November 2022 Newsletter

WHAT YOU’LL FIND INSIDE:

• A PERPETUAL THANKSGIVING
• IMPORTANT DATES
• 4th ANNUAL FOOD DRIVE
• 2023 RETIREMENT PLAN CONTRIBUTION LIMITS
• YEAR-END GIVING STRATEGIES

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

• Contribution limits for 401(k) and other retirement plans for the 2023 tax year are $22,500 or $30,000 if you’re 50 or older (2022: $20,500 and $27,000).
• Consider making additional salary deferrals if you are eligible to participate in an employer supplemental employee retirement plan (SERP). This will enable you to further maximize contributions to reduce your taxable income now and defer more compensation into later years when your tax rate may be lower.
• You can accumulate funds on a tax-deferred basis to pay for healthcare expenses through a health savings account (HSA) or flexible savings account (FSA). Your workplace may offer one, both or neither of these options, so check with your employer. HSA contribution maximums in 2023 are $3,850 for self-only and $7,750 for families, with an additional $1,000 catch-up contribution allowed for individuals age 55 or older (2022: $3,650 and $7,300). The limit for individual health FSA contributions is $3,050 (note that dependent care FSAs have a higher cap of $5,000); employer contributions do not count toward this maximum.
• Once you maximize employer retirement plans, consider contributing to an IRA (still a $6,500/year limit, or $7,500 if you’re 50 or over). Traditional IRA contributions are tax deductible if your modified adjusted gross income is under $83,000 for individuals (phase-outs begin at $73,000) or $136,000 for joint filers (phase-outs begin at $116,000). You must establish a new IRA account by April 15, 2024, for 2023 contributions, and you have until then to make 2023 contributions to an IRA.
• If you work for yourself, consider contributing to a solo 401(k) retirement plan, SEP IRA or SIMPLE plan.

Your financial advisor can help develop a retirement account contribution strategy that’s tailored to your unique situation.

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.

You can steer a portion of those distributions, up to $100,000, directly to a qualified charity, taking a pass on the income taxes that would normally be due on that portion of your RMD. This is what’s called a qualified charitable distribution, or QCD. And you don’t need to itemize your deductions to be able to take advantage of the QCD.

Supercharge your giving with a donor advised fund (DAF). Bunching your donations into a single year is one way to push past the threshold for itemizing, instead of making smaller gifts each year that might not be tax deductible. You receive an immediate tax deduction up to the maximum allowed for your contribution to a DAF. If you donate cash, you can deduct up to 60% of your adjusted gross income (AGI); with appreciated securities, the deduction is limited to 30% of AGI. Any giving beyond these limits may be carried forward for up to five years. Then you decide which charities will receive distributions and how much they’ll be given. You can also give securities held for more than a year to a DAF, which can allow you to avoid paying long-term capital gains taxes.

Donate appreciated securities. If you donate stock that has appreciated for more than a year directly to a nonprofit, including a DAF, there are no capital gains taxes to pay and you can potentially take a deduction for the full fair-market value. Considering the maximum federal capital gains tax rate is 20% on long-term holdings, that’s a significant boost to your donation versus selling the stock and then donating the money. Most charities are equipped to handle these types of gifts, and they can be especially appealing if you have concentrated stock holdings. If any roadblocks surface in donating stock directly, using a DAF could potentially remove them.

Make a gift with significance. Maybe a loved one passed away and you want to establish a scholarship fund in their name. Or you’ve been thinking about your estate plan and you want to know your options for supporting a favorite charity. Perhaps you’re passionate about a specific issue and you want to start a foundation to support it. For these types of longer-term charitable gifts, there are several sophisticated strategies to consider, including trusts, life insurance and more.

If you want to make a big difference with your philanthropy, using both your head and your heart can pay off. Know that we’re always here to bounce ideas off and to work out the details in collaboration with your tax and legal professionals.

Material prepared by Raymond James for use by its advisors. Raymond James does not provide tax services. Changes in tax laws or regulations may occur at any time. You should discuss any tax or legal matters with the appropriate professional.

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.

 This may constitute a commercial email message under the CAN-SPAM Act of 2003. If you do not wish to receive marketing or advertising related email messages from us, please reply to this message with “unsubscribe” in your response. You will continue to receive emails from us related to servicing your account(s).