December 2022 – NEWSLETTER

WHAT YOU’LL FIND INSIDE:

• FOOD DRIVE UPDATE
• IMPORTANT DATES
• CLIENT SPOTLIGHT
• END OF YEAR TAX SAVING MOVES

Reminder…log-in to Client Access at least once every 6 months to maintain your paperless settings

The USS Delaware is part of the Virginia class, a class of nuclear-powered, fast-attack submarines in service in the U. S. Navy. They incorporate the latest in stealth, intelligence gathering and weapons systems technology. According to Military.com, “Attack submarines are designed to seek and destroy enemy submarines and surface ships; project power ashore with Tomahawk cruise missiles and Special Operation Forces; carry out Intelligence, Surveillance, and Reconnaissance (ISR) missions; support battle group operations; and engage in mine warfare.” Alan described fast-attack submarines as “the hunters and killers of the sea” and said that they are used for clandestine and classified missions such as sneaking CIA agents onto a beach.

The submarine, which has been operational since April of 2020, is the 7th U. S. Navy ship to be named after the state of Delaware, the first being a 24-gun frigate launched in July of 1776. It is also the first of the seven to be a submarine. There are 134 officers and personnel on board.

Investors that reach a certain age – 70 1/2 for those born before July 1, 1949; 72 for those born after – are required to take RMDs from their IRAs. You’ll face a hefty 50% tax penalty on amounts not withdrawn from your IRA to meet the RMD, so be sure to speak with your advisor to ensure you’ve met your obligations.

A few reminders for future distribution planning:

• RMDs can be automated with your advisor to help ensure you don’t miss applicable deadlines.
• Your first RMD can be delayed until April 1 of the year after you turn 72. If you delay, however, you must also take your second RMD in the same tax year. This can inflate your income, which may affect your tax bracket.
• Subsequent RMDs must be taken no later than December 31 of each calendar year.
• Qualified charitable distributions allow traditional IRA owners who transfer RMDs to qualified charities to exclude the amount donated from their adjusted gross incomes, up to $100,000.
• Be mindful of how taking a distribution will impact your taxable income or tax bracket. If you have space left in your bracket or a down income year, you may want to consider taking additional distributions.

To harvest or not to harvest

Evaluate whether you could benefit from tax-loss harvesting – selling a losing investment to

offset gains. The first $3,000 (single or married filing jointly) offsets ordinary income. Excess losses also can be carried forward to future years. With your advisor, examine the following

subtleties when aiming to decrease your tax bill:

• Short-term gains are taxed at a higher marginal rate; aim to reduce those first.
• Don’t disrupt your long-term investment strategy when harvesting losses.
• Be aware of “wash sale” rules that affect new purchases before and after the sale of a security. If you sell a security at a loss but purchase another “substantially identical” security – within 30 days before or after the sale date – the IRS likely will consider that a wash sale and disallow the loss deduction. The IRS will look at all your accounts – 401(k), IRA, etc. – when determining if a wash sale occurred
  

Manage your income and deductions

Those at or near the next tax bracket should pay close attention to anything that might bump them up and plan to reduce taxable income before the end of the year.

• Determine if it makes sense to accelerate deductions or defer income, potentially allowing you to minimize your current tax liability. Some companies may give you an opportunity to defer bonuses and so forth into a future year as well.
• Certain retirement plans also can help you defer taxes. Contributing to a traditional 401(k) allows you to pay income tax only when you withdraw money from the plan in the future, at which point your income and tax rate may be lower or you may have more deductions available to offset the income.*
• Evaluate your income sources – earned income, corporate bonds, municipal bonds, qualified dividends, etc. – to help reduce the overall tax impact
  

Evaluate life changes

From welcoming a new family member to moving to a new state, any number of life changes may have impacted your circumstances over the past year. Bring your financial advisor up to speed on major life changes and ask how they could affect your year-end planning.

• Moving can significantly impact tax and estate planning, especially if you’ve relocated from a high income tax state to a low income tax state, from a state with a state income tax to one without (or vice versa), or if you’ve moved to a state with increased asset protection. Note that moving expenses themselves are no longer deductible for most taxpayers.
• Give thought to your family members’ life changes as well as your own – job changes, births, deaths, weddings and divorces, for example, can all necessitate changes – and consider updating your estate documents accordingly
  

Next steps

Consider these to-do’s as you prepare to make the most of year-end financial moves, and discuss with your financial advisor and tax professional:

• Manage your income and deductions, paying close atten­tion to your marginal tax bracket.
• Evaluate your investments, keeping in mind whether you could benefit from tax-loss harvesting.
• Make a list of the life changes you and your family have experienced during the year.

*Withdrawals prior to age 59 1/2 may also be subject to a 10% federal penalty tax. RMDs are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Material prepared by Raymond James for use by its advisors.

Any opinions are those of the author and are not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. All opinions are as of this date and are subject to change without notice. All opinions are as of this date and are subject to change without notice.

Raymond James is not affiliated with the above independent organizations and/or charitable causes.

Don Hershberger, CFP®, AIF®, CRC®, Founder and President, PWM, was named on the 2022 Forbes Best-in-State Wealth Advisor list.

Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Paramount Wealth Management is not a registered broker/dealer and is independent of Raymond James Financial Services.

The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors that are considered have a minimum of seven years of experience, and the algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Out of approximately 34,925 nominations, more than 6,550 advisors received the award. This ranking is not indicative of an advisor’s future performance, is not an endorsement, and may not be representative of individual clients’ experience. Neither Raymond James nor any of its Financial Advisors or RIA firms pay a fee in exchange for this award/rating. Raymond James is not affiliated with Forbes or Shook Research, LLC. Please visit https://www.forbes.com/best-in-state-wealth-advisors for more info.

 Any opinions are those of the author and are not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. All opinions are as of this date and are subject to change without notice. All opinions are as of this date and are subject to change without notice.

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