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How to Give to Your Favorite Causes AND Reduce Your Tax Bill for 2018

We often give to charities on the spur of the moment during fundraising drives or at an event like a gala, rather than having a charitable giving plan. Giving by check (otherwise called checkbook philanthropy) is generally the default for these spur of the moment donations. With the doubling of the standard deduction from the recent tax reform, the tax benefit of such gifts has been reduced or eliminated as most households won’t have enough deductions to itemize.

By having a plan, we can work to reduce your tax bill, while still giving to your favorite causes. read more…

This Year is Different – Revisit Your Withholding Elections Now!


When I got married in 2016, my wife and I updated our paycheck withholding status to “married” and kept our previous withholding allowances the same as part of the flurry of changes that followed. In the past, we generally received a tax refund when filing as single with two allowances. We could now itemize our deductions since we bought a house and had mortgage interest, real estate taxes, sales tax and a small amount of charitable giving. Even with several thousand dollars of deductions above the standard deduction, we’re still going to owe Uncle Sam a meaningful amount. To avoid underwithholding taxes in the future, as well as a penalty, we took the W-4 tables for two earners seriously and chose the proper amount of extra tax withholding from each paycheck going forward. read more…

What’s Left for Itemized Deductions After the 2017 Tax Cuts and Jobs Act?

With the doubling of the standard deduction and elimination or reduction of several itemized deductions, you might think there aren’t many opportunities left to itemize. That isn’t the case at all, depending on your circumstances. With the recent tax reform, it’s never been a better time to figure out what you can still itemize in 2018 and in future tax years. To keep track of these deductible expenses, it’s important to be organized and maintain a box or folder to store your receipts throughout the year. This level of organization is necessary whether you work with a tax professional or prepare your own taxes.

Deductions fall into these categories:

  • Medical and dental expenses
  • Taxes you paid
  • Interest you paid
  • Gifts to charity
  • Casualty and theft losses
  • Other miscellaneous deductions

Certain categories, including medical and dental expenses, casualty and theft losses, are subject to a floor that only permits you to deduct expenses above certain thresholds, such as 7.5% of your adjusted gross income (AGI – IRS Form 1040, line 38). Your AGI is your total amount of income from all sources after subtracting certain deductions, such as alimony paid, HSA contributions, the deductible part of self-employment taxes, etc. For example, if your AGI is $100,000 and the threshold for medical expenses is 7.5%, then any qualifying expenses above $7,500 can be included and deducted. read more…

Merriman’s Take on Recent Tax Legislation

In December, Congress passed sweeping tax changes, and the President signed them into law. This legislation will impact many tax planning strategies going forward.

This document summarizes some of the major provisions most likely to impact the families we work with. As always, your advisor can answer questions and provide guidance specific to you.

Most of the individual provisions will remain until 2025, after which they are scheduled to expire and revert to current law. Here are some key highlights of the legislation: read more…

Read This Before You File Your Taxes!


Before filing your tax return, take a few moments to consider the extra ways you can reduce your tax bill and maximize your retirement savings at the same time. Certain retirement account contributions provide tax-deductions or opportunities for future tax planning.

To qualify to contribute to any of the following accounts, you or your spouse must have earned income in 2017. You must open and fund these accounts before the normal tax filing deadline of Monday, April 16, 2018. With one exception, for the SEP IRA, filing for an extension does not extend the time you have to make contributions. read more…

Medicare Basics

Turning 65 marks an important milestone. It’s the age you become eligible for Medicare – healthcare the federal government provides for retirees.

I. Medicare Part A, B, C and D

Part A – Also called Original Medicare, Medicare Part A covers your stays in hospitals and skilled nursing facilities, some health services and hospice care. Part A has no premiums as long as you have 40 qualifying quarters of contribution during your life, similar to qualifying for Social Security benefits. You may also qualify based on your spouse, even if you’re divorced or your spouse passed away. If you don’t meet any of these conditions, you have to pay monthly premiums.

Part B – Covers doctors’ services, outpatient care and medical equipment. There are monthly premiums for Part B.

Part C – Also called Medicare Advantage plans (or Medicare Health Plan), Medicare Part C allows private health insurers to provide Original Medicare benefits (Part A and Part B) through their networks (HMOs, PPOs and fee-for-service). The insurers must offer the same benefits as Original Medicare, but can have different coverage restrictions, costs, limits, etc. This coverage is optional.

Part D – Provides prescription drug coverage through private insurers. The government subsidizes the costs of prescription drugs and the cost of Part D insurance to reduce costs for retirees. If you have a Medicare Advantage plan, then you can bundle it with Part D. If you have Original Medicare, Part D is separate policy. This coverage is optional.

II. When to apply

Part A and B

Depending on your circumstances, you’re either enrolled automatically in Part A and B, or you must enroll yourself. You’re enrolled automatically if you are: read more…

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