Battle-Tested Advisor

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p class=”p2″>As an LPL financial planner, I try to stay abreast of the discussions regarding my industry in the media. I’ve noticed lately that the cost of financial planning services and internal costs of the investments themselves has been coming up more and more frequently, and this is good. Cost is definitely an important issue in financial and retirement planning, as it detracts from the total return experienced by the investor. Since we’re on that topic, I’d like to shed some light on a cost associated with retirement planning that is rarely mentioned but equally important and far less understood.

Without a doubt, one should take care to minimize the costs in the investments she owns. I understand why at first glance, it would seem that having a discount broker would lower costs even more. This assumes though, that one is able to choose the appropriate investments and formulate (and stick to) a plan that will allow her to retire and live at a comfortable standard for probably 30 years during which, the cost of living will likely increase by 2.5 times, assuming long-term inflation trends continue.

Let’s assume the investor is able to pick some really solid investments, since the discount broker helps very little in this area. Still, the odds are against him. Why? Research (rarely discussed on television or in print) shows that the typical investor achieves around half the return of the actual funds he owns. How could this be? Quite simply because many folks make ill-advised decisions, often emotionally, at the worst possible times. For example: they panic out of a declining market and then get back in after it has already risen above where they sold out. Or, they bail out of a fund that has had a tough year and get into the 5-star fund that was on the cover of this month’s issue of Money magazine. Then, next year, the 5 star fund has a terrible year and the previously lagging fund has a great year. Or, they pile into technology stocks in 1999 (just before the “tech bubble”), or sell all their investments and go to 100% cash in 2009 just before the start of the current multi-year bull market. The nest eggs that people have spent time away from their families shedding blood, sweat, and tears to build, rightfully, have a lot of emotion tied to them. Because of this, at the critical junctures I just described, an investor needs a thoughtful, trusted, caring advisor between his forefinger and the mouse-click that can destroy a lifetime of work and planning.

That is what the small cost of a caring Financial Planner affords the investor. They say that cost is only an issue in the absence of value. I am here to say that a good planner can add much more value than her services cost. According to research firm Dalbar, over the last 30 years or so, the typical investor earned roughly 4% on an annualized basis, while her actual funds earned about 10%. The discrepancy being due to the investor selling and buying at the least opportune times, or buying or selling the wrong things at the wrong times. Because I’ve watched so many well meaning people inadvertently undermine and often destroy their own plans, it has become quite clear that the roughly 1% or so annually the investor pays a planner for her long term financial advice and behavioral coaching could potentially save the investor many multiples of what is charged (required disclaimer: However it is important to keep in mind that a financial planner cannot guarantee success as investing does involve risk).

My message: cost IS important. What, though, is the cost of NOT having a qualified, caring, battle-tested advisor by your side in what could be your darkest hour?

Another required disclaimer: The opinions in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. No strategy can ensure success or protect against loss. Investing does involve risk, including loss of principal.

The Cycle of Investing

Measuring the Value of a Financial Advisor

What’s the value of a financial advisor?

Two studies found that working with a financial professional can result in higher returns and potentially lower personal stress.

Lower Stress

Seventy-six percent of people within 15 years of retirement are stressed when thinking about retirement savings and investments.¹

Working with a financial advisor to develop a written retirement income strategy, however, can increase your confidence and happiness, according to Franklin Templeton’s annual Retirement Income Strategies and Expectations Survey.

With and Without²

Investors… Confident with plan Happy with plan
With an advisor 91% 92%
Without an advisor 44% 44%

Higher Returns

In addition to providing financial guidance, financial advisors may also add about three percentage points in net portfolio returns over time, according to a study by Vanguard.³

Financial Advisor Advice Components⁴

Advice Advice Elements Potential Added Return to Investor Portfolio
Portfolio Construction Asset allocation
Asset location
Up to 1.2%
Wealth Management Rebalancing
Drawdown strategies
Up to over 1%
Behavioral Coaching Managing investor emotions
Aiding decision-making
Up to 1.5%

It’s important to remember that financial advisors also may offer guidance that wasn’t measured in the two studies. Advisors can help develop strategies that protect against the financial consequences of loss of income, and coordinate with other financial professionals on tax and estate management.

    1. Franklin Templeton, 2015
    2. Franklin Templeton, 2015
    3. Vanguard.com, 2015
    4. Vanguard.com, 2015

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2015 FMG Suite.

A Taxing Story: Capital Gains and Losses

Chris Rock once remarked, “You don’t pay taxes, they take taxes.”¹ That applies not only to income, but also to capital gains.

Capital gains result when an individual sells an investment for an amount greater than his or her purchase price. Capital gains are categorized as short-term (a gain realized on an asset held one year or less) or as long-term (a gain realized on an asset held longer than one year).

Long-Term vs. Short-Term Gains

Short-term capital gains are taxed at ordinary income tax rates, while long-term gains are taxed at a lower rate, based on an individual’s marginal income tax bracket.

If you are in the… your long-term capital gains rate will be…
10%-15% tax bracket 0%
25%-35% tax bracket 15%
39.6% tax bracket 20%

It should also be noted that taxpayers whose adjusted gross income is in excess of $200,000 (single filers) or $250,000 (joint filers) may be subject to an additional 3.8% tax as a net investment income tax.²

Also, keep in mind that the long-term capital gains rate for collectibles and precious metals remains at a maximum 28%.

Rules for Capital Losses

Capital losses may be used to offset capital gains.³ If the losses exceed the gains, up to $3,000 of those losses may be used to offset the taxes on other kinds of income. Should you have more than $3,000 in such capital losses, you may be able to carry the losses forward. You can continue to carry forward these losses until such time future realized gains exhaust them. Under current law, the ability to carry these losses forward is lost only on death.

Finally, for some assets, the calculation of a capital gain or loss may not be as simple and straightforward as it sounds. As with any matter dealing with taxes, individuals are encouraged to seek the counsel of a professional tax advisor before making any tax-related decisions.

  1. Brainy Quote, 2015
  2. IRS, 2015
  3. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.

All Muni Bonds Are Not Created Equal

The city of Detroit emerged from bankruptcy in 2014. Still, its previous inability to pay investors left some questioning their long-held assumption about the relative safety of municipal bonds.¹ Without question, in the wake of Detroit’s troubles, gaining a better understanding of municipal bonds makes more sense than ever.²

At their most basic level, there are two types of municipal bonds:

  1. General obligation bonds, which are a promise by the issuer to levy taxes sufficient to make full and timely payments to investors, and
  2. Revenue bonds, which are bonds whose interest and principal are backed by the revenues of the project that the bonds are funding.

Types of Risk

Both general obligation and revenue bonds share certain investment risks, including but not limited to market risk (the risk that prices will fluctuate), credit risk (the possibility that the issuer will not be able to make payments), liquidity risk (muni markets may be illiquid and result in depressed sales prices) and inflation risk (the risk that inflation may erode the purchasing power of principal and interest payments). They also may share call risk, the risk that a bond may be redeemed prior to maturity.

Revenue bonds are considered riskier than general obligation bonds since they are only obligated to make repayments to the extent that the project funded by the bond generates the necessary revenue to meet payment obligations.

Managing Risk

Investors seeking to manage their risk may want to consider investing in general obligation bonds with investment-grade ratings.

Bonds used to support essential services, such as water or sewage, are also considered less risky since these services are normally unaffected by economic conditions that may impact other revenue bonds, such as private activity “munis,” which fund projects by private businesses or nongovernmental borrowers.

In light of the widespread uncertainty about the fiscal health of municipalities nationwide, diversification may be more critical now than ever before.³

Since municipal bonds generally are sold in increments of $5,000 and may be subject to disadvantageous pricing for smaller investors, many individuals look to mutual funds to manage their municipal bond portfolio, since they offer the diversification, research, analysis and buying power that most individuals can’t match.

Mutual funds are sold only by prospectus. Please consider the charges, risks, expenses and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

  1. Marketplace, January 29, 2015. A municipal bond issuer may be unable to make interest or principal payments, which may lead to the issuer defaulting on the bond. If this occurs, the municipal bond may have little or no value.
  2. Municipal bonds are free of federal income tax. Municipal bonds also may be free of state and local income taxes for investors who live in the area where the bond was issued. If a bondholder purchases shares of a municipal bond fund that invests in bonds issued by other states, the bondholder may have to pay income taxes. It’s possible that the interest on certain municipal bonds may be determined to be taxable after purchase.
  3. Diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if municipal bond prices decline.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.

A Decision Not Made Is Still a Decision

Whether through inertia or trepidation, investors who put off important investment decisions might consider the admonition offered by motivational speaker Brian Tracy, “Almost any decision is better than no decision at all.”¹

Investment inaction is played out in many ways, often silently, invisibly and with potential consequence to an individual’s future financial security.

Let’s review some of the forms this takes.

Your 401(k) Plan

The worst non-decision is the failure to enroll. Not only do non-participants sacrifice one of the best ways to save for their eventual retirement, but they also forfeit the money from any matching contributions their employer may offer. Not participating may be one of the most costly non-decisions one can make.

The other way individuals let indecision get the best of them is by not selecting the investments for the contributions they make to the 401(k) plan. When a participant fails to make an investment selection, the plan will have provisions for automatically investing that money. And that investment selection may not be consistent with the individual’s time horizon, risk tolerance and goals.

Distributions from 401(k) plans and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions. The 10% early withdrawal penalty may be avoided in the event of death or disability.

Non-Retirement Plan Investments

For homeowners, “stuff” just seems to accumulate over time. The same may be true for investors. Some buy investments based on articles they have read or on a recommendation from a family member. Others may have investments held in a previous employer’s 401(k) plan.

Over time, they can end up with a collection of investments that may have no connection to their investment objectives. Because the markets are dynamic, an investment that may have made good sense yesterday might no longer make sense today.

By periodically reviewing what they own, investors can determine whether their portfolio reflects their current investment objectives. If they find discrepancies, they are able to make changes that could positively affect their financial future.

Whatever your situation, your retirement investments require careful attention and benefit from deliberate, thoughtful decision making. Your retired self will one day be grateful that you invested the necessary time to make wise decisions today.

1. Brainy Quote, 2015

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.

The Great Debate Continues: Active vs. Passive

Whether it’s sports, music or politics, life holds any number of “great debates” that never seem to reach a conclusion. In investments, that great debate asks the question, “Active or Passive Investing: Which Is Better?”

The fascinating aspect of this debate is that equally intelligent people can argue polar opposite positions, leaving the rest of us to wonder what the answer is—if one even exists.

Passive Pointers

The case for passive management is anchored in the evidence that the preponderance of money managers have failed consistently to beat their comparative index. This, the argument goes, is true for two primary reasons:

  1. Markets are efficient and all known information is already reflected in the price of the stock, making it difficult for managers to find companies that are expected to outperform.¹
  2. The hurdle of an elevated expense ratio typical of actively managed mutual funds makes it hard to match or exceed a low-expense index fund.

Active Arguments

Active managers counter that, while the markets may be generally efficient, there are windows of inefficiency created by the time it takes for information to be properly reflected in a stock’s price.

Active managers further argue that performance is not just about relative return, but also about managing risk. For instance, if an active manager can deliver a hypothetical 90% of the index return at 70% of its risk, then that constitutes a measured outperformance.²

Unlock the Combination

Ultimately, it’s a decision based on what you want to pursue. Do you prefer the approach taken by index funds or the strategy behind active management? For some, the combination of both methods represents an approach that takes no sides but seeks to tap into the distinctive benefits each offers.

Mutual funds are sold only by prospectus. Please consider the charges, risks, expenses and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

  1. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.
  2. This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.

Get Embed Code Share On Social Media Getting a Head Start on College Savings

The U.S. Department of Agriculture estimates a middle-income family with a child born in 2015 can expect to spend about $275,000 to raise that child to the age of 17.¹ That’s roughly equal to the median value of a new home in the U.S.²

And if you’ve already traded that super-charged convertible dream for a minivan, you can expect your little one’s college education to cost as much as $336,132.³

But before you throw your hands up in the air and send junior out looking for a job, you might consider a few strategies to help you prepare for the cost of higher education.

First, take advantage of time. The time value of money is the concept that the money in your pocket today is worth more than the same amount will be worth tomorrow because it has more earning potential. If you put $100 a month toward your child’s college education, after 17 years’ time, you would have saved $20,400. But that same $100 a month would be worth over $32,000 if it had generated a 5% annual rate of return.⁴ The bottom line is, the earlier you start, the more time you give your money to grow.

Fast Fact: California posted an average 59% increase in tuition and fees at public two-year colleges between 2010-11 and 2015-16. Still, California’s price remains the lowest in the country.
Source: The College Board, 2015

Second, don’t panic. Every parent knows the feeling—one minute you’re holding a little miracle in your arms, the next you’re trying to figure out how to pay for braces, piano lessons, and summer camp. You may feel like saving for college is a pipe dream. But remember, many people get some sort of help in the form of financial aid and scholarships. Although it’s difficult to forecast how much help you may get in aid and scholarships, they can provide a valuable supplement to what you have already saved.

Finally, weigh your options.There are a number of federal and state-sponsored tax-advantaged college savings programs available. Some offer prepaid tuition plans and others offer tax-deferred savings.5 Many such plans are state sponsored so the details will vary from one state to the next. A number of private colleges and universities now also offer prepaid tuition plans for their institutions. It pays to do your homework to find the vehicle that may work best for you.

As a parent, you teach your children to dream big and believe in their ability to overcome any obstacle. By investing wisely, you can help tackle the financial obstacles of higher education for them—and smooth the way for them to pursue their dreams.

  1. U.S. Department of Agriculture, 2015
  2. U.S. Census Bureau, 2015
  3. The College Board, 2015. (Based on average tuition and fees for private universities in 2015-2016 and assuming a 5% annual increase)
  4. The rate of return on investments will vary over time, particularly for longer-term investments. Investments that offer the potential for higher returns also carry a higher degree of risk. Actual results will fluctuate. Past performance does not guarantee future results.
  5. The tax implications of education savings programs can vary significantly from state to state, and some plans may provide advantages and benefits exclusively for their residents. Please consult legal or tax professionals for specific information regarding your individual situation. Withdrawals from tax-advantaged education savings programs that are not used for education are subject to ordinary income taxes and may be subject to penalties.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.

Required Reading: The Economic Report of the President

Tip: The University of California at Santa Barbara keeps an archive of Economic Reports of the President from Harry Truman’s 1947 report to the 2016 edition.
Source: Presidency.ucsb.edu, 2016

In February, the White House released its 430-page book, “2016 Economic Report of the President.”¹ If you haven’t yet made time to peruse this weighty tome, don’t beat yourself up. Most people don’t take the time to read the report—still others don’t even know it exists.

What is the “Economic Report of the President” and what does it tell us about the economy and the future?

In the wake of World War II—and worried that the economy might fall back into another Great Depression—Congress passed the Employment Act of 1946, which established the President’s Council of Economic Advisors to analyze government programs and make recommendations on economic policy. It also mandated that the president submit an annual economic report to Congress. The first report was submitted by Harry Truman in 1947.²

The report is written by the Chair of the Council of Economic Advisors, (a post being filled by Jason Furman), and includes both text and extensive data appendices.³ It must be submitted to Congress no later than 10 days after the submission of the Federal budget by the President of the United States. Although each report is different, they generally include such information as

  • Current and foreseeable trends in employment, production, real income, and Federal expenses
  • Employment objectives for various labor sectors
  • Annual goals
  • A program for carrying out objectives.

Response to the Economic Report is often mixed. Opponents to the administration tend to be critical of the president’s approach. They point out that the objectives and recommendations in the report are inevitably influenced by the administration’s opinion and policy.

However it’s important not to overlook the sheer volume of data provided by the report. This information can help identify the forces driving—or dragging—the economy. For example, the 2016 report provides data and analysis on the progress of this country’s economic recovery, as well as how it may be influenced by international economies.4

If you don’t see yourself getting cozy with a cup of coffee and the Economic Report of the President, you might consider using the internet to get an overview of its most relevant topics. Understanding the current state of the economy—and the president’s objectives for the future—may help you make plans for your own future.

  1. Whitehouse.gov, 2016
  2. Presidency.ucsb.edu, 2016
  3. Whitehouse.gov, 2016
  4. Whitehouse.gov, 2016

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.

How Stocks Work

Permitted Exchanges

What Do Your Taxes Pay For?

Tip: Mid May. If the government had raised taxes enough to cover federal borrowing, we would have had to work until May 8 just to cover the tax bill.
Source: Tax Foundation, 2015

Taxes are one of the biggest budget items for most taxpayers, yet many have no idea what they’re getting for their money.

In 2015, as in recent years, Americans spent more on taxes than on groceries, clothing, and shelter combined. In fact, we worked until late April just to earn enough money to pay our taxes. So what do all those weeks of work get us?1

Fast Fact: In the Hole. In fiscal 2015, the federal government spent an estimated $468 billion more than it collected in revenue. The government borrows the funds it needs to cover this shortfall by selling Treasury securities and savings bonds.
Source: NPR, January 26, 2015

The accompanying chart breaks down the $3.7 trillion in federal spending for 2015 into major categories. By far, the biggest category is Social Security and income programs, which consume one-third of the budget. This includes Social Security, retirement and disability programs for federal employees, food assistance, and unemployment compensation. Another 16% of the budget goes to defense and related items, and 25% goes to Medicare and health programs.2

Are taxes one of your biggest budget items? Take steps to make sure you’re managing your overall tax bill. Please consult a tax professional for specific information regarding your individual situation.

Pieces of the Federal Pie

Roughly 65% of 2015 federal spending was used for Social Security, Medicare, defense, and related programs.

Pieces of the Federal Pie

Source: Center on Budget and Policy Priorities, 2016

  1. Tax Foundation, 2015
  2. Center on Budget and Policy Priorities, 2016

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.

How Income Taxes Work

Tip: Refund Stats. The average refund during 2015 was about $2,800.
Source: Internal Revenue Service, 2015

The Internal Revenue Service estimates that taxpayers and businesses spend 6.1 billion hours a year complying with tax-filing requirements. To put this into perspective, if all this work were done by a single company, it would need about three million full-time employees and be one of the largest industries in the U.S.¹

As complex as the details of taxes can be, the income tax process is fairly straightforward. However, the majority of Americans would rather not understand the process, which explains why more than half hire a tax professional to assist in their annual filing.²

The tax process starts with income, and generally, most income received is taxable. A taxpayer’s gross income includes income from work, investments, interest, pensions, as well as other sources. The income from all these sources is added together to arrive at the taxpayers’ gross income.

What’s not considered income? Child support payments, gifts, inheritances, workers’ compensation benefits, welfare benefits, or cash rebates from a dealer or manufacturer.³

From gross income, adjustments are subtracted. These adjustments may include alimony, retirement plan contributions, half of self-employment, and moving expenses, among other items.

The result is the adjusted gross income.

From adjusted gross income, deductions are subtracted. With deductions, taxpayers have two choices: the standard deduction or itemized deductions, whichever is greater. The standard deduction amount varies based on filing status, as shown on this chart:

Deduction Amounts

Itemized deductions can include state and local taxes, charitable contributions, the interest on a home mortgage, certain unreimbursed job expenses, and even the cost of having your taxes prepared, among other things.

Once deductions have been subtracted, the personal exemption is subtracted. For the 2016 tax year, the personal exemption amount is $4,050, regardless of filing status.

The result is taxable income. Taxable income leads to gross tax liability.

Fast Fact: No Pencil and Paper. The IRS reports that about one-third of taxpayers use tax preparation software. Source: IRS, 2015

But it’s not over yet.

Any tax credits are then subtracted from the gross tax liability. Taxpayers may receive credits for a variety of items, including energy-saving improvements.

The result is the taxpayer’s net tax.

Understanding how the tax process works is one thing. Doing the work is quite another. Remember, this material is not intended as tax or legal advice. Please consult a tax professional for specific information regarding your individual situation.

  1. National Taxpayers Union, 2015
  2. Internal Revenue Service, 2015
  3. The tax code allows an individual to gift up to $14,000 per person in 2016 without triggering any gift or estate taxes. An individual can give away up to $5,450,000 without owing any federal tax. Couples can leave up to $10,900,000 without owing any federal tax. Also, keep in mind that some states may have their own estate tax regulations.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2016 FMG Suite.