Articles tagged with: farm and business succession

Should You File Jointly, Or Not?

For many married couples, filing jointly is a good idea, but there are exceptions.

Ninety-five percent of married couples file joint federal tax returns. Filing jointly can be convenient. Frequently, there’s a financial advantage, but that does not mean it should be done without consideration.1

Years ago, there was less incentive to file jointly. That was because the “marriage penalty” for doing so was effectively greater. There is no written “marriage penalty” in the Internal Revenue Code, but, in the past, income tax brackets were structured a bit differently and spouses having similar annual incomes sometimes paid more taxes by filing jointly than single taxpayers did.

There are many good reasons to file jointly. Nearly all of them involve saving money.

Joint filing may give you an effective tax break right off the bat. Currently, married taxpayers who file separately face the 28%, 33%, 35%, and 39.6% income tax brackets at lower income thresholds than other unmarried taxpayers.2

Joint filers can claim significant tax credits that marrieds filing separately cannot. If you want to claim the American Opportunity Tax Credit, the Lifetime Learning Credit, the Elderly or Disabled Credit, or the Earned Income Tax Credit (EITC), you have to file jointly. Joint filing also gives you the potential to claim the full Child Tax Credit, rather than a reduced one.3

Deductions, too, decrease when you file separately as a married couple. Standard deductions fall significantly. Phase-out ranges affect itemized deductions, and some itemized deductions are unavailable for married couples who do not file jointly. Couples who file separate 1040s can only deduct 50% of the capital gains losses joint filers can. In addition, if one spouse elects to itemize deductions, so must the other (there must be a separate Schedule A for each spouse). The spouse with fewer deductions has no ability to use the standard deduction to lower his or her taxable income.2,3

Joint filing even helps you with regard to the Alternative Minimum Tax. When you file separately as a married couple, your AMT exemption falls by 50%. So you may be more susceptible to the AMT if you file separately. If the AMT affects you, you will find many federal tax deductions reduced or unavailable to you.3

Do you live in a community property state? If you do, you may know that state tax law defines what is considered separately held or jointly held property. If you want to itemize deductions in a community property state, the paperwork can be onerous.3

More of your Social Security benefits may be taxed if you file separately. Social Security gives you a “base exemption,” an income threshold above which Social Security benefits may be taxable. The base exemption for married couples filing jointly is $32,000, meaning that if 50% of the Social Security benefits you receive in a tax year plus your other income in a tax year exceeds $32,000, taxes may apply. The base exemption for married couples filing separately who live together at any time during the tax year is $0. It improves to $25,000 for married couples filing separately who live apart for an entire year.4

So why would you not file jointly when married? In certain circumstances, filing separately may be wiser.

Maybe you do not trust your spouse financially. If your spouse is a tax cheat or interprets federal tax law very loosely, filing jointly could prove hazardous in the case of an audit or other troubles. Both spouses must sign a joint return, meaning that both spouses are legally responsible for all taxes, penalties, and fines linked to that return. Yes, an innocent spouse may be offered tax protection by the IRS, but that innocence must be proven.2,3

Maybe you or your spouse have large out-of-pocket medical expenses. If so, and if the spouse contending with such bills earns much less than the other, there may be merit in filing separately. By doing so, the spouse with far less income might have an opportunity to meet the 10% AGI threshold needed to itemize medical expenses. (The 7.5% AGI threshold for itemizing these costs is still in place for taxpayers age 65 and older.)2

Maybe you are separating or divorcing. If that is the case, then it may seem only natural to begin filing separately while still married. Doing so now may lessen the chance of the two of you wading through tax issues in the aftermath of a split.

If you are unsure about whether to file jointly or singly, you can ask a tax professional for his or her opinion. Or, that professional can look at last year’s return and run the numbers for you. Most couples find that filing jointly works out best, but there are exceptions.

Mike Moffitt may be reached at phone# 641-464-2248 or email: mikem@cfgiowa.com
Website: www.cfgiowa.com

Michael Moffitt is a Registered Representative with and Securities are offered through LPL Financial, Member FINRA/SIPC. Investments advice offered through Advantage Investment Management (AIM), a registered investment advisor. Cornerstone Financial Group and AIM are separate entities from LPL Financial.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – forbes.com/sites/robertwood/2016/01/26/married-filing-joint-tax-returns-irs-helps-some-couples-with-offshore-accounts/ [2/6/16]
2 – abcnews.go.com/Business/filing-taxes-jointly-good-idea/story?id=22504248 [2/17/14]
3 – foxbusiness.com/features/2015/03/06/should-couples-file-taxes-separately-or-jointly-which-is-best-for.html [3/6/15]
4 – irs.com/articles/how-are-social-security-benefits-taxed [2/11/16]

CFGIowa Weekly Economic Update October 7, 2013

WALL STREET FEELS EFFECTS OF SHUTDOWN

Even with the federal government mostly out of commission last week and a debt ceiling battle brewing, stocks didn’t fall too far. The NASDAQ actually rose 0.69% in five trading days, marking its fifth straight weekly advance; the S&P 500 lost only 0.07%. The CBOE VIX, unsurprisingly, rose 9.25% last week to settle at 16.89 Friday. COMEX gold hit its lowest level since August on Tuesday, and the dollar touched a one-month low against the yen on Thursday. The week ended with no resolution to the budget impasse. Last week, International Monetary Fund managing director Christine Lagarde cautioned that U.S. Gross Domestic Product (GDP) could slip below 2% this year if the debt ceiling is not raised.1,2

ADP REPORT GAINS GREATER SIGNIFICANCE

As the Labor Department’s September employment report didn’t come out last week, the ADP National Employment Report took center stage. ADP said private payrolls expanded by 166,000 jobs last month; economists polled by Reuters had forecast an increase of 180,000. ADP compiles its report off of available data, as opposed to the fresh data presented by the Labor Department on the first Friday of each month. The official September jobs report will likely appear on the Friday after the federal government reopens.3,4

MANUFACTURING EXPANDS IN SEPTEMBER

The Institute for Supply Management’s purchasing manager index for the factory sector came in at a healthy 56.2 for September, up from 55.7 in August. The Institute’s non-manufacturing PMI fell 4.2 points in September to 54.4; even so, it showed the service sector growing for the 45th straight month.5

THIS WEEK: No major economic releases are scheduled for Monday. Quarterly results from Yum! Brands and Alcoa will kick off a new earnings season Tuesday. Wednesday offers earnings reports from Family Dollar and Costco, and the September 17-18 FOMC minutes. Thursday brings the latest initial jobless claims figures, plus a speech from European Central Bank president Mario Draghi at the Economic Club of New York. Wells Fargo and JPMorgan Chase report earnings Friday, and the preliminary October consumer sentiment index from the University of Michigan appears; the September PPI and September retail sales reports are also slated to be released.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+15.02

+11.03

+9.20

+5.75

NASDAQ

+26.11

+20.90

+19.11

+10.25

S&P 500

+18.53

+15.68

+10.76

+6.42

REAL YIELD

10/4 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.46%

-0.86%

2.18%

2.16%

Sources: cnbc.com, bigcharts.com, treasury.gov – 10/4/131,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


Please feel free to forward this article to family, friends or colleagues.  If you would like us to add them to our distribution list, please send us their address (click the link). We will contact them first and request their permission to add them to our list.


«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services.

The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade.

The Institute for Supply Management (ISM) index is based on surveys of more than 300 manufacturing firms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment, production inventories, new orders, and supplier deliveries.  A composite diffusion index is created that monitors conditions in national manufacturing based on the data from these surveys.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices.

The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – tinyurl.com/of5e7ad [10/4/13]
2 – marketwatch.com/story/the-debt-ceiling-issue-and-markets-in-6-charts-2013-10-04 [10/4/13]
3 – reuters.com/article/2013/10/02/us-usa-economy-employment-adp-idUSBRE9910IW20131002 [10/4/13]
4 – pbs.org/newshour/businessdesk/2013/10/did-we-really-add-166000-jobs.html [10/2/13]
5 – ism.ws/ISMReport/NonMfgROB.cfm [10/3/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F4%2F12&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F4%2F12&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F4%2F12&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F3%2F08&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F3%2F08&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F3%2F08&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F3%2F03&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F3%2F03&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F3%2F03&x=0&y=0 [10/4/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/4/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/4/13]

CFGIowa Weekly Economic Update June 25, 2013

June 24, 2013
FED OUTLINES END FOR STIMULUS, STOCKS SLIP

Last Wednesday, Federal Reserve Chairman Ben Bernanke shared the central bank’s vision for winding down its current aggressive easing effort – the potential tapering of QE3 by late 2013, and the end of the program by mid-2014 if economic conditions permit. Wall Street reacted abruptly – the Dow sank more than 550 points in less than two trading sessions. In the near term, the Fed will keep buying $85 billion in bonds per month and maintain interest rates at near-zero levels.1,2

INFLATION PRESSURE MINIMAL IN MAY

The 0.1% rise in the Consumer Price Index last month put yearly inflation at 1.4%, well under the Fed’s 2.0% target. Energy prices rose 0.4% in May but fell 1.0% in a year; medical costs declined 0.1% for May, the first monthly decrease since 1975.3

EXISTING HOME SALES IMPROVE

The National Association of Realtors reported a 4.2% jump in residential resales for May, with the annualized sales pace topping the 5 million mark for the first time in 3½ years. From May 2012 to May 2013, the median price of an existing home rose 15.4% to $208,000 as the number of listings on the market shrank 10.1%.4

LEADING INDICATORS EDGE NORTH 0.1% IN MAY

Slight improvement was seen in the Conference Board’s latest barometer of the economic outlook for the next 3-6 months, but economists surveyed by Bloomberg thought it would rise 0.2%. April’s gain was revised up to 0.8%.4

A WILD RIDE FOR STOCKS

Volatility was rampant last week on Wall Street, and so were losses. In five days, the S&P 500 slipped 2.11% to 1,592.43, the Dow lost 1.80% to 14,799.40 and the NASDAQ fell 1.94% to 3,357.25.5

THIS WEEK: Nothing major is scheduled for Monday. Tuesday brings the April Case-Shiller and FHFA home price indices, the Conference Board’s June consumer confidence poll, reports on May hard goods orders and new home sales and earnings from Lennar, Carnival, Walgreens and Barnes & Noble. Wednesday, the Bureau of Economic Analysis publishes its final estimate of Q1 GDP, and earnings arrive from Monsanto, Bed Bath & Beyond and General Mills. The latest initial jobless claims figures come in Thursday, along with NAR’s report on May pending home sales, the Commerce Department’s report on May consumer spending and earnings news from KBHome, ConAgra, Nike and Accenture. Friday brings the final June University of Michigan consumer sentiment survey and earnings from Blackberry.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+12.94

+17.70

+4.99

+6.08

NASDAQ

+11.19

+17.42

+7.91

+10.41

S&P 500

+11.66

+20.14

+4.17

+5.99

REAL YIELD

6/21 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.59%

-0.47%

1.72%

1.77%

 

Sources: cnbc.com, usatoday.com, bigcharts.com, treasury.gov – 6/21/135,6,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

Please feel free to forward this article to family, friends or colleagues.
If you would like us to add them to our distribution list, please reply with their address.
We will contact them first and request their permission to add them to our list.

 

 

«RepresentativeDisclosure»

* Quantitative Easing is a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you.

This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.

Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices.

The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – cnbc.com/id/100831276 [6/20/13]

2 – foxbusiness.com/markets/2013/06/19/wall-street-pummeled-amid-fed-woes/ [6/19/13]

3 – online.wsj.com/article/SB10001424127887323566804578553151902340728.html [6/18/13]

4 – bloomberg.com/news/2013-06-20/sales-of-previously-owned-u-s-homes-rise-more-than-forecast.html [6/20/13]

5 – cnbc.com/id/100834381 [6/21/13]

6 – usatoday.com/money/markets/overview/ [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F21%2F12&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F21%2F12&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F21%2F12&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F20%2F08&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F20%2F08&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F20%2F08&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F20%2F03&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F20%2F03&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F20%2F03&x=0&y=0 [6/21/13]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/21/13]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/21/13]