross noted that such an agreement would be “relatively limited in scope.”[3][4]

Consumers Boost Their Buying
Retail sales advanced 0.3% in October, according to the Department of Commerce. That surpassed the 0.2% gain forecast by economists polled by MarketWatch. Even so, households bought fewer big-ticket items than they did in September.[5]

[1] www.wsj.com/market-data
[2] quotes.wsj.com/index/XX/990300/historical-prices
[3] www.bloomberg.com/news/articles/2019-11-15/kudlow-says-phase-one-china-deal-down-to-the-short-strokes-k2zgbx0k
[4] www.foxbusiness.com/politics/u-s-china-trade-deal-near-but-trump-not-signing-yet
[5] www.marketwatch.com/story/us-retail-sales-rebound-in-october-but-a-small-group-of-stores-reap-most-of-the-gains-2019-11-15

Tax Tips- You’re Not Alone: The Many IRS Resources Available

The thought of filing taxes might be overwhelming to some, but the IRS has many resources available to help make it easier. These include their Frequently Asked Questions page, some basic tools about PTIN requirements, contact information, disaster relief resources, and more. In addition, they also make it easy to access some of their most-popular publications, including:

If you have questions before, during, or after filing your tax return, the IRS is happy to help. You can also reach out to enrolled agents and find out more information about what EAs are and how you can become one.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[7]

[7] www.irs.gov/newsroom/irsgov-has-many-resources-for-tax-preparers

Dow, S&P 500 Extend Win Streaks- WEEKLY UPDATE – NOVEMBER 11, 2019

The Week on Wall Street
Domestic and international stocks rose last week. Risk appetite outweighed concerns about the state of U.S.-China trade discussions.

The Dow Jones Industrial Average, Nasdaq Composite, S&P 500, and MSCI EAFE all ended the week with gains. Blue chips led the way, as the Dow added 1.22%. The Nasdaq improved 1.06%; the S&P, 0.85%. The EAFE, tracking developed stock markets away from North America, was up 0.76%. The Dow recorded its third straight weekly gain; the S&P, its fifth. [1][2][3]

Will Tariffs Phase Out or Remain?
Thursday, a spokesman for China’s commerce ministry said that U.S. and Chinese trade representatives had “agreed to remove” existing tariffs in “phases,” while working toward a new trade deal.

On Friday morning, President Trump told the media that he had not agreed to any such condition. President Trump and Chinese President Xi Jinping are still expected to sign off on “phase one” of a new bilateral trade agreement.[4]

Service Sector Activity Picks Up
A closely watched index of U.S. business activity posted an October gain. The Institute for Supply Management’s Purchasing Managers Index for non-manufacturing firms rose nearly two points last month to 54.7. ISM also noted an October increase for new orders.

As most U.S. companies provide services rather than manufacture products, this news is encouraging and suggests more momentum in that sector.[5]

Final Thought
Monday is Veterans Day; the stock market will be open, but the bond market, plus all federal government offices, will be closed.

[1] www.wsj.com/market-data
[2] quotes.wsj.com/index/XX/990300/historical-prices
[3] www.marketwatch.com/story/stock-futures-bounce-around-as-wall-street-weighs-china-us-tariff-rollback-talk-2019-11-08
[4] www.cnbc.com/2019/11/08/trump-says-he-has-not-agreed-to-roll-back-tariffs-on-china-after-week-of-trade-optimism.html
[5] www.briefing.com/Investor/Calendars/Economic/Releases/napmserv.htm