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As the year begins, probably the last thing on your mind is filing your taxes in spring. But if you start assembling the necessary documents and information now, you’ll experience less stress and be in a far better position come April. Luckily, tax day is a few days later than usual in 2023—since April 15 falls on a weekend, and the following Monday is a holiday, the deadline for filing this year’s taxes is April 18. So even if you don’t get a refund, you’ll at least have a later deadline!

Gather your tax documents and information

Preparation is the key to keeping any tax-filing stressors at bay, so you’ll want to check your inbox and mailbox regularly in the coming weeks. As employers are obligated to issue W-2s by January 31, you may be receiving important tax documents within a few weeks. Also be on the lookout for other important documents you’ll need for filing your taxes, such as 1099 forms reporting any investment income and 5498 forms noting contributions and rollovers to individual retirement accounts. If you expect to be receiving multiple tax documents, consider having a large envelope or basket that you can keep the documents in as they arrive in the mail and creating a system for storing the ones you receive digitally. This way nothing will get misplaced before you file your taxes. You will also need the social security numbers for yourself, your spouse, and any dependents, so make sure you know these or have them noted in a safe place. If you plan to use a preparer for your 2022 taxes, be aware that some will ask you to provide them with the necessary documentation by a certain date so they can meet the April 18 filing deadline.

Document your credits and deductions

Deductions can lower your taxes since they reduce your taxable income, so claim as many as you legally can. Gather documentation for any donations, expenses for medical care, mortgage interest, retirement account contributions, and local and state taxes you paid in 2022. Store these documents with your other tax documents. You will also want to organize your documentation for any tax credits you plan to claim, such as the child tax credit, the child and dependent care tax credit, credits for tuition paid for education, the “savers credit” for contributions to a 401(k) or IRA, and credits for any energy-saving home improvements you made in 2022.

Review your estimated tax payments

If you are a freelancer or own your own business, you may have made quarterly estimated tax payments on your earnings to the IRS during the year, which you will have to note when you file your taxes. To help make the process smoother, make sure you know how much these payments were in advance. You can check by looking back over your bank or credit card statements from this year.

Look ahead

If you really want to be an overachiever, once you’ve gathered all the documentation necessary for filing your 2022 taxes, you can start getting organized for 2023! Put a system together now for saving next

year’s pertinent receipts and information so you’ll have them at the ready when you need to file your taxes in 2024.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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 advisor.

This article was prepared by ReminderMedia.

LPL Tracking #1-05352325

It does not matter how much money you have today; you still must know the details of what you are worth. Understanding your financial situation can help you develop a retirement plan, pay down debt, draft a comprehensive estate plan and live with financial independence.

To figure out your net worth, you should calculate the amount by which your assets (what you own) exceed your liabilities (what you owe). If your assets are greater than your liabilities, you have a positive net worth and vice versa.i

Doing this can provide you with valuable insight into what you can do to continue the plan toward financial confidence, or maybe it is an eye-opener to overspending. This knowledge may allow you to see where you can adjust toward more beneficial financial decision-making.

What are assets?

Assets include real estate, bank accounts, investment instruments, retirement funds, brokerage accounts, and personal items like your car, boat, airplane, jewelry, or other collectibles. Remember to include those intangible assets you might own, like patents, intellectual property, trademarks, etc.ii

What are liabilities?

Liabilities include mortgages, credit card debt, student loans, medical bills, personal loans, settlements against you in court, etc. This may also include money you might owe to someone or an organization.iii

Because we have so many different assets of varying values, assigning accurate values to your assets can become difficult. It is essential not to inflate your net worth, thus making it more challenging to prepare a strategy that you will be able to follow.

One way to determine the value of what you own is by comparing your assets to similar assets in your area that are for sale or that have been recently sold.

Over the years, your net worth will fluctuate. The immediate increases and decreases are less significant than the trend that develops over time. It is the trend that you want to learn how to expose and observe. As you grow older and earn more income from work and investments, build equity in your home, increase your assets and pay down your debt, your net worth can potentially grow, but it requires discipline, budgeting, and planning. It is never too early to get the guidance you need from an experienced financial professional.

The following tips may help you take your first steps toward addressing your financial goals and needs:

• Pay down debt
• Spend carefully
• Sell unused or unwanted assets
• Recover outstanding payments
• Save and invest wisely
• Work with a financial professional to develop a financial strategy.
• Monitor your progress regularly.iv

Part of knowing what you are worth today is being able to build a customized financial strategy that works for your goals at your level of risk. A financial professional can help you make smart decisions by thoroughly understanding your financial situation. Consult a financial professional today.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Financial Marketing Solutions.

LPL Tracking #1-05337832

i What Is Net Worth? – Forbes Advisor ii Assets vs. Liabilities: Examples of Assets and Liabilities – 2022 – MasterClass iii Assets vs Liabilities | Top 9 Differences (with Infographics) (wallstreetmojo.com) iv Get money smart. 25 tips to improve your financial well-being | Consumer Financial Protection Bureau (consumerfinance.gov)

Whether you’re just starting your career or are planning to retire this year, it’s never too soon or too late to start preparing for your retirement. What this entails may be different from person to person, but there are a few essential tips everyone should keep in mind when saving up for their eventual retirement.

Start early

Saving for retirement isn’t something that most of us can do overnight. It takes time to build up the necessary funds, so it’s best to start saving sooner rather than later. While you don’t necessarily have to start saving in your twenties, you should seriously start investing into your retirement funds in your thirties and forties. This will give you time to add to and subsequently grow your 401(k), IRA, Roth IRA, or other high-yield savings accounts. With that being said, it’s also never too late to start saving for retirement. You might just have to be more aggressive with your savings to build up a fund that can prepare you for your next steps into retirement.

Save, save, save

While there’s no one right number for how much you’ll need to save for retirement, it’s generally estimated that retirees need between 70 and 90 percent of their preretirement annual income, which will be a combination of savings and social security. To help you reach this goal, you’ll want to save around 15 percent of your gross annual income every year. There’s always some flexibility to this number, but there’s also no such thing as saving too much. If you work for a business that offers a 401(k) company match, try meeting at least the minimum requirements of that match. This is additional money that you’ll be able to use when it does come time to retire. If you’re company doesn’t offer this benefit or if you’re self-employed, you can always open your own 401(k) or IRA retirement account that you can add to every month.

Know what to expect from retirement

It may not be easy to picture, but it can help in your quest to save for retirement if you have an idea of the kind of lifestyle you’ll want to live when you hit retirement age. Are you going to be moving states, traveling, or taking a part-time job? You’ll also have the expenses associated with the cost of living, such as housing, food, and healthcare, as well as taxes on Social Security and withdrawals from your retirement accounts. All this can impact the amount you’ll spend each month while in retirement, thus impacting the amount you’ll need to save before retiring. Even if you don’t yet know what retirement will look like for you, keep it in the back of your mind so you can adjust your savings and investments the closer you get to retirement age.

Account for inflation

No matter what general suggestions you follow, it’s always a good idea to save more than you think you may need. The cost of living tends to increase by at least 2 percent each year, though that can vary

greatly depending on the state of the economy. By saving more, you’ll help to protect your future self and ensure your financial security so you can enjoy all that comes with retirement.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

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 advisor.

This article was prepared by ReminderMedia.

LPL Tracking #1-05351612

When you own a business, you get to deduct business expenses from your business income. This general rule applies, subject to certain limitations, whether you are a sole proprietor with employees or a self-employed freelancer working in the gig economy. The Internal Revenue Service (IRS) allows you to claim tax deductions for expenses that are necessary and ordinary for your business.

While many of these tax deductions are obvious, others are more obscure. Here are five commonly overlooked tax deductions.

1. Health Insurance Premiums

When you are self-employed, you may claim a tax deduction for health and long-term care insurance premiums. A current or former employer must not pay these insurance premiums. You may write off Medicare Part B premiums as a business expense. You may claim a full health insurance expense deduction for yourself, your spouse and your children’s premiums.1

2. Interest

You may deduct interest as a business expense as long as the expense is for your business. For instance, if you buy a building for your business, the interest on that mortgage is deductible. If you use your personal vehicle half the time as a business vehicle, you may write off half of the interest on your car loan as a business expense, as long as you choose to itemize auto expenses (not take the standard mileage deduction). Similarly, if you charge business purchases on a credit card, you may also deduct the interest you incurred on that card.

This business interest deduction is subject to the IRS section 163(j) limitations of a business having less than $25 million in annual gross receipts and not being a tax shelter. The limitations do not apply to excluded businesses, such as self-employed service providers and certain businesses that request exceptions, such as farms.2

3. Education Expenses

Education expenses are deductible if they directly relate to your business. You cannot get a four-year college degree and write it off as a business expense. However, costs for seminars, workshops, and classes related to your business are generally deductible. If you buy a book or subscribe to a magazine to learn more about your industry that may be deductible too.3

4. Cell Phone Bills

If you are self-employed, once you use your cellphone for business, it may become a deductible business expense.

As a self-employed person, here is how to figure out how much of your cellphone bill is deductible. First, estimate how much of the time you use the phone for personal use versus business use. Then, multiply the business use percentage by your cellphone bill to calculate your deduction. For example, if your cell phone costs $1,200 per year and you use it 25% of the time for work, your deduction might be $300.

If you are an employee, unreimbursed business expenses, such as personal cell phone use for business, are not deductible.4

5. Meals

You may deduct a portion of the cost of certain meals. Suppose you take your accountant out for coffee; that is deductible as long as you talk about business. Or if you have a business partnership and you go out with your business partner for dinner to discuss your marketing plan, your meal’s cost is deductible.

The expenses must be reasonable, not extravagant and may be subject to limitations. If you purchase the meal from a restaurant, it is 100% deductible. If not, the cost is 50% deductible.5

Unfortunately, eating alone is not a deductible expense for the self-employed, even if you work while eating. However, you may deduct a portion of the meal expenses when you travel, subject to limitations. The limitations are 50% of the actual cost or 50% of the IRS standard meal allowance.6

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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 advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking # 1-05345916.

Footnotes

1 The Self-Employed Health Insurance Deduction: A Valuable Personal Deduction https://www.nolo.com/legal-encyclopedia/the-self-employed-health-insurance-deduction-a-valuable-personal-deduction.html

2 Basic questions and answers about the limitation on the deduction for business interest expense https://www.irs.gov/newsroom/basic-questions-and-answers-about-the-limitation-on-the-deduction-for-business-interest-expense

3 Topic No. 513 Work-Related Education Expenses https://www.irs.gov/taxtopics/tc513

4 Can Cellphone Expenses Be Tax Deductible with a Business? https://turbotax.intuit.com/tax-tips/small-business-taxes/can-cellphone-expenses-be-tax-deductible-with-a-business/L6NQvycMO

5 How to Deduct Meals and Entertainment in 2022 https://bench.co/blog/tax-tips/deduct-meals-entertainment/

6 Tax Deductions for Business Travelers https://turbotax.intuit.com/tax-tips/jobs-and-career/tax-deductions-for-business-travelers/

If you hope to retire soon and are concerned about what the future may hold for your investments, you are not alone. Inflation has many retirees and soon-to-be retirees worried about outliving their savings and investments.1

What might you do to survive and even thrive during volatile markets? A financial plan may help you feel more confident and help you consider a few additional ways to manage your financial worries in retirement.

Benefits of a Financial Plan

Having a financial plan—and sticking to it—may help ease your mind during market downturns. There are many reasons for this. A financial plan may:

• Help you focus on long-term patterns instead of short-term disruptions.
• Give you the flexibility to adapt to market changes.
• Guide your asset allocations to be appropriate for your risk tolerance, age, and other factors.
• Prevent you from making any costly actions with your investments.

The temptation to do something—anything—when your investments decline is strong. A financial plan may ground you and help ensure that your actions align with your strategies and goals.

Financially Thriving in Volatile Markets

Along with having a financial plan, here are a couple of strategies you may consider during a down market.

Reduce Your Debt

Paying back expensive debt or anything with a variable or adjustable rate may help you withstand economic uncertainty. Higher interest rates mean a higher cost of borrowing, so the more debt you have, the more it costs you.

By prioritizing debt paydown, you may put yourself in a position of financial flexibility, allowing you to balance your household expenses to match your income or investment gains.

Have Adequate Cash Reserves

Although reducing debt is a worthy goal, it should not happen at the expense of all of your cash. You want to strike a balance between putting away money and lowering your overall debt load.

For retirees, having between 12 and 24 months of living expenses in cash may help you avoid having to withdraw from retirement funds during a market downturn.2 By keeping your funds invested, they may be poised to recover once the downturn ends.

Consider Tax Loss Harvesting

Suppose you are holding some taxable investments that are worth less than you paid for them. In that case, you may be able to take advantage of tax-loss harvesting to offset some capital gains tax liability for other investments. By selling these investments (or “harvesting” your loss), waiting one month, and then repurchasing the same assets, you may generate a paper loss (a loss in value that appears in your accounts, but does not involve a real cash loss) that you could use for your tax liability on the winning investments.

If tax losses exceed annual gains for that tax year, the taxpayer may use the rest of the losses to offset up to $3,000 in ordinary income from federal taxes.3 Tax losses may also be carried forward to continue to offset investment gains in the future.

Footnotes

1 Inflation has many retirees worried about outliving their savings, NPR, https://www.npr.org/2022/02/19/1081875948/inflation-has-many-retirees-worried-about-outliving-their-savings

2 ·Navigating retirement savings during volatile markets, BlackRock https://www.blackrock.com/us/individual/education/retirement-volatility-strategies

3 Can Tax Loss Harvesting Improve Your Investing Returns?, Forbes, https://www.forbes.com/advisor/investing/tax-loss-harvesting/

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Asset allocation does not ensure a profit or protect against a loss.

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 advisor.

Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05335330

Whether you’re hoping to retire soon or are just beginning to explore the idea of stepping back from your job, you’re probably wondering how to make it happen. Will you have enough money? How will you spend your time? What will you do for health insurance? Here, you’ll find a useful countdown of the five biggest steps to developing a solid retirement plan.

5. Assess Your Retirement Goals

What does retirement look like for you? Do you plan to or want to continue working part-time? Will you travel? Do you want to sell your home and hit the road in an RV? At what age will you claim Social Security? When will you qualify for Medicare?

Everyone’s retirement goals are different, which means your financial plan for retirement will also be different.

4. Decide How to Draw Down Savings

Depending on whether your assets are held in a pre-tax account, a post-tax account, or a taxable account, your savings drawdown strategy can vary widely. Your age can also dictate when, how, and how much you withdraw from your retirement accounts. For example, if you plan to retire before age 59.5, you may want to first begin withdrawing funds from a taxable account to provide flexibility until you’re able to take penalty-free withdrawals from a 401(k) or a traditional IRA.

3. Enlist a Financial Professional

If you don’t yet have a dedicated financial professional, now may be the time to assess your retirement readiness and work to optimize your income and assets as you enter retirement. You don’t want to find yourself in a position where your retirement needs exceed your income or assets and you’re forced to scale down—or even go back to work—after you’ve already been enjoying retirement for a few years.

2. Survey Potential Large Expenses

Beginning your retirement with multiple large, unexpected expenses can send even the most carefully planned budgets off track. Before you retire, consider some of the biggest expenses that are likely to come your way.

• Will your home need new windows or a new roof soon?
• Are your major appliances—washer and dryer, dishwasher, refrigerator, HVAC—getting older?
• How much longer do you expect your vehicle to last?
• Is your health plan switching to a high-deductible one?

By planning for large expenses before you retire, you can work to ensure these costs won’t catch you by surprise.

1. Begin Planning Your Estate

Whenever you’re making a big financial shift or embarking on a new phase of your life, it’s important to revisit and assess your estate plan. If you pass away without a valid will or other estate plan, your heirs could find themselves embroiled in a messy, expensive court battle to reclaim and divide your assets.

In some cases, you may only need a will to dispose of your assets in the way you’d like. Other situations may call for an irrevocable trust or some other multifaceted approach to managing your estate. Talking to an attorney and your financial professional can give you a better idea of the options available to you and where each different path may lead.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) and options may be appropriate for you, consult your financial professional prior to investing or withdrawing.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This article was prepared by WriterAccess.

LPL Tracking # 1-05337697.

For many investors, this year has been a wild ride—with interest rate increases, a crypto implosion, and whipsawing values in the major market indices. It might be tough to catch one’s breath and look ahead to next year. But the end of the year is the perfect time to take stock of your investments, evaluating what worked, what didn’t, and what you might do better next year. Here are four key opportunities to consider that may recharge and reset your finances as you enter the new year.

Review and Refresh Your Financial Plan

If you set goals for the past year, evaluate your progress. Did you spend more than expected? Save less than expected? Or did you manage your goals easily—suggesting a bigger challenge may be appropriate for next year?

While setting financial goals for next year, you might also consider the long-term. When do you plan to retire? What do you need to see before getting there—a specific number in your 401(k), a paid-off balance sheet, or something else? Should you stay in your home or downsize? The answers to these questions may help you formulate a more solid plan.

Assess Your Retirement Readiness

Are you on schedule to retire? Are you contributing enough to your 401(k) or IRA?

Though the answers to those questions depend on each person’s circumstances, some patterns are emerging in savings habits among those in their 20s, 30s, 40s, 50s, and beyond. Check these numbers to see whether you are on track.1

Age 20 to 29

Average 401(k) balance of $10,500 while contributing 7% of income

Age 30 to 39

Average 401(k) balance of $38,400 while contributing 8% of income

Age 40 to 49

Average 401(k) balance of $93,400 while contributing 8% of income

Age 50 to 59

Average 401(k) balance of $160,000 while contributing 10% of income

Age 60 to 69

Average 401(k) balance of $182,100 while contributing 11% of income

Age 70 to 79

Average 401(k) balance of $171,400 while contributing 12% of income

These numbers are simply averages—they do not account for income, sector, or cost of living. They also do not include assets in individual retirement accounts (IRAs), taxable accounts, or other savings accounts. But knowing what those in your general age bracket save, on average, might give you a better idea of your progress toward retirement savings.

You should notice that as workers grow older, they tend to contribute a greater percentage of their total income to retirement.

Pay Down High-Interest Debts

With interest rates continuing to rise, credit cards, home equity lines of credit, and other variable-rate loans are likely to grow more expensive.2 If you have any adjustable-rate loans, now is a good time to begin paying them off more aggressively.

Calculate Your Cash Reserves

It is a good idea to have some cash held for emergencies during turbulent times. From an unexpected medical bill to a new appliance, having cash on hand may help avoid the stress of paying for sudden expenses. Assessing your cash reserves at the beginning of the new year may give you a good baseline for setting cash accumulation goals.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking # 1-05337697.

Footnotes:

1 The Average 401(k) Balance by Age, Investopedia, https://www.investopedia.com/articles/personal-finance/010616/whats-average-401k-balance-age.asp

2 What Rising Interest Rates Mean For You, CNN, https://www.cnn.com/2022/09/21/success/what-rising-interest-rates-mean-credit-mortgage/index.html

If you struggle to find a gift for the person who has everything—or want to do your holiday shopping without having to leave the house—consider giving stock as a gift. Doing so is easier than you think, and it may offer a few benefits for you as well. Here is some information on giving stock as gifts and the benefits of doing so.

What Are the Benefits of Gifting Stock?

When it comes to giving stock as gifts, there is one key benefit for both the giver and the recipient.

1. Stepped-Up Cost Basis

If you held a stock until it increased in value, selling it could mean paying capital gains taxes. But giving the stock to someone else means transferring these gains to the recipient, allowing them to take possession of the stock at its appreciated price.1

For example, if you purchased 100 shares of a stock and each share is now trading for more than the purchase price, cashing the stock might mean paying capital gains taxes on the amount the investment increased. If you give this stock to someone else, this person begins with a stepped-up-per-share cost basis. If they later sell the stock once it goes up more, they may only owe taxes on the profits-per-share difference.

2. Transfer of Wealth

Giving stock as gifts may also be a good way to begin passing down wealth to the next generation while minimizing your tax obligation. Cashing out stock and passing along the cash may mean paying capital gains taxes. The proceeds may also be subject to income taxes. This tax may depend on the type of account holding the stock and how long the investment was in the account.

Transferring stock to your children, grandchildren, or other loved ones may help them learn about investing in the stock market while reducing the assets you may eventually want to pass down through the inheritance process.

How To Get Started Gifting Stock

There are a few different ways to give stock as gifts, but the simplest ones involve setting up a brokerage account.

If you plan to give stock as gifts to your children, a custodial brokerage account allows you to transfer shares and buy and sell stock on your child’s behalf. Your child may take control of the account once they are a certain age, usually 18 or 21.

If you want to give stock to an adult with no strings attached, you may transfer them to that person’s existing brokerage account—or open and fund a brokerage account for them yourself. Talk to your financial professional for more information on giving stock as gifts this holiday season.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.

Stock investing includes risks, including fluctuating prices and loss of principal.

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 advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05337702.

Footnote

1 How to Give Stock as a Gift (And Why Tax Pros Like the Idea), Nerdwallet, https://www.nerdwallet.com/article/investing/gifting-stock#

The end of the year can be a chaotic time for business owners. It is a time to compile data, review the numbers, evaluate strengths and weaknesses, and determine growth opportunities for the future. A business owner would be keen to review several factors in preparing year-end documents and preparing for the following year. Here are five tips that may assist with organizing a strategy.

1. Tax Planning –Have necessary steps been taken toward filing required business and individual tax returns, so they get filed on time? The type of business will determine the tax consequence. There are five general types of business taxes and tax changes that can be applied.

• Income Tax

All businesses aside from partnerships file an annual income tax return. Partnerships file an information return.

• Estimated Tax

This tax comes from income generated by interest, dividends, alimony, self-employment income, capital gains, prizes, and awards.

• Self-employment Tax

Owed if earnings were $400 or more or church employee income was $108.28 or more.

• Employment Taxes – These taxes include:
  • Federal income tax withholding
  • Federal unemployment (FUTA) tax
  • Social security and Medicare taxes

• Excise Tax
  • Manufacture or sell certain products
  • Operate certain kinds of businesses
  • Use various kinds of equipment, facilities, or products
  • Receive payment for certain services

*Several forms may be required depending on the type of business.

• Tax Changes
  • The Tax Cuts and Jobs Act of 2017 (TCJA) lowered the corporate income tax rate from 35 percent to 21 percent. If the business is, for example, an LLC and has grown considerable it may be possible to elect to be taxed like a C corporation while the tax rate is low. This act is set to expire January 1, 2026.
  • Some business can take advantage of the qualified business income deduction (QBI) that offers a deduction worth up to 20 percent of their share of the business’s income. However, specified service trades or businesses (SSTBs) may not be eligible for this deduction if their income is too high. Some example of STTBs are Financial Professionals, Law Firms, Accountants, Investment Managers, Medical Practices, and more. i Determining if you can claim it and calculating the deduction amount is complex and it is highly encouraged to seek the assistance of a financial professional.

2. Understanding the value of Life Insurance –

Life insurance is not just about preserving lost wages for surviving family members and evaluating how loved ones may transfer the business to them. Life insurance cash values can potentially become an asset that can be used to, for example, finance a buy-out or borrow against the policy or multiple policies to help cover business expenses. ii

3. Cybersecurity is a way of life now. Are you staying on top of new threats and measures to lower the possibility of attacks?

Breaches within the cyberspace of companies have become a real threat. Hackers are sophisticated and regularly create innovative techniques to break into company databases. What steps are being taken to stay updated with the evolving threats and means of protection against cyberattacks? iii

4. Whether to defer or accelerate income?

Smaller businesses often use the cash method of accounting on their books and tax returns. If the business is expected to be in a lower tax bracket the following year, consider deferring income to the following year. However, if the expectation is that the business will be in a higher tax bracket, consider accelerating income into the current year, for example, sending invoices and attempting to get paid sooner so income will be taxed at the current tax rate.

5. Record of Out-of-Pocket “Business” Expenses

• Mileage log – A record of tracking miles to show to the IRS
• Money spent out of personal accounts
• Cash receipts (Gas, Uber or taxi cab, and other expenditures.) iv

Important Disclosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

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 advisor.

Please keep in mind that insurance companies alone determine insurability and some people may be deemed uninsurable because of health reasons, occupation, and lifestyle choices. Guarantees are based on the claims paying ability of the issuing company.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions

Tracking # 1-05341284

Footnotes: i Tax Cuts and Jobs Act, Provision 11011 Section 199A – Qualified Business Income Deduction FAQs | Internal Revenue Service (irs.gov) ii How Can I Borrow Money From My Life Insurance Policy? (investopedia.com) iii 6 Ways Cybercrime Impacts Business (investopedia.com) iv Reimbursable out-of-Pocket Costs Definition (investopedia.com)

With its family traditions and festive celebrations, the holiday season is the most wonderful time of the year. And according to GivingTuesday.org, the giving in the U.S. alone totaled $2.7 billion to nonprofits and community organizations on #GivingTuesday in 2021, a 6% increase from 2020.

Unfortunately, despite the greatest of intentions,
many will inevitably make mistakes in how they give, especially if they wait until the last minute. So, here is a list of things for you to think about as you consider your year-end charitable donations.

Make a Plan

Ideally, at the beginning of every year – with your financial professional – you would map out a plan to maximize the tax benefits of your giving. Really think through what is important to you and what you want
to support. Is it an organization that supports literacy? Or provides food? Or shelter for families? Creating
a plan will help you be less reactive and feel less boxed in when friends ask for your charitable support.

Research Your Charity

It’s easy to get fooled by a charity’s name so you need to do your homework. And beware of scam artists pretending to represent an organization that doesn’t exist. Read a charity’s financial statements
to see how they spend their (your) money. Even better, volunteer before you write a check.

Donating Stock

If you have owned stock for more than a year and it has appreciated, then don’t sell it first and then give the cash to charity. Those appreciated assets can be donated directly to charity without you or the charity incurring capital gains taxes (consult your tax professional to be sure).

Selling Your Personal Info

Quite a few charities will rent or sell the addresses, phone numbers, email addresses and detailed social media profiles of their donors, which means you might start getting a bunch of unwanted calls, emails and friend requests. Make sure you review a charity’s privacy policy before you give them your information. And many times, you have to actively “Opt Out” to ensure your personal information is not used.

Ask for A Receipt

Remember, for charitable contributions of $250 or more, you need a donor’s acknowledgement letter. And generally it’s a good idea to obtain receipts, especially when donating goods.

Don’t Delay

Shockingly, a whopping 12% of all giving occurs in the last 3 days of the year! But if you mail a check postmarked after December 31^st, then you might run into trouble. Make it easy on yourself and don’t wait until the last minute.

Money Can’t Buy Happiness, But Maybe Donating to Charity Can?

Consider research from Elizabeth Dunn of the University of British Columbia, Lara Aknin at Simon Fraser University and Michael Norton at Harvard Business School. Essentially what they found in their study is the following:

• Spending money on other people has a more positive impact on happiness than spending money on oneself
• Spending more of one’s income on others predicted greater happiness

Discuss with Your Financial Professional

If you have any questions or need help mapping out your Charitable Plan, set an appointment to discuss with your financial professional.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by RSW Publishing.

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