Last week the House Ways and Means Committee released a draft of Biden’s proposed tax legislation.  Acumen’s team is diligently staying focused as changes occur to advise our clients.  None of these changes have yet to become law, but we anticipate major changes on the horizon.  We would like to share a few key highlights from the potential legislation: 

Individual Tax

Retirement Planning

Business Tax

Estate Tax

The opinions expressed in this commentary should not be considered as fact. All opinions expressed are as of the published date and are subject to change. Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investments in securities involves risk, would fluctuate in price, and may result in losses. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.   It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Many of you may be contemplating your needs and options for LTC insurance. This can be a complicated analysis, dependent upon an individual’s age, health, financial circumstances, wealth transfer goals, and general philosophy. You may struggle and be reluctant to weigh the risks and benefits, and to assess the potential value of LTC coverage.

We have added this checklist to help guide you through covering key issues to consider prior to purchasing LTC coverage, including:

You may find this checklist on Acumen’s Resources page here: What Issues Should I Consider when Purchasing Long-Term Care Insurance?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

A pay stub is a valuable source of information when building financial models and evaluating cash flow. It provides insight into income, tax, retirement savings, various insurance costs, etc.

A periodic paycheck review can be a productive exercise, demonstrating how your earnings translate into net pay. As you guide a client through their pay stub, you can help them to understand the automated tax withholdings, savings, and payments that they make each pay period, and appreciate any employer benefits that augment their compensation package.

This flowchart helps you lead through a series of considerations when reviewing your paycheck. It covers:

You may find this flowchart on Acumen’s Resources page: Pay Stub Review 2021

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

Start your journey

IMPORTANT DISCLOSURE INFORMATION
This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.

Report Not a Solicitation
This report is not a solicitation or recommendation to make changes to your tax withholdings. Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

This checklist can help guide your conversations regarding the highlights of President Biden’s tax plan. Please take a look at this and the companion piece “As A High-Income Taxpayer, How Might President Biden’s Tax Plan Affect Me?” and consider how these resources may be of use to you. You may find this checklist on Acumen’s Resources page: How Might President Biden’s Tax Plan Affect Me?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

Start your journey

This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. This information is hypothetical in nature as no tax plan has been finalized as of publication. The final tax plan could vary.

Report Not a Solicitation
Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice
specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may
be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

President Biden’s administration has outlined a tax policy built upon the agenda introduced during his campaign. Biden’s tax plan focuses on raising taxes on corporations and affluent households, while increasing credits for moderate- to lower-income households. With Democratic control of Congress, changes outlined in President Biden’s tax plan have an increased possibility of becoming a reality. At what time, in what form, and to what extent remains to be seen; however, another round of tax law changes is likely on the horizon.

Having adapted to frequent, and sometimes major, legislative changes in recent years (namely the TCJA, the SECURE Act, the CARES Act, and most recently, the American Rescue Plan Act), you may be understandably concerned about what changes could be imminent. High-income households, in particular, have been targeted for tax increases under Biden’s tax plan.  By familiarizing yourself with President Biden’s tax plan now, you can be positioned to take action and seize planning opportunities when changes are implemented.

Take a look at this checklist to help guide you through conversations regarding the highlights of President Biden’s tax plan, along with the companion piece “How Might President Biden’s Tax Plan Affect Me?”.

You may find this flowchart on Acumen’s Resources page: As a High-Income Taxpayer, How Might President Biden’s Tax Plan Affect Me?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

Start your journey

This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. This information is hypothetical in nature as no tax plan has been finalized as of publication. The final tax plan could vary.

Report Not a Solicitation
Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Income tax planning is critical to solid financial planning. Navigating our complicated federal pay-as-you go income tax system can be difficult. Adding further complexity, you must understand and adapt to changes in tax laws and in your personal circumstances. In each tax year, it is important to ensure you are properly paying your federal income tax liability in order to avoid penalties. Frequently, you may need to make estimated payments to avoid penalties for late payments and/or underpayments.

We have a flowchart to help you guide through an estimated payments analysis. The decision points identify factors that may trigger a need to make or increase estimated payments, including:

You may find this flowchart on Acumen’s Resources page: Do I Need to Start Making Estimated Federal Income Tax Payments for 2021?

If you’d like to discuss your personal situation and learn more about how Acumen can help you Invest Intentionally®, please contact us.

This report is provided as a courtesy for informational purposes only. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.

Report Not a Solicitation
Do not act or rely upon the information in this publication without seeking the services of competent and professional legal, tax, or account counsel.

Report Does Not Provide Legal, Tax, or Accounting Advice
This report does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice specific to your situation.

For More Information
You should seek the services of your legal and/or tax advisors when making financial decisions. It is also recommended that you visit the IRS website at www.irs.gov for additional information.

Acumen Wealth Advisors, LLC® is a Registered Investment Advisor. Advisory service are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licenses or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

Schedule a Meeting

Our mission is to help you and your family Invest Intentionally®.
Contact us today to start your journey.

Start your journey

The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 11, 2021. This $1.9 trillion stimulus bill aims to provide additional economic relief to taxpayers, businesses, and other employers through various provisions including a third round of direct payments to eligible individuals, an expansion of the Child Tax Credit, additional funding for the Paycheck Protection Program (PPP), and many more. Approximately, $850 billion is directed towards individuals and $65 billion is directed to businesses. Key provisions we find to be relevant for individuals, businesses, and other employers include $1,400 direct payments.

Direct Payments

ARPA provides a third round of stimulus payments up to $1,400 for individuals ($2,800 for taxpayers filing jointly) and qualifying dependents (as defined in Sec. 152). Eligibility for this recovery rebate credit is based on 2020 or 2019 Adjusted Gross Income and the limits are as follows:

Filing StatusEligible for Full PaymentIncome Phaseout BeginsNot Eligible
SingleLess than $75,000$75,000Greater than $80,000
Married Filing JointlyLess than $150,000$150,000Greater than $150,000
Head of HouseholdLess Than $112,500$112,500Greater than $112,500

Child Tax Credit

For 2021, ARPA expanded the Child Tax Credit amount to $3,600 for children under 6 and $3,000 for children 6 – 17. The standard Child Tax Credit amount and phaseout amounts still apply but this additional tax credit is available to those whose Modified Adjusted Gross Income (MAGI) are as follows:

Standard Child Tax Credit:

Filing StatusMAGI ThresholdReductions
Single or Head of Household< $200,000This credit is reduced by $50 for each $1,000 of income over these limits.
Married Filing Jointly< $400,000

Additional Child Tax Credit through ARPA:

Filing StatusMAGI ThresholdReductions
Single$75,000This expanded portion of the credit ($1,000/$1,600) is reduced by $50 for every $1,000 of income over these limits.
Married Filing Jointly$150,000
Head of Household$112,500

This additional credit is fully refundable meaning, if eligible, no tax liability is necessary for the full refund amount. Advanced payments for this 2021 credit will be distributed from July 2021 through December 2021 and will be based on the most recently filed tax return unless eligible individuals opt-out of advance payments through a soon-to-be established IRS online portal.

Earned Income Tax Credit

For 2021, the applicable minimum age is decreased from 25 to, in most cases, age 19. Special conditions apply to students and other youth. The maximum age a childless taxpayer can qualify is eliminated and the maximum EIC amount for childless households increases from $540 to $1,502.

Child and Dependent Care Tax Credit

ARPA increases and expands the Child and Dependent Care Tax Credit from $3,000 for one qualifying individual or $6,000 for more than one qualifying individual to $8,000 for one qualifying individual and $16,000 for more than one individual child. If AGI is less than $125,000, the credit is 50% of the expense amount; this credit phases out completely for AGI over $440,000. This credit essentially means the maximum credit is $4,000 for one qualifying individual and $8,000 for more than one qualifying individual. This credit is fully refundable.

Unemployment Benefits

ARPA increases the total number of weeks benefits are available to individuals who cannot return to work safely from 50 to 79 weeks. Supplemental unemployment payments will remain at $300 per week after March 15, 2021 until September 6, 2021. For those who claimed unemployment benefits in 2020, up to $10,2000 of unemployment benefits can be excluded from income for those with AGIs less than $150,000.  For married couples filing jointly who both received unemployment in 2020, each spouse can exclude up to $10,200.

Student Loan Discharge Taxability

Qualifying student loan debt forgiven between December 31, 2020 and January 1, 2026 will not be taxable as income.

Expanded PPP Eligibility and Funding

ARPA provides additional funding for eligible businesses under the Paycheck Protection Program as well as expands eligibility to additional nonprofits and digital news services. Applications are due by May 31, 2021.

Employee Retention Credit and Paid Leave Credit Programs

The American Rescue Plan extends the availability of the Employee Retention Credit for small businesses through December 2021 and allows businesses to offset their current payroll tax liabilities by up to $7,000 per employee per quarter. This credit of up to $28,000 per employee for 2021 is available to small businesses who have seen their revenues decline, or even been temporarily shuttered, due to COVID.

The American Rescue Plan also extends the availability of Paid Leave Credits through September 2021 for small and midsize businesses offering paid leave to employees who may take leave due to illness, quarantine, or caregiving. Businesses can take dollar-for-dollar tax credits equal to wages of up to $5,000 if they offer paid leave to employees who are sick or quarantining. More details are provided in IRS Notice 2021-20: https://www.irs.gov/pub/irs-drop/n-21-20.pdf

Targeted Grants

Additional funding for targeted Economic Injury Disaster Loan grants is available for small businesses in low-income communities as well as targeted grants for restaurants, bars, lounges, and food trucks.

Excess Business Loss Limitation

ARPA extends the excess business loss rule (Code Section 461(I)) through 2026 which limits the deduction for excess business losses for noncorporate taxpayers. This provision was enacted under the Tax Cuts and Jobs Act of 2017 and originally was set to end at the end of 2025. Section 461(I) limits up to $250,000 for individual filers and $500,000 for joint filers but the CARES Act removed these limitations for the 2018-2020 tax years.

To learn more about how Acumen can help you Invest Intentionally®, please contact us.

Sources:

https://www.congress.gov/bill/117th-congress/house-bill/1319/text#toc-H5A2CF32D1697421DA46ACD1A7E094453

https://home.treasury.gov/news/featured-stories/fact-sheet-the-american-rescue-plan-will-deliver-immediate-economic-relief-to-families

https://www.journalofaccountancy.com/news/2021/mar/tax-components-coronavirus-relief-bill.html

https://www.natlawreview.com/article/american-rescue-plan-act-2021-tax-reports

https://www.jdsupra.com/legalnews/the-most-important-items-in-the-1-9t-4232245/

This report is provided as a courtesy for informational purposes only and nothing herein constitutes investment, legal, accounting, or tax advice. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.   It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

As 2020 comes to an end, we look forward to what 2021 will bring.  We hope more happiness, less uncertainty, stronger relationships, and more time together will take place.  With only a few weeks left in 2020, we would like to remind you there are some steps you can take to make the most of this year financially.

Gifting to Family Members

Gifting to Charity

Tax

These are just a few examples when it comes to planning strategies.  The planning team at Acumen is here to help if you have any questions.  Please remember that due to increased processing times, we need to execute any strategies well before year end to ensure they are processed in time. Smart financial decisions year after year help increase the probability of financial success.  As Warren Buffett says, “The more you learn, the more you earn.”

Thank you for working with us and stay safe!

To learn more about how Acumen can help you Invest Intentionally®, please contact us.

Sources:

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice.  Any opinions expressed in this commentary should not be considered as fact.  All opinions expressed are as of the published date and are subject to change.  Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities.  Investments in securities involves risk, will fluctuate in price, and may result in losses.  The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.  It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.  Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.  Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel.  Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser.  Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure.  Past performance is no guarantee of future returns.  Investing involves risk and possible loss of principal capital.  No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.

We are proud to announce Jerome You was recently awarded the Certified Trust & Financial Advisor (CTFA) professional certification from the American Bankers Association.

The CTFA certification is awarded to individuals who demonstrate excellence in the field of wealth management and trust. To qualify for the CTFA certification, individuals must have certain levels of experience and education in the trust profession, pass an exam, and agree to abide by a code of ethics. The CTFA exam covers many areas including fiduciary and trust activities, financial planning, tax law and planning, investment management and ethics.

Jerome is a Financial Planner and has been with Acumen Wealth Advisors for nearly five years.  He is responsible for assembling financial plans and creating projections based upon a client’s historic data, present financial standing, and future financial goals.  Jerome works alongside Acumen’s CFP® in discussing investment strategies, estate planning considerations, risk management protection through insurance, tax efficiency strategies, charitable intent, and retirement accumulation and distribution tactics.  Jerome is active in the community and is proud to serve on the Northside Neighborhood House (NNH) Board which promotes the independence of residents in North Chattanooga by providing education and assistance through various programs.

Financial services professionals, working through ABA, initiated the CTFA certification and seven others in order to establish meaningful standards of knowledge in specialty areas of the financial services industry. ABA Professional Certifications formally recognize those who meet these standards and meet professional continuing education and development requirements.

ABA Professional Certifications promote the highest standards of performance in the financial services industry by validating individuals’ knowledge and expertise. To learn more, visit www.aba.com/certifications.

To learn more about how Acumen can help you Invest Intentionally®, please contact us.

With the presidential election only 27 days away, our team at Acumen has been researching a variety of topics relating to the potential impacts of the election and we are sharing this information with you in a three-part series called “The Election Effect.”  In today’s second installment, we explore the tax plans of the presidential candidates.  We hope you find this information interesting and welcome your thoughts on the series.

The Election Effect: Part 2 of 3

Tax Plans of the Presidential Candidates

The November election is drawing closer and with all of the news coverage surrounding this event, the tax plan of each candidate seems to have been put on the back burner by political pundits and voters alike despite tax reform being one of the most influential and pivotal platforms.  Any change in tax policy has the potential to create immediate, mid-term, or long-term effects on fiscal policy, the economy, and the markets.  The Tax Cuts and Jobs Act of 2017 (TCJA) was the most sweeping reform to the tax code made in the past 30 years but is scheduled to expire after 2025 and revert back to pre-2017 policies unless the changes are made permanent.  Although the specific details and policies regarding the candidates’ respective tax plans change, there are broad concepts and motives that differentiate the candidates.  The Republican candidate, Donald Trump, aims to make the TCJA changes permanent while the Democratic candidate, Joseph Biden, would most likely advocate for an increase in taxes for high income individuals and corporations.  What we believe is, no matter the result of the election, tax policy will remain the same for 2020.  If there is a change in control, we believe there may be a short window to implement certain strategies.  For this reason, Acumen is ensuring we have a plan in place to execute quickly, if needed.  Please keep in mind everyone’s tax situation differs, and the possible strategies outlined below are general strategies and should not be considered as an individualized recommendation or investment advice.

Although the result of the November and the Congressional elections will ultimately dictate what changes to tax laws will be made, Acumen Wealth Advisors’ Financial Planners are diligently keeping track of the proposed changes as well as formulating strategies to mitigate increased tax liability which may be produced as a result.  Please feel free to reach out with any questions.

To learn more about how Acumen can help you Invest Intentionally®, please contact us.

 

Sources:

https://www.cnr.com/insights/article/tax-plan-proposal.html

https://www.cpapracticeadvisor.com/tax-compliance/news/21152588/election-2020-comparing-the-biden-and-trump-tax-plans

https://www.accountingtoday.com/list/election-2020-trump-vs-biden-on-tax-policy

https://aboutbtax.com/R7C

The opinions expressed in this commentary should not be considered as fact.  All opinions expressed are as of the published date and are subject to change.  Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities.  Investments in securities involves risk, will fluctuate in price, and may result in losses.  The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness.  It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.  Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.  Diversification does not protect against loss of principal.

Acumen Wealth Advisors, LLC® is a Registered Investment Adviser.  Advisory services are only offered to clients or prospective clients where Acumen Wealth Advisors, LLC® and its representatives are properly licensed or exempt from licensure.  Past performance is no guarantee of future returns.  Investing involves risk and possible loss of principal capital.  No advice may be rendered by Acumen Wealth Advisors, LLC® unless a client service agreement is in place.