Tax Cuts and Jobs Act: Impact on Individuals

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, a sweeping $1.5 trillion tax-cut package that fundamentally changes the individual and business tax landscape. Some of the major changes included in the legislation that affect individuals are summarized in the link to the document here. These changes create tax planning opportunities. Please consult with your tax adviser to discuss how you can maximize your tax savings.

State of Arizona Charitable Tax Credits

During the holidays and throughout the year, many want to help others in need. Because of the Arizona Charitable Tax Credit, you can donate up to $800 to certain qualified charities and get it right back on your Arizona tax return.

How does it work? You can make a donation to the following: Qualified Charitable Organization, Arizona Military Family Relief Fund, Qualified Foster Care Charitable Organization, Public and Private Schools and School Tuition Organization.

When you file your Arizona taxes, you can claim a dollar-for-dollar Arizona Charitable Tax Credit that will either reduce your tax liability or increase your refund.

Click here for a list of qualified places you can give to for a tax credit.

If you would like to discuss the Arizona Charitable Tax Credit, please give us a call.

It’s Fall – Harvest Time for Tax Losses

by Carma BasingerCarma Basinger

Tax-loss harvesting is selling investments that have lost value to help reduce capital gains tax liability for winning investments.

Every one of us loves to sell a car for more than we paid for it! The same is true for selling stocks or mutual funds when they are sold for more than we paid for them. Unfortunately, the IRS dampens our excitement because they are going to want a piece of the action.

When an asset owned by you for more than a year is sold for a gain, that gain will be taxed at the long-term “capital gains rate” which currently is 15% if you are in the 25% to 35% income tax brackets. A 20% rate applies to capital gains if you are subject to the 39.6% tax rate. (If you are in the 10% or 15% tax bracket, you have a capital gains rate of 0% – lucky you!!) If the asset sold has been owned for less than a year, capital gains rates don’t apply and your tax rate on the gain will be your personal income tax rate.

It’s fall and now is the time to consider the tax consequences of any capital gains or losses realized during this tax year. Harvesting losses in your portfolio can reduce your taxes when used to offset all or part of the realized capital gains. Here’s how it works:

1)  The rules require netting short-term losses against short-term gains and long-term losses against long-term gains. If there are “extra” short-term losses, they can be used against long-term gains.

2)  If you sell an investment for a tax loss and wish to rebuy the same investment, you must wait at least 30 days before rebuying or you will not be able to claim the tax loss. This “wash sale rule” applies if a security is sold at a loss, and if within 30 days before or after this sale a “substantially identical” security is purchased.

3)  If you have realized more losses than gains during the year, you can deduct up to $3,000 of losses from ordinary income. Any additional capital losses will carry forward to future years during your lifetime until all losses are used up.

Please check with your Wealth Manager if you have questions about harvesting tax losses in your portfolio.

Life Insurance

life insurance, retirement planning, financial planningLast year an anonymous billionaire purchased a record-breaking life insurance policy for $201 million.

You may think of life insurance as a back-up plan – a way to make sure your family is provided for in the event of an untimely death. So, why would a billionaire with more than sufficient resources to provide for loved ones buy life insurance?

Actually, life insurance is an important tool for wealth management and estate planning for people of all income levels, and perhaps especially higher net worth individuals (even billionaires).

Here are some important things to think about when evaluating your life insurance needs.


When a person dies it can take a while for the estate or trust to be settled and for significant non-liquid assets to be transferred or sold. In the meantime costs will be incurred. Life insurance can cover the gap.

Tax Planning

Even with effective estate planning there can still be estate taxes that will have to be paid. The larger the estate, the higher the tax burden could be. Often a second-to-die life insurance policy can provide a way to pay these taxes for pennies on the dollar. This type of policy, also known as survivorship insurance, provides benefits to heirs only after the last surviving spouse dies.

Income Replacement

Providing for families and maintaining assets when the main income provider dies is just as important for higher net worth individuals.

Business Planning

Business owners may need special life insurance to provide for business continuity, or funding buy/sell arrangements with surviving partners.

Wealth Transfer

Sometimes an estate is difficult to divide equally among surviving beneficiaries, depending on the nature of the assets. Life insurance can be used to help equalize the inheritance when this is an important consideration.

Creditor Protection

Any loans against properties will be called immediately upon death and will need to be paid off.

Additionally, life insurance may have some tax advantages and can sometimes be sold as an asset. It is important to explore how to set up the policy in a way that minimizes inheritance taxes.

Making sure you have sufficient insurance and the right kind of insurances is an important part of your financial plan. If you would like more information about life insurance or would like to review your current financial plan and insurance please give us a call. We will be happy to answer your questions.

Tax News and IRA Contribution Information

It’s that time of year… tax time!  Many of you are receiving 1099s, corrected 1099s and other tax forms in the mail. Please call us if you need clarification on your investment income and expenses.  We are happy to work with you and directly with your tax preparing CPA! We recommend working with a trusted and qualified CPA professional to help you prepare your tax returns. We’ve asked one of our trusted CPAs, Scott Wrigley, to briefly summarize a few tax news items relevant to you. Please see his comments below.

Tax News

2014 taxes, tax news, tax strategies, tax planningContributed by Scott T. Wrigley, CPA, Partner at Halverson & Company

Much of the news to the 2014 tax filing season is related to the tax extender package passed just before year-end. President Obama signed into law the Tax Increase Prevention Act of 2014 on December 19, 2014. Businesses and individuals are celebrating the one-year extension of many key tax savings items. A few of the more than 50+ extension items for businesses and individuals are as follows:


  • State and Local Sales Tax Deduction
  • Higher Education Deduction
  • Teachers’ Classroom Expense Deduction
  • Mortgage Debt Exclusion
  • Mortgage Insurance Premium Deduction
  • Charitable Distributions from IRAs


  • Bonus Depreciation
  • Code Section 179 Expensing
  • Qualified Leasehold/Retail Improvements, Restaurant Property
  • Research Tax Credit

For more information, Scott Wrigley can be contacted at (480) 386-9710 or

There’s Still Time for IRA Contributions!

Contributed by Jaron D. Carmichael, CPA, PFS, CFP®

You can still make a 2014 contribution to your IRA, ROTH IRA, or both up until the April 15th tax filing deadline. You and your spouse may contribute a total of $5,500 each or $6,500 each if over age 50 and include it in your 2014 tax year.

Traditional IRA

Your ability to deduct the contribution on your return depends on your filing status and income. See the chart below.IRA Contribution Charts


ROTH IRA contributions are made after-tax and are not deductible on your tax return. But earnings and qualifying distributions are tax-free. If married filing jointly with MAGI under $181,000 you can contribute the full amount of $5,500 or $6,500 (age 50+) each. The amount you are eligible to contribute phases out based on your filing status and income as follows:

                          Reduced at:      Ineligible at:

Married Filing Jointly                 $181,000           $191,000

Married Filing Separately          $0                      $10,000

Single or Head of Household   $114,000           $129,000


If you are self-employed, you may be able to make SEP IRA contributions up until your tax filing deadline (including extensions). SEP IRA contributions limits for 2014 are the lesser of:

  1. 25% of compensation, or
  2. $52,000

Please work with your CPA to determine the amount you can contribute to a SEP IRA. Rowland Carmichael would be happy to advise you on the account and how to invest it to best fit your needs.