Featured entries from our Journal

Details Are Part of Our Difference

Podcast Episode – Meir Statman

With the Recent Events in Ukraine, Should I Make Changes to My Portfolio?

Embracing the Evidence at Anheuser-Busch – Mid 1980s

529 Best Practices

Author: John Reagan

Three Timely Tax Tips

Around this time of year, taxes are near the top of just about everyone’s to-do list. At Hill Investment Group, we think about taxes every day of the year, working to maximize our clients’ after-tax returns. That means we not only try to maximize the returns in our clients’ portfolios but also limit the amount of money they have to pay in taxes.

Some of you may have already filed your taxes, and good for you. For those that have not already filed, below we share a few tips you can use to hopefully reduce the amount you send to Uncle Sam for 2021.

Contribute to your IRA: Saving in a traditional IRA is one of the simplest ways to reduce taxes. You can contribute up to $7,000 to a traditional IRA (if you are over age 50) and count it as a 2021 contribution to potentially reduce your income.

Contribute to a Health Savings Account: If you are covered under a high-deductible healthcare plan, a family can contribute up to $8,200 (if the owner is over age 55) to a Health Savings Account (HSA) and count it as a 2021 contribution. This is an often-missed opportunity. We were told by one CPA that if you can only contribute to your HSA or 401(k), they would pick the HSA for the tax benefits – quite an endorsement.

Charitable Contributions: Married couples can deduct up to $600 of cash charitable contributions even if they take the standard deduction. So, although you may not have other deductions, be sure to keep track of those cash gifts you made in 2021.

As with all tax planning, we recommend you connect with your accountant or CPA to get more information on your specific situation.

New Video – Charles Kafoglis

 

Ready to meet someone with the heart of a teacher? Charles Kafoglis is our featured video this month and it’s worth a watch. Charles brings decades of client service experience from his days as a management consultant. Most recently, he has been working with teens and young adults to instill financial literacy skills, sorely lacking across all levels of our education system, helping them launch their careers with a sound financial foundation. He appreciates the value of listening, making a difference, and practical problem-solving. We think you’ll love Charles as much as we do!

Always Harvesting

“Typically, harvests happen seasonally. Strawberries ripen in the spring, corn is eye-high by the Fourth of July, those grapes get stomped in the fall, and chestnuts roast on winter fires.

Tax-loss harvesting is different. Those familiar with the strategy mistakenly assume that losses are best harvested at year-end when taxes are top of mind. In reality, tax-loss harvests can happen whenever market conditions and your best interests warrant it.”

From a 2016 post we did on tax-loss harvesting.

Unlike many advisors and do-it-yourself investors, we are on the lookout for tax-loss harvesting opportunities throughout the year. Many people (if they harvest at all) only harvest losses once per year, usually at the last minute in late December. Not us, not you if you’re a Hill Investment Group client. Remember the market decline in March 2020? If your advisor waited until December to harvest your losses, they were likely wiped away. 2020 is a perfect example of why, at HIG, we are opportunistic when it comes to harvest time.

The big question folks have debated is how much all this work is worth? How do we quantify the benefit to you? The Wall Street Journal caught our attention with Derek Horstmeyer’s report claiming the value to be more than 1%. The estimates go even higher if your tax rate is at the top end. If their estimates are somewhere in the ballpark, harvesting looks like a sound strategy year-round with the potential to show you some real money.

You can read about the study here.

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Featured entries from our Journal

Details Are Part of Our Difference

Podcast Episode – Meir Statman

With the Recent Events in Ukraine, Should I Make Changes to My Portfolio?

Embracing the Evidence at Anheuser-Busch – Mid 1980s

529 Best Practices

Hill Investment Group