At the end of 2021, our Tax Services department is now collaborating with Mason + Rich, PA a regional tax advisory firm located in Concord, NH. This collaboration is unique because this relationship allows our clients to have the discussions you normally would with your Ledyard Financial Advisor, as well as have access to the knowledge and expertise of the Mason + Rich team. Debra Curtis, our Tax Planning Associate, will continue to be our clients’ contact providing a consistent level of service here at Ledyard - connecting with our clients, gathering documentation and coordinating the reviewing and signing of tax returns with the Mason + Rich team.
The collaboration is going very well, as clients are working with our Financial Advisors and their Mason + Rich tax professional. The Mason + Rich team is providing tax preparation services and available for consultation and planning. The Mason + Rich team consists of 3 licensed, experienced professionals assigned to specifically assist our Financial Advisor clients with all of your tax needs. You can learn more about the team by visiting the Mason + Rich website and our team: Pollyanna S. King, CPA, MST, Adam Pappalardo, CPA, MST, Brian VanBlargen, EA.
As tax season is once again upon us, we thought it would be a good opportunity to take a look at some topics that you should consider discussing with your Mason + Rich accountant and your Financial Advisor, both during the review of your tax return as well as throughout the year.
It’s not too late to potentially reduce your 2021 tax liability. You have until April 18, 2022 to contribute to your Traditional or Roth IRA’s. The maximum IRA contribution for 2021 is $6,000 ($7,000 if you’re age 50 or older). You can split your maximum contribution between a traditional IRA and a Roth IRA (if you qualify to contribute to a Roth).
Impact of Required Minimum Distributions
Once you reach age 72, you are required to take a minimum distribution (RMD) from your IRA. This minimum distribution will have an impact on your tax return as well as affecting other costs (such as Medicare premiums). One way to help minimize the impact of your RMD is by making a Qualified Charitable Distribution (QCD). You can contribute up to $100,000 to most charities directly from your IRA. The amount you contribute will not be considered income on your tax return, even if you do not itemize deductions. You get the benefit of helping a charity while meeting your RMD requirement.
Speaking of gifting, we want to help you to make the most out of your annual gift exclusion of $16,000 per individual (for 2022). Gifting is a fantastic way to pass on some of your assets to future generations, but you’ll want to make sure you’re doing it in the smartest way possible. We can also discuss how your gifting strategy will affect your unified credit and the impact on your assets after your passing. We also know that some of you want to give to your families and watch them enjoy your gift. We can work with you to help you plan for that.
College planning does not stop with your children. Many of you will be helping your grandchildren attend college. Ask us about the best ways to contribute to your children’s (and grandchildren’s) educational goals with the use of 529 Plan Contributions or payments made directly to the college. There are some gifting strategies that can help lower the burden on the college goer and can help maximize your benefit to them. We want to help you accomplish the assistance you want to give to your family members.
If you are looking to sell your business or need to plan on transitioning your business to your successors, then some proactive planning now can save you time, money and headaches in the future. You should utilize our experience to help you structure your business transition to take advantage of all the tax benefits available to you. Some of these considerations include deciding to sell the business entity as a whole or opting to sell the assets of the business or deciding between a cash sale and an installment sale. If your family members will be the ones buying the business, then additional planning will be needed to determine the appropriate discounts to apply to the sales price.
Long-term Care Considerations
We want to know about your plans for your long-term care. This can be anything from using in-home care to entering a continuing care retirement community. These moves can have a significant impact on your tax and financial situation and knowing your plans can help us position you to make the best decisions for you. There are many options available to you for long term care and discussing what you're looking for and where you want to be is a great place to start. Our goal is to help you achieve yours so you can feel confident that you're making the best decision.
If you are interested in learning more about any of the topics listed above, please contact your Financial Advisor and we can connect you with our Mason + Rich accounting team. Together we will look for and discuss ways that would benefit you and your family as well as what makes the most sense for your financial situation.
Brian VanBlargen, EA
Mason + Rich