The election of Donald Trump, in addition to Republican control of the House and Senate, bodes well for significant tax reform during early 2017. For some people, this can present major opportunities for reducing taxes for 2016 by making some key year-end tax planning moves.
Year-end giving allows you to positively impact the greater good by helping charities in need, while reducing your 2016 tax liability. During a new conference call with clients, John O. McManus shares important advice on how to give now to capture the greatest income tax deductions, and he identifies tax-efficient estate planning vehicles to consider for your ongoing philanthropic mission.
“The result of this year’s election makes taking advantage of deductions in 2016 even more urgent and more important,” explained McManus. “Income tax rates will likely go down in 2017, reducing the value of deductions. Because tax deductions are more impactful when tax rates are higher, consider making your charitable gifts for 2017 before the end of 2016.”
McManus & Associates recently reviewed the “Top 10 Year-End Tax Planning Tasks” in light of President-Elect Trump’s pre-election tax platform with clients. Soon after, he had a lengthy conversation with Investment News reporter Greg Iacurci on the topic. Iacurci then put together an informative, engaging slideshow based on the discussion, “8 tax moves to make this year ahead of Trump’s presidency.” From the intro:
President-elect Donald Trump and the Republican-controlled Congress have said tax reform is a high priority next year. Mr. Trump’s agenda includes items such as repealing the estate tax, consolidating income tax rates and lowering the top income tax brackets.
Although there’s no certainty of any concrete reforms occurring next year, financial advisers are betting on legislation next year and telling clients to make certain moves by year-end.
John McManus, estate-planning attorney and founding principal of McManus & Associates, offers some actions to take this year based on Mr. Trump’s current proposals.
In light of Donald Trump’s election and his pre-election platform to reduce marginal income tax rates, there are several planning strategies that should be considered as part of your year-end planning. Today, McManus & Associates Founding Principal John O. McManus held a conference call with clients to discuss the 10 items listed below.
If Republicans were to win a repeal of the so-called death tax, contentious Treasury regulations on business valuation discounts would also disappear, according to Investment News Reporter Greg Iacurci. In a new story, “Estate tax repeal no ‘slam dunk’ under Trump and Republican-held Congress,” Iacurci examines how president-elect Donald Trump will govern and what policies he may or may not be able to push through upon taking office. He writes:
Mr. Trump articulated several tax proposals as a candidate on the Republican ticket, focusing on a repeal of the estate tax, consolidation of income tax rates and lowering the top tax brackets, and standardization of tax rates across businesses.
But even if the death tax is repealed, McManus & Associates Founding Principal John O. McManus brings the estate tax victory into perspective. From the article:
Financial planners and tax payers should keep in mind that the laws around estate taxes come and go, said John O. McManus, founding principal of McManus & Associates.
“Even if the federal estate tax evaporates under Trump, that is never permanent,” he said, pointing out that in 2010 the estate tax exemption was reduced to zero, only to have it set at $1 million for the following year.
Head over to Investment News to read the full story. For trusted advice on tax and estate planning strategies in light of Trump’s intended policies, call McManus & Associates at 908-898-0100.
Presidential candidates Donald Trump and Hillary Clinton presented their tax plans in the first quarter of this year, but both candidates modified their proposals in September. McManus & Associates Founding Principal and AV-rated Attorney John O. McManus offered his thoughts on the impact that each proposal would have on tax planning and wealth management. To hear discussion on the salient points from each of the candidates’ tax plans, click below:
Proposed IRS regulations were recently issued that would eliminate discounting of transfers of family business interests. Valuation discounting is now time-sensitive, as this opportunity is scheduled to be eliminated, possibly by the end of the year.
Partnerships are sophisticated vehicles for unifying family investments, providing for the orderly transfer of assets, delivering asset protection, and maintaining centralizing control. These partnerships are legitimate entities that facilitate the distribution of wealth to family members and the growth of family assets. Partnerships also afford the opportunity for discounts on asset transfer to family members; while discounting is not the number one reason for creating partnerships, the strategy is worth noting.
The Treasury Department has finally issued its dreaded proposed regulations limiting discounted transfers among family members. This means the clock is ticking until the public hearing on December 1, 2016, which will help determine the strategy’s fate. Final regulations can be issued at any time after that date and will become effective 30 days after their issuance.
Wall Street Journal Columnist Veronica Dagher penned a new article this week, “How to Avoid, Detect and Respond to Romance Scams.” The piece provides steps that readers can take to protect themselves (and their parents) from these fraudulent attacks, as well as things to do if the swindling has, unfortunately, already taken place.
As revealed by Dagher, so-called sweetheart scams cost victims nearly $120 million in the first half of 2016, according to the FBI’s Internet Crime Complaint Center. How are these criminals finding success? “The fraudsters are ‘very adept at playing on the vulnerability of human emotions’…With some senior citizens, they are also playing on a lack of tech savvy.”
Dagher buckets the steps to avoid and address these scams, as follows:
1) Check the Connection
2) Check In With Your Parents
3) Check the Pressure
4) Report It
McManus & Associates Founding Principal John O. McManus is cited and quoted in the “Check In With Your Parents” and “Report It” sections. From the article:
“Stay in touch and call your parents often so that they don’t become vulnerable to scammers,” says John McManus, an attorney in New Providence, N.J., who has helped several senior citizens who were victims of fraud…If your parents do fall victim to a scam, show compassion, says Mr. McManus. Help them keep their dignity and understand that anyone can be wrongly manipulated at any age, he says.
McManus & Associates Founding Principal John O. McManus was recently tapped for insight on digital estate planning by MarketWatch (WSJ), which has over 16 million unique visitors per month. Andrea Coombes’ column, “How to include your digital assets in your estate plan,” explores the importance of accounting for one’s online presence – from email and “bank accounts to Facebook, PayPal and more” – when planning for the transfer and administration of assets.
From the article:
If you fail to account for those digital assets in your estate plan, you risk burying your family or friends in red tape as they try to get access to and deal with your online accounts that may have sentimental, practical or monetary value.
John’s comments make up #5 and #6 on the article’s list of tips: