Jan 29, 2014 1A dynamic and insightful speaker, Jeff Bush is known for his unique ability to decode difficult and confusing tax and fiscal information coming out of Washington. Jeff is a colleague of Andy Friedman and an integral part of The Washington Update, the industry thought leader that guides domestic clients through the complex and ever-changing political […]
Comments Off on A Laid-Back Summer in Washington? What to Watch ForSummer is a time to kick back and put the year’s bustle on hold. But summer inactivity doesn’t bode well in Washington when there are deadlines to meet and matters to address. As the summer commences, two percolating issues should hold investors’ attention. This white paper discusses those issues and their likely market effects.
Comments Off on Tax Reform Aftermath: Pass-through Business Tax UpdateOur last tax update, Tax Reform Aftermath: New Guidance for Investors, discussed in part the steps small business owners might take to claim and maximize the 20% deduction afforded by the Tax Cuts and Jobs Act. Since we wrote that paper, the IRS has clarified the application of the provisions that govern these strategies. This white paper explains how owners of businesses organized as pass-through entities should take the new guidance into account in their tax planning.
Comments Off on Scaling Back the Affordable Care ActSince the election of President Trump and the Republican-controlled Congress in 2016, the legislature, the courts, and the administration have taken actions and issued guidance in an effort to curtail the scope of the Affordable Care Act (“ACA”). The actions and guidance have been sporadic, making it difficult to determine their interrelation and import. This white paper describes and explains the confusing array of incentives and payments that the ACA contemplates. It goes on to discuss the effect and interaction of government efforts to reduce these payments and to scale back the scope of the law.
Comments Off on Congress Returns as the Election LoomsCongress returns for its fall session with a number of items on its plate. First up is the usual fall wrangle, funding the government to avoid a shutdown. But other items are new and could have far-reaching effects for investors, including a bipartisan threat to “stretch IRAs”. This white paper considers the risk of a government shutdown, and goes on to review and provide a prognosis for the other items Congress is likely to consider this fall, including “Tax Reform 2.0”.
Comments Off on Tax Reform Accomplished: How Does the Legislation Affect Investors and Businesses?
As 2017 drew to a close, Congress passed the Tax Cuts and Jobs Act, tax reform legislation that made sweeping changes to the Internal Revenue Code. When Congress last reformed the tax code in 1986, the legislative process took over two years. This time Congress accomplished the same feat in two months. This white paper discusses the portions of the Tax Cuts and Jobs Act that are of particular importance to business owners, investors, and financial advisors. We point out situations that are likely to fare better and those likely to fare worse under the legislation. At the end, we present a chart of “winners and losers” that takes into account these individual situations. The chart also shows business and economic sectors particularly likely to be affected by these tax changes, thereby potentially altering their equity valuations.
Comments Off on The Markets Prepare for Crunch Time in WashingtonAs summer ends – eight months through their first year in power – the Republicans are working to pass their first piece of major legislation. With the markets watching, crunch time is coming to Washington. Businesses and the markets are awaiting Congressional movement on tax reform, which they view as the most important legislative effort this year. But before it can turn to taxes, Congress must address two September deadlines: funding the federal government and raising the nation’s borrowing limit. Developments in those matters will prompt the markets to recalibrate the likelihood of tax reform, with consequent effects on equity values. This paper discusses the actions Congress is likely to take in response to the impending deadlines, and whether and in what form Congress will enact tax relief legislation this year.
Comments Off on Congress Returns with a Full Agenda: What to Watch For in the MarketsCongress returns to Washington in June with a long to-do list that includes funding the government, raising the country’s borrowing ceiling, reforming Obamacare, and reducing taxes. The actions Congress takes (or fails to take) could affect the markets through the summer and fall. This white paper considers what Congress is likely to accomplish and how the markets are likely to react.
Comments Off on A New Administration in Washington: What Tax Changes are in Store This Year?For the first time in thirty years, enactment of comprehensive tax reform legislation is a realistic possibility. President Trump has made tax reform a central goal of his new administration, designating simplification and lower tax rates as key drivers of economic growth. In this effort Trump enjoys the vigorous support of the Republican leadership in Congress. This white paper discusses the proposals for tax reform, the barriers that must be overcome to permit its enactment, and the likely tax changes investors will encounter when all is said and done in 2017.
Comments Off on Investing in a Rising Tax Environment – 2016Tax rates imposed on upper income taxpayers are now the highest they have been in almost four decades. And taxes are likely only to increase as Congress looks for ways to defray increased government spending on entitlements due an aging population, subsidies under the Affordable Care Act, increased overseas military operations, and new social programs to help the middle class. This update of our most popular white paper discusses recent and likely future tax changes, and what investors can do now to minimize the taxes imposed on their investment income.
Comments Off on Preparing for Rising Medical Costs in RetirementThe Affordable Care Act is affecting retiree medical costs in a number of ways, most of them adverse. This white paper – updated for 2016 -- discusses how the ACA is likely to affect the cost and coverage of insurance in coming years, and how retirees and near retirees can develop a cost estimate and a plan to help defray those expenses.
Comments Off on Combining Trusts and Life Insurance to Avoid TaxTo minimize estate taxes, investors often transfer assets to an irrevocable trust. Assets transferred grow outside of the donor’s taxable estate, and thus pass to heirs entirely free of estate tax. But investment earnings in an irrevocable trust are subject to income tax at the highest tax rate. And that maximum tax rate has risen substantially in recent years. This white paper discusses how investors may reduce income taxes imposed on an irrevocable trust while still using the trust to reduce estate and gift taxes due.
Comments Off on Boehner Quits, and The Can Gets KickedFor almost all of 2015, we’ve been predicting that September would be a tumultuous month in Washington. The month certainly did not disappoint, as the political cross currents roiling the city resulted in Speaker Boehner's sudden resignation. This update discusses the likely fallout from the resignation and what it means for Congress' ability to respond to fiscal deadlines upcoming this fall – with concomitant effects on the markets.
Comments Off on A Republican Congress Awaits – But First the Lame Duck SessionDestiny became reality in the midterm elections as the Republicans gained a majority of the Senate and widened their lead in the House to historic proportions. The Republicans now must decide the mix of confrontation and collaboration that will define their leadership. Due to variations in beliefs and campaigning strategies, the rank-and-file members of the two chambers might see this ideal mix differently. This update discusses the dynamics surrounding the election and enumerates the items Congress must address in the lame duck session taking place in December.
Comments Off on Four Reasons to Consider a Trust to Protect Your AssetsFor many years, trusts have been the province of the wealthy, mysterious vehicles used to escape taxes and preserve assets for future generations. More recently, however, families with more modest assets are using trusts to help them protect assets from creditors, manage and grow assets for future generations, and ensure that their assets ultimately are distributed in accordance with their wishes to their heirs. This white paper considers situations in which a trust can help control, protect, and preserve assets and address philanthropic goals.
Comments Off on The Midterm Elections (And a Peek Toward 2016)With fiscal deadlines out of the way for 2014, attention is now turning toward the 2014 midterm elections. This white paper covers a variety of Washington political matters: the reason for rampant partisanship in Washington and what it means going forward, what is likely to happen in the midterm elections, and a glimpse toward the presidential election of 2016.
Comments Off on Congress Raises the Debt Limit: Is This the End of the Budget Battles?Congress has passed legislation permitting the federal government to continue to borrow funds through March 15, 2015. Coupled with the agreement reached last December to fund the government through September 30, 2015, this action eliminates the prospects of additional fiscal showdowns for at least the remainder of 2014. But these battles are likely to return next year.
Comments Off on Important Dates to Watch in 2014Looking forward into 2014, four dates – February 7, March 31, April 15, and November 4 – stand out as pivot points for events that could affect the markets, particular industries, and tax and financial planning. This white paper discusses why these dates are important and how investors can prepare now for changes that are likely to occur.
Comments Off on A Budget Compromise is Reached, But Unresolved Issues RemainCongressional negotiators have reached a modest agreement to fund the federal government for the next two years. The agreement does not, however, raise the nation’s borrowing limit, leaving an important issue unresolved for 2014. This paper describes the compromise and the fiscal issues remaining for Congressional action in 2014.
Comments Off on Health Care Reform Takes Effect: What Choices Do Businesses and Individuals Have?The Administration has announced that it will not penalize businesses for failing to provide health insurance to employees before January 2015. This action represents a significant deferral of the one of the key requirements of health care reform (“Obamacare”). But the remaining parts of the law – including the requirement that uncovered individuals purchase health insurance – remain scheduled to begin in January 2014. This white paper explains, in an easy-to-read four pages, the parts of the health care reform law that affect businesses and individuals, and what individuals and businesses must do – and the decisions they must make -- before the law takes effect in January 2014. The paper also explains the purported goals of the health care reform law and the extent to which the law is likely to achieve those goals. Members may read the white paper here.
Comments Off on The Upcoming Debt Limit Debate: What Tax and Entitlement Changes are in Store?The United States government has once again hit its borrowing limit. The government was permitted to borrow only through May 18, after which it can continue to operate without additional borrowing for about four months. Sometime this fall, Congress will have to raise the debt limit to prevent the United States defaulting on outstanding debt. The Republicans are demanding changes to entitlement programs – Social Security and Medicare – as a quid pro quo for their approval to raise the borrowing limit. President Obama has provisionally accepted these changes, if the Republicans agree to new taxes. The President has proposed a number of tax changes he wants to see enacted. This white paper discusses the proposed entitlement changes, provides a detailed analysis of the proposed tax changes, and predicts the likelihood of the eventual Congressional passage of each.
Comments Off on The Sequester Cuts Take Effect: Now What Happens?Congress has permitted the government spending cuts, known as the sequester, to begin on March 1. But Congress faces other deadlines that could affect the implementation of those cuts. This paper discusses the background of the sequester cuts, their implementation, and how Congress is likely to handle the other approaching deadlines.
Comments Off on Behind the Fiscal Cliff CompromiseThis paper summarizes the elements of the fiscal cliff compromise reached on New Year’s Eve, and discusses how the compromise affects future income tax rates and wealth transfer.
Comments Off on Still Poised on a Cliff: Wealth Transfer Opportunities after the Fiscal Cliff CompromiseAt the eleventh hour on New Year’s Eve, Washington negotiators reached a compromise to avoid the “fiscal cliff” – the looming combination of tax increases and spending cuts that threatened to throw the country back into recession. The fiscal cliff compromise included a number of favorable estate and gift tax provisions. However, the compromise also left Congress with a short-term need to address other deadlines and a lingering desire to enact comprehensive tax reform. Addressing those matters is likely to lead to further wealth transfer tax changes, some of which might restrict current gifting techniques. This white paper discusses the elements of the compromise, estate and gift tax changes that might be upcoming, and how individuals can begin to plan in light of these developments.
Comments Off on Investing in a Rising Tax Environment: The Roth Conversion OpportunityTax rates are likely to rise at year end as Washington considers whether to permit some or all of the Bush tax cuts to expire. On the other hand, tax reform efforts in 2013 could reduce rates. Fluctuating tax rates provide an interesting arbitrage opportunity for Roth IRA conversions in 2012. Investors who expect to remain in the same tax bracket in retirement might wish to convert their IRA to a Roth IRA this year, so that they can receive future earnings tax-free. If tax rates then fall next year, they can act before October 2013 to re-convert back to the traditional IRA. This white paper discusses the rules governing Roth IRA conversions (and re-conversions) and identifies the types of investors who might be well-advised to pursue this strategy.
Comments Off on Preparing for a Secure Retirement: The 401(k) Plan RolloverRecent years have seen a decline in retirement asset values, the elimination of many corporate pension plans, and threats to the long-term viability of the Social Security system. Now more than ever it is important that retirement assets be invested wisely in vehicles that can produce a reliable income stream, have the potential for appreciation, and can lower downside risk. Unfortunately, 401(k) plans may not offer the sort of sophisticated investment choices that can best achieve these results. This white paper discusses how investors may take control of their retirements by moving their 401(k) assets to IRAs that provide a broader array of investment choices, and in what circumstances they are well-advised to do so.
Comments Off on A Unique Opportunity to Transfer Wealth Without Tax: Combining Trusts, Life Insurance, and AnnuitiesInvestors have an unprecedented opportunity to transfer wealth to future generations free of gift and estate taxes, provided they act before the end of 2012. By using a trust and taking advantage of unusual investment opportunities, the gifted assets can grow free of income taxes as well as estate taxes, providing an even greater legacy for heirs in future years. This white paper explains how investors can take advantage of this new opportunity.
Comments Off on Investment Opportunities and The High Federal Budget DeficitThe federal budget deficit is projected to reach a new high in 2011, exceeding even the record deficits of recent years. The high deficit may portend ominous consequences for the economy and the government’s ability to continue to function in its present state. But it also provides opportunities for investors. This white paper describes the extent to which Washington is likely to address the federal budget deficit and how investors can profit from -- or at least blunt the negative effects of -- the current fiscal situation.
One important issue within trade negotiations with China has been our desire to open up the Chinese economy to additional foreign business ownership. There seems to be some movement in this area as it relates to the financial sector. bloomberg.com/news/a…
State pension plans are a significant part of every state's budget. How well funded is your state's plan? It's amazing the disparity between the states! Keep in mind, states only have one revenue source, taxation of their citizens. ow.ly/EdPA50v623I
Some prominent Dems suggest they will do away w/filibuster min for legislation should they take control of the Senate after the 2020 election. Very bad idea for either party. ow.ly/r1OU50v4ZyP Blue states sue over $10k SALT cap. Not likely to win. ow.ly/iZm750v4ZyT