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Dustin Rinaldi on tax changes: 529 plans

Dustin Rinaldi on tax changes: 529 plans

Thanks to the Tax Cuts and Jobs Act of 2017, Section 529 plan savings may now be used for K-12 tuition as well as for higher education costs.

Over 20 years ago, federal lawmakers authorized states to create tax-exempt “qualified tuition programs” — Section 529 plans — to help taxpayers fund the cost of higher education. The Tax Cuts and Jobs Act of 2017 expands Section 529 by allowing tax-free account withdrawals not only for qualified higher education expenses but also for tuition at public, private, or religious elementary and secondary schools.

Tax-free 529 withdrawals for K-12 are capped at $10,000 a year, per student

If a child is the beneficiary of multiple 529 plan accounts, the $10,000 may be distributed from one or more of the accounts. Withdrawals in excess of $10,000 would be taxed according to the Section 529 rules (generally as part nontaxable return of principal and part distribution of earnings subject to both income taxes and a 10% penalty).

529 plans typically have generous contribution limits read more

Dustin Rinaldi Shares Red Flags that Could Alert the IRS

Dustin Rinaldi Shares Red Flags that Could Alert the IRS

The IRS audited approximately 1.4 million individual tax returns filed in 2012.1 That amounts to approximately 1% of 146 million individual returns filed that year. However, fewer than one-quarter of those audits involved face-to-face meetings with IRS auditors. The rest were conducted through the mail.

Filers earning less than $100,000 had a .58% chance of being audited. Among filers with income exceeding

$200,000, the audit rate was 2.06%; for those earning more than $1 million, it climbed to 9.20%. Audit risk also increased for self-employed taxpayers who filed a Schedule C, Income and Expenses for sole proprietors.

Depending on how much income was reported, the chance of being audited ranged from 1.0% for returns listing gross receipts under $25,000 to 2.7% for those reporting gross receipts of $200,000 or more.1

What Triggers an Audit

The following are some of the red flags that could alert the IRS, aside from earning a lot of money:

1. Running a cash business

2. Claiming the home-office deduction read more

Dustin Rinaldi Shares 10 Investment Mistakes You Should Avoid

Dustin Rinaldi Shares 10 Investment Mistakes You Should Avoid

Who needs a pyramid scheme or a crooked money manager when you can lose money in the stock market all by yourself. If you want to help curb your loss potential, avoid these 10 strategies.

1. Go with the herd. If everyone else is buying it, it must be good, right? Wrong. Investors tend to do what everyone else is doing and are overly optimistic when the market goes up and overly pessimistic when the market goes down. For instance, in 2008, the largest monthly outflow of U.S. domestic equity funds occurred after the market had fallen over 25% from its peak. And in 2011, the only time net inflows were recorded was before the market slid over 10%.1

2. Put all of your bets on one high-flying stock. If only you had invested all your money in Apple 10 years ago, you’d be a millionaire today. Perhaps, but what if, instead, you had invested in Enron, Conseco, CIT, WorldCom, Washington Mutual, or Lehman Brothers? All were high flyers at one point, yet all have since filed for bankruptcy, making them perfect candidates for the downwardly mobile investor. read more

Planning for Your Long-Term Care from Dustin Rinaldi

Planning for Your Long-Term Care from Dustin Rinaldi

According to the U.S. Department of Health and Human Services, 70% of people turning 65 can expect to use some form of long-term care during their lives. But less than one-third of Americans who are 50 or older have begun saving for long-term care.

Long-term care includes a range of personal daily living services. Most long-term care isn’t related to medical care, but rather assistance with daily bathing, dressing, using the toilet or eating. Other types of long-term support include help with housework, managing money, taking medication and shopping.

Many Americans mistakenly believe that Medicare pays for the bulk of long-term care. In fact, Medicare only pays for long-term care if you require skilled services or rehabilitative services, and it will only do so in a nursing home for a maximum of 100 days (the average is 22 days), or at home for a much shorter period.

Long-term care insurance can be expensive, but not having it may endanger your retirement and other savings.

Here are some tips to consider before you buy: read more

Dustin Rinaldi Shares Tips on Surviving Market Turbulence

Dustin Rinaldi Shares Tips on Surviving Market Turbulence

Most stock market investors are looking for the same result: strong and steady gains of their investments.

Dealing with a period of sustained falling stock prices is not easy. All too often, investors react to a sharp drop in prices by panic selling or digging in their heels despite deteriorating fundamentals. But more thoughtful investors see a correction or downturn as an opportunity to review the risks in their portfolios and make adjustments where necessary.

When confronted with any adverse market event — whether it is a one-day blip, a more lengthy market correction (a decline of between 10% to 20%), or a prolonged bear market (a decline of more than 20%) – take time to review your portfolio. Dealing with volatility can be difficult. Here are some suggestions to help you and your portfolio survive market turbulence.

Keep a long-term perspective. The only certainty about the stock market is this: It will always experience ups and downs. That’s why it’s important to keep emotions in check and stay focused on your financial goals. A buy-and-hold strategy — making an investment and then holding on to it despite short-term market moves — can help. The opposite of buy-and-hold investing is market timing — buying and selling investments based on what you think the market will do next. Market timing, as most investment professionals will tell you, is risky. If your predictions are wrong, you could invest when the market is on its way down or sell when it’s on its way up. In other words, you risk locking in a loss or missing the market’s best days. read more