Tax Season
Hope everyone is off to a great 2024, hard to believe January is behind us! As we enter tax season, I thought I’d share some important dates: 1/31—when retirement 1099’s will be available; 2/15—first round of 1099 distributions; 3/1—second round of 1099 distributions and 3/15—final round of 1099 distributions. The timing is almost always depending on Raymond James receiving tax information from fund companies, but usually it will be similar to the timing of when you received it from last year. If you had holdings that issued a K1, you should be able to access those in most cases by 3/15. Another reminder, 529 contributions, IRA contributions and SEP contributions can be made for 2023 up until 4/15. If you would like to process contributions for yourself or your kids, please let us know if you haven’t already.
'24 Big Planning Year
2024 is one of 2 remaining years before it’s likely the TCJA tax cuts expire, so it will be an important planning year for both income and estate tax ideas. Being nimble and smart will be the goal. There were also many changes implemented from the Secure Act 2.0 passed late 2022 and the IRS has been issuing guidance in the last few months. Many of these changes are already in effect, such as the increased starting age for required minimum distributions now at 73. Lots of goodies in this act for both businesses and individuals. To that end, it is more likely than not that the ‘Tax Relief for American Families and Workers Act of 2024 (TRAFWA???)’ passes, especially if they find a better anachronym. 😊 These will have an impact on child tax credits and some business deductions, especially for research and development. I have also attached an easy reference guide to 2024 tax numbers.
Fed Decision and Markets
Fed day was this week, resulting in a quick drop followed by a fast recovery. While the market believes the Fed will cut rates up to 6 times this year, I actually believe what he’s been saying during these recent Fed decisions: he is not likely to cut that much or that fast. We remain bullish on equities and bearish on long term bonds, though our alternatives to long bonds will still do ok if rates drop. Many have been asking me about the impact of the upcoming election on markets. Raymond James actually had a great piece on the topic putting it in historical perspective (Investment Strategy Quarterly—pages 9-13), worth the read. You won’t be surprised they and I are in agreement: markets respond far more to economic events than geo-political events.
Matt Decides to Rant About Election
I have been thinking much about this election year the past few weeks as it is one infused with a tremendous amount of anxiety and emotion. And yes, financially, it should be fine. In fact, were it not for all the geopolitical issues, right now is the most exciting time to ever be alive with all the new technological innovations that can improve… everything. Just ask me what I’m seeing, delighted to share and yes we consider them in our portfolios. But there is a massive wall of money, a tsunami unlike ever before, that is using every media means at their disposal to tell us that our presidential choice is the difference between good & evil/light and darkness/democracy and oppression/(insert your meme here). That, imho, is not the most important decision we can make. At all. The most important decisions we can make are: can we still respect someone with a different opinion; can we love and help our fellow man out of a sense of shared humanity; and is being a community with each other a more important than a tribe based out of the politics of DC? I hearken back to 2022 when rhetoric was similar… yet, voting lines were cordial and many of the fears of bad things happening went unrealized. Remember the song, “Hey You--Pink Floyd”? I was walking the dog the other day, and was thinking of all the ways they’re planting ‘worms into our brain’. They take up precious space. They are not there to help us, they’re there to help “them”. They take up space we can use to love our families, spend time with our friends, be productive at work. And yes, I’ve been guilty of giving up that space in my brain on occasion. I want them out. Two days later, I listened to our pastor’s sermon talking about preparing our minds “for battle against the enemy”. The enemy, as he described, was ANTs: Automatic Negative Thoughts. Pretty close to worms! Let me try: Worries Occupying Remaining Mind. OK not great. But not an opposing political party. Thoughts that spin up our worrying brain and keep us away from what’s important in our lives. Thoughts making us overestimate what can go wrong. The solutions? Acts of kindness; acts of prayer/introspection; acts of gratitude. I actually wrote about some of this in my book, Bottom Line of Happiness, especially the benefits of gratitude and kindness. Truly, we are happier when we live with gratitude and help others. And are these not more important than who you vote for in November? I hope and expect I’ll be in the cordial voting line this November again, yucking it up with my red and blue neighbors and watching the rhetoric wane as they would have spent all the political money this cycle. Take a breath… one way or another, it’ll be ok.
“Hey you, out there on the road
Always doing what you're told
Can you help me?
Hey you, out there beyond the wall
Breaking bottles in the hall
Can you help me?
Hey you, don't tell me there's no hope at all
Together we stand, divided we fall” -Pink Floyd, 1979
1979!!! Yes, we don’t really change. But the solutions remain the same.