Year-End Tax Strategies: Making the Most of the One Big Beautiful Bill

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The end of 2025 is racing toward us,

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and we are facing year-end tax strategies.

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How to plan for year-end, especially in

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a year with the One Big Beautiful Bill

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Act.

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Lots to think about on this week's Something

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More with Chris Boyd.

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Welcome to Something More with Chris Boyd.

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Chris Boyd is a certified financial planner, practitioner,

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and senior vice president and financial advisor at

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Wealth Enhancement Group, one of the nation's largest

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registered investment advisors.

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We call it Something More because we'd like

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to talk not only about those important dollar

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and cents issues, but also the quality of

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life issues that make the money matters matter.

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Here he is, your fulfillment facilitator, your partner

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in prosperity, advising clients on Cape Cod and

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across the country.

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Here's your host, Jay Christopher Boyd.

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Welcome, everybody.

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Thanks for being with us for another episode

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of Something More with Chris Boyd.

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And you can find us not only on

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Spotify and Apple or wherever you like to

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listen to your podcasts, but also on YouTube

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and hope you follow us on all of

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these, one of these channels that you might

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enjoy keeping up with each show.

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Glad to have you guys with us.

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I'm joined today by Jeff Perry, as usual,

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and Russ Ball, all of us from the

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AMR team at Wealth Enhancement.

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And today we will be talking a little

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bit about year-end tax strategies.

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Before we do, it's crazy how fast we've

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jumped into the holiday season.

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And have you begun?

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Have you finished your shopping or are you

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in the mode?

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I was playing Christmas music in the office

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this morning and feeling kind of- Yes,

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I was.

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Have you started shopping, Chris?

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I did a little, yeah.

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Yeah, me too.

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Not done, but- Good chunk.

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Yeah.

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I mean, honestly, Kristen does most of our

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shopping.

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She's so good, like plans ahead.

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I've done a couple of things here and

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there and been with her while she did

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some of that.

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I think you witnessed shopping.

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Yeah, I was participating, but I wasn't always

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the lead on that.

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I always do some good shopping on Black

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Friday or over that weekend.

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Yeah, some good deals.

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Got a few ahead of time, but I'm

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still a few more to do.

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Yep.

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And Christmas music, Christmas movie.

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What's your favorite holiday movie?

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Jeff, give me that.

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Yeah, I'm old school on that.

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Is it Wonderful Life?

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I'm going to be stereotypical here.

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Who doesn't love George Bailey and his-

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Lisa was just saying, last night, I think

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it was, when are we going to watch

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it?

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Because it's- Yeah.

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Just kind of it's tradition too.

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You feel like the first half better than

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the second half, right?

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Well, it's all good.

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Whenever it goes to hell for them.

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Yeah, I know.

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Not literally, but- No.

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And when my son and granddaughter here, all

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the way back to when my son was

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small, on Christmas day, we watch a Christmas

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story.

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Ah, nice.

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Yeah.

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The one with the lamp and the turkey

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and yeah.

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Yeah.

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Yeah.

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What's the present that he wants?

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He wants a BB gun.

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A BB gun, right.

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And he gets it.

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Literally and figuratively.

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They made a sequel to that one within

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the last few years.

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It wasn't very good.

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Okay.

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Yeah.

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A favorite holiday movie?

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You know what?

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We always watch the Santa Claus with Tim

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Allen.

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That was the one we watched when we

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were kids.

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Picturing a home alone response from you, actually.

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Why?

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Just because it's a classic?

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Generationally, I thought maybe.

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I do love Home Alone, but for our

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house, it was always the Santa Claus.

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And we just thought it was hilarious.

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And we still watch it every couple of

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years or so.

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Just to, you know, get a Christmas spirit.

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Love it.

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Love it.

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There's so many good ones.

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Do you consider Die Hard a Christmas movie?

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Love Actually is one of those ones.

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I think this time of year- I'm

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not going to argue with people about it,

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but no.

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It's not the Christmas feel, but it definitely

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takes place in the Christmas season.

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Yeah.

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Well, anyway, I hope everyone is enjoying the

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holiday season.

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I think it's a time to- We

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get caught up in all the busy hustle

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bustle.

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And I do think I enjoy all the

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music and movies and some of this.

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But it's ultimately about sort of- The

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thing I like about it is where you

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kind of have some time with family.

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You have some holiday gatherings.

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A time to step back and remember your

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values, your priorities.

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And of course, a season of giving to

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others.

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And we talked about that not long ago

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with the Giving Tuesday and all of the

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charitable giving theme.

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But that's another element of this is trying

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to be there for others who may need

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some assistance.

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So in any case, we're going to talk

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about tax planning today to jump right in.

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And I- Tough transition.

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Huh?

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That's a tough transition.

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Yeah, I guess it's not as- But

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I just figured we'd talk just for a

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minute or two, get the fun holiday stuff

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going, right?

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Well, it isn't that tough in that the

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end of the year is really fast approaching.

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And today, this will be out on the

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12th of December.

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That does not leave us a lot of

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time before year end.

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So if you're thinking about things you need

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to do before year end, one of those

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for some people is thinking about their charitable

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giving if they're trying to get some deductions.

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This year could be relevant for people who

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are in higher income tax brackets to entertain

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doing some- If they're doing some significant

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charitable giving, you might want to do that

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this year more than next year, because there

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will be more restrictions, more limitations on the

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benefits you derive from that charitable giving.

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And of course, people generally give not because

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of their tax benefits, but it's nice to

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get the benefit if you can plan for

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it.

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Sure.

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So that's something to be mindful of.

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Where do you want to begin?

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I saw an interesting article I'll just mention

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in passing.

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In addition to something that we found from

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an email I received, there was a Barron's

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article this last weekend talking about the new

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tax law and how it can help seniors

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think in terms of their planning.

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So that's part of this.

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And maybe we can dive through a few

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of those items.

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But Jeff, do you have something you want

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to start with?

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Generally speaking, even some of the economists are

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talking about people are going to- not

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all people, so don't be mad at me

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if this isn't you.

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Many people will be getting a bigger return

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or less tax impact if they just did

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the same thing that they did last year

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because of the one big, beautiful bill.

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And that especially applies to seniors and those

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people who work in the service industry.

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There's some nice advantages for people.

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And the idea, I guess, is when people

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get these refunds, it's stimulative to the economy.

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And therefore, the Fed even mentioned it in

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their comments this week when they dropped a

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quarter point, that the GDP, they expect a

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higher GDP than they had thought before.

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And one of the reasons was stimulus because

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of the one big, beautiful bill.

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Yeah, yeah.

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So we'll see.

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I don't know if it's going to help

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me at all, but we'll see.

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That's what it ultimately comes down to, isn't

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it?

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Isn't it?

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Yeah.

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That's true, right?

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Everybody does, right?

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Well, I would say a couple of things.

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I'll hit on a couple of things from

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this Barron's article, and then we can tie

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in some of the other things that we

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had from this bigger article that had all

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kinds of great suggestions for thinking about year

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end.

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One of those things is, particularly if you're

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a retiree, maybe even before full, what is

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it called?

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The RMD age, you know, 73 and older.

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You might want to draw some of your

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IRA funds out sooner than you might be

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required to, because you now have this window

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for a few years where you have clearly

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some beneficial tax treatment.

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When you think about some terms of the

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one big, beautiful bill are temporary and may

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not be extended.

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So you have some immediate opportunities to benefit

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and it might be attractive to you to

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plan where you fall in your, you know,

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fill your bracket, so to speak.

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Or maybe even if you see how things

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forecast when you have RMDs, if that's going

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to push you into higher and higher brackets,

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maybe it's worth thinking about filling in some

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of that bracket sooner so it prevents you

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from going pushed into higher brackets later.

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So that's one possibility.

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That's something that, you know, you talk to

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clients about that and they almost default to

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no, because I don't want to pay taxes

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now.

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I don't have to pay taxes.

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I don't need the money.

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But it could be, you know, instead of

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saying no, listen, and because it could be

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very tactical to do this and you could

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save money over the long term.

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Doesn't mean you have to spend the money.

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No, exactly.

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But if you can see that your tax

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rate is going to be higher why not

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choose to pay at a lower rate?

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You know, that's the bottom.

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That's really what it comes down to.

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You can opt to pay it cheaper.

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Right now taxes are on sale.

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Right.

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So you can get a little discount by

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paying some of these taxes sooner than later

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and be mindful of those brackets where you

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fall.

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And one more comment.

279
00:10:15,170 --> 00:10:18,610
It's magnified because they've extended the age of

280
00:10:18,610 --> 00:10:19,470
the RMDs.

281
00:10:19,470 --> 00:10:23,030
So, you know, we used to start, you

282
00:10:23,030 --> 00:10:26,510
know, at 60, 70, 72.

283
00:10:26,630 --> 00:10:27,350
Seven and a half.

284
00:10:27,590 --> 00:10:27,730
Right.

285
00:10:28,350 --> 00:10:30,150
72, then 73.

286
00:10:30,510 --> 00:10:32,130
And then maybe 75, right?

287
00:10:32,410 --> 00:10:33,470
Yeah, for some people it's going to be

288
00:10:33,470 --> 00:10:34,010
75.

289
00:10:34,330 --> 00:10:35,190
All that delay.

290
00:10:35,290 --> 00:10:36,910
You think, oh, I'm saving money on taxes.

291
00:10:37,010 --> 00:10:38,390
Actually, you're going to pile it up.

292
00:10:39,810 --> 00:10:40,710
All at once.

293
00:10:41,050 --> 00:10:41,210
Yeah.

294
00:10:41,550 --> 00:10:42,990
That's why you might be in a higher

295
00:10:42,990 --> 00:10:45,850
tax bracket than you would have traditionally been.

296
00:10:45,930 --> 00:10:48,490
So I think that's the underlying point here.

297
00:10:48,490 --> 00:10:52,750
You can save money, save taxes, rather than

298
00:10:52,750 --> 00:10:55,350
waiting and piling it all up at 75

299
00:10:55,350 --> 00:10:55,850
and after.

300
00:10:56,030 --> 00:10:58,370
If you're my age, for example, it might

301
00:10:58,370 --> 00:10:59,730
be prudent to take some now.

302
00:11:00,150 --> 00:11:01,270
So pay attention.

303
00:11:01,750 --> 00:11:04,170
Next thing is, we talked about this, I

304
00:11:04,170 --> 00:11:05,870
think, way too much.

305
00:11:06,010 --> 00:11:07,490
So I'm going to just skip over real

306
00:11:07,490 --> 00:11:07,830
quickly.

307
00:11:08,070 --> 00:11:10,090
But qualified charitable distributions.

308
00:11:10,090 --> 00:11:11,910
If you're 70 and a half or older

309
00:11:11,910 --> 00:11:15,390
and you have distributions you have to take

310
00:11:15,390 --> 00:11:18,710
or would want to provide some money for

311
00:11:18,710 --> 00:11:20,950
charity, use your IRA money as a way

312
00:11:20,950 --> 00:11:21,430
to do that.

313
00:11:21,530 --> 00:11:23,310
It's money that's pre-tax.

314
00:11:23,530 --> 00:11:26,410
It goes to the charity without tax.

315
00:11:27,870 --> 00:11:30,830
And if you have an RMD, it can

316
00:11:30,830 --> 00:11:34,690
reduce what you have to take, which can

317
00:11:34,690 --> 00:11:37,930
help your income tax burdens as well.

318
00:11:38,370 --> 00:11:40,110
You don't get a deduction for that, but

319
00:11:40,110 --> 00:11:42,330
you do get the benefit of that money

320
00:11:42,330 --> 00:11:45,890
not having to be taken as an RMD

321
00:11:45,890 --> 00:11:49,610
or ultimately it's going tax-free to the

322
00:11:49,610 --> 00:11:50,510
charitable entity.

323
00:11:51,170 --> 00:11:52,190
So that's kind of a win.

324
00:11:54,430 --> 00:11:57,770
Let's talk about this $6,000 senior deduction

325
00:11:57,770 --> 00:11:58,230
thing.

326
00:11:59,850 --> 00:12:02,050
Got any insights as to how this all

327
00:12:02,050 --> 00:12:02,290
works?

328
00:12:02,370 --> 00:12:02,950
Who gets this?

329
00:12:03,190 --> 00:12:05,770
This was that whole thing where they wanted

330
00:12:05,770 --> 00:12:08,910
to give Social Security tax-free, but couldn't

331
00:12:08,910 --> 00:12:10,750
quite figure out how to do it without

332
00:12:10,750 --> 00:12:14,370
changing the Social Security law, which wasn't going

333
00:12:14,370 --> 00:12:15,710
to be something that everyone was going to

334
00:12:15,710 --> 00:12:17,330
deal with at this time.

335
00:12:17,410 --> 00:12:19,390
So they came up with this alternative approach,

336
00:12:19,470 --> 00:12:19,630
right?

337
00:12:19,870 --> 00:12:20,090
Yeah.

338
00:12:20,250 --> 00:12:21,610
You know, they're still saying it too.

339
00:12:22,710 --> 00:12:24,030
Calling it Social Security?

340
00:12:24,290 --> 00:12:26,110
No tax on Social Security, no tax on

341
00:12:26,110 --> 00:12:28,590
TIPS, which isn't really true.

342
00:12:28,950 --> 00:12:32,530
But so 65 and above under certain income

343
00:12:32,530 --> 00:12:36,850
limits, you get a $6,000 credit.

344
00:12:37,810 --> 00:12:39,150
So that's pretty cool.

345
00:12:39,250 --> 00:12:43,610
I mean, $6,000 per person deduction.

346
00:12:44,210 --> 00:12:44,310
Yeah.

347
00:12:44,490 --> 00:12:46,210
So that could be $12,000 for a

348
00:12:46,210 --> 00:12:46,490
couple.

349
00:12:47,210 --> 00:12:48,650
What are those limits?

350
00:12:48,810 --> 00:12:50,690
Anybody remember what it's like somewhere?

351
00:12:52,610 --> 00:12:54,410
And by the way, this is only temporary.

352
00:12:54,890 --> 00:12:58,690
This current part of the law is due

353
00:12:58,690 --> 00:13:01,730
to expire after 2028.

354
00:13:02,590 --> 00:13:04,530
So, you know, you get it for a

355
00:13:04,530 --> 00:13:06,310
few years, but at some point it goes

356
00:13:06,310 --> 00:13:06,750
away.

357
00:13:09,070 --> 00:13:15,130
Let's see, this says only for four years,

358
00:13:15,230 --> 00:13:18,090
a couple could realize over $300,000 in

359
00:13:18,090 --> 00:13:21,570
capital gains and get 0% federal tax.

360
00:13:22,650 --> 00:13:23,990
That's amazing.

361
00:13:25,990 --> 00:13:29,950
Well, back to the $6,000, you're looking

362
00:13:29,950 --> 00:13:32,030
at a modified adjusted gross income.

363
00:13:32,170 --> 00:13:32,830
Yeah, yeah.

364
00:13:32,830 --> 00:13:37,470
And for a full deduction limit is a

365
00:13:37,470 --> 00:13:38,010
phase out.

366
00:13:38,330 --> 00:13:41,650
Full deduction limit is $150,000 for a

367
00:13:41,650 --> 00:13:44,650
couple married and single with 75 or less.

368
00:13:44,870 --> 00:13:48,190
And it basically goes up $100,000 for

369
00:13:48,190 --> 00:13:49,430
that phase out.

370
00:13:49,550 --> 00:13:51,510
So if you're between $150,000 and $250

371
00:13:51,510 --> 00:13:54,550
,000 or $75,000 and $175,000, it's

372
00:13:54,550 --> 00:13:55,110
a phase out.

373
00:13:55,250 --> 00:13:56,630
So you have to see where you fall.

374
00:13:57,210 --> 00:13:58,430
But those limits aren't too bad.

375
00:13:58,430 --> 00:14:00,630
A lot of people who are 65 and

376
00:14:00,630 --> 00:14:04,070
over, as far as having adjusted gross income

377
00:14:04,070 --> 00:14:05,950
of a couple $150,000 or a single

378
00:14:05,950 --> 00:14:07,950
person $75,000, that will capture a lot

379
00:14:07,950 --> 00:14:08,330
of people.

380
00:14:10,030 --> 00:14:11,190
Yeah, that's a big deal.

381
00:14:11,890 --> 00:14:12,830
So that's pretty good.

382
00:14:12,950 --> 00:14:17,670
Now, one of the other big parts of

383
00:14:17,670 --> 00:14:20,570
the legislation that maybe we want to spend

384
00:14:20,570 --> 00:14:23,650
a few minutes on was that SALT deduction,

385
00:14:24,270 --> 00:14:25,950
state and local tax.

386
00:14:25,950 --> 00:14:29,710
So if you pay property taxes for one

387
00:14:29,710 --> 00:14:33,610
home, maybe even two homes, you have, instead

388
00:14:33,610 --> 00:14:37,650
of a cap at $10,000 being counted

389
00:14:37,650 --> 00:14:41,030
as a deduction, it can be as much

390
00:14:41,030 --> 00:14:43,030
as $40,000 now.

391
00:14:43,610 --> 00:14:46,110
And that is not a temporary part of

392
00:14:46,110 --> 00:14:46,790
the law, correct?

393
00:14:46,930 --> 00:14:49,750
That is going to stick around longer than

394
00:14:49,750 --> 00:14:50,490
the four years.

395
00:14:50,690 --> 00:14:52,770
I think we're correct on that.

396
00:14:53,350 --> 00:14:54,010
All right.

397
00:14:54,010 --> 00:14:56,270
I want to say it does go down.

398
00:14:56,650 --> 00:14:57,450
Oh, is that right?

399
00:14:57,550 --> 00:14:58,410
That's temporary, too?

400
00:14:58,450 --> 00:14:59,790
I believe that is temporary.

401
00:14:59,910 --> 00:15:00,770
Oh, my goodness.

402
00:15:01,790 --> 00:15:03,550
Where's the permanent part of this?

403
00:15:03,650 --> 00:15:05,490
Yeah, it's 20, 30.

404
00:15:06,090 --> 00:15:07,930
The deduction is set to revert to a

405
00:15:07,930 --> 00:15:08,930
flat $10,000.

406
00:15:09,150 --> 00:15:09,550
Okay.

407
00:15:10,190 --> 00:15:11,470
So it goes back to what it had

408
00:15:11,470 --> 00:15:12,610
been, which is the $10,000.

409
00:15:14,310 --> 00:15:17,130
So definitely, we're in a window here where

410
00:15:17,130 --> 00:15:18,490
- These are among the things.

411
00:15:18,570 --> 00:15:20,170
You got the benefits, might as well take

412
00:15:20,170 --> 00:15:20,310
it.

413
00:15:20,750 --> 00:15:21,150
Right.

414
00:15:21,510 --> 00:15:22,850
The income limits are much higher.

415
00:15:22,850 --> 00:15:26,870
They're half a million dollars for the phase

416
00:15:26,870 --> 00:15:29,330
-out starts for a married couple.

417
00:15:29,710 --> 00:15:30,850
How does that work?

418
00:15:32,090 --> 00:15:34,050
They're higher income thresholds?

419
00:15:34,650 --> 00:15:35,930
Yes, $500,000.

420
00:15:36,610 --> 00:15:38,790
And then up to $600,000 before it

421
00:15:38,790 --> 00:15:41,030
phases out to get back to the $10

422
00:15:41,030 --> 00:15:42,130
,000 number.

423
00:15:43,230 --> 00:15:43,330
Yep.

424
00:15:43,470 --> 00:15:43,970
All right, good.

425
00:15:44,150 --> 00:15:48,930
So that being said, these are two of

426
00:15:48,930 --> 00:15:49,670
the big ones.

427
00:15:49,670 --> 00:15:53,030
Just some regular ordinary housekeeping stuff is that

428
00:15:53,030 --> 00:15:54,950
tax loss harvesting, right?

429
00:15:55,050 --> 00:15:57,190
This time of year, as you're thinking about

430
00:15:57,190 --> 00:16:03,470
year-end, we tend to think of gains

431
00:16:03,470 --> 00:16:05,310
as good and losses as bad.

432
00:16:05,490 --> 00:16:07,250
And naturally, that's the reality.

433
00:16:07,390 --> 00:16:08,570
We don't want to lose money.

434
00:16:08,790 --> 00:16:11,450
But there are times when we can have

435
00:16:11,450 --> 00:16:14,790
a consolation prize and a tax loss.

436
00:16:15,330 --> 00:16:17,990
If we have a holding that's gone down,

437
00:16:18,170 --> 00:16:20,970
if we realize that loss, we can use

438
00:16:20,970 --> 00:16:24,130
it to offset gains and prevent tax.

439
00:16:25,190 --> 00:16:29,350
And maybe replace one position that's gone down

440
00:16:29,350 --> 00:16:31,870
with another position that's very similar so that

441
00:16:31,870 --> 00:16:34,870
we're effectively staying invested until it comes back

442
00:16:34,870 --> 00:16:36,230
or whatever and makes its money.

443
00:16:37,070 --> 00:16:39,470
It can stay with that theme or whatever

444
00:16:39,470 --> 00:16:40,150
the goal is.

445
00:16:40,650 --> 00:16:43,650
But you can maybe get some tax benefit

446
00:16:43,650 --> 00:16:44,190
out of that.

447
00:16:44,190 --> 00:16:48,230
So realizing losses with the intention of offsetting

448
00:16:48,230 --> 00:16:49,830
gains can be really valuable.

449
00:16:49,990 --> 00:16:53,230
Russ, we had an interesting conversation yesterday with

450
00:16:53,230 --> 00:16:57,410
a client who came in and mentioned embedded

451
00:16:57,410 --> 00:17:00,450
capital gains that they realized capital gains that

452
00:17:00,450 --> 00:17:02,610
they're carrying forward in their tax return.

453
00:17:02,730 --> 00:17:05,290
Maybe elaborate on what that means and how

454
00:17:05,290 --> 00:17:06,150
that helps.

455
00:17:06,390 --> 00:17:08,670
Yeah, it was actually capital losses, right?

456
00:17:08,670 --> 00:17:09,569
Sorry, did I say gains?

457
00:17:09,569 --> 00:17:13,050
That he had incurred, I think you said

458
00:17:13,050 --> 00:17:16,730
over a decade ago, where he had losses

459
00:17:16,730 --> 00:17:18,810
that he was just carrying and you'd carry

460
00:17:18,810 --> 00:17:19,750
losses indefinitely.

461
00:17:20,089 --> 00:17:23,310
So from the sale of securities that bankrupted

462
00:17:23,310 --> 00:17:24,730
or lost a lot of value and then

463
00:17:24,730 --> 00:17:27,610
you sold them, those losses carry forward indefinitely.

464
00:17:27,850 --> 00:17:29,590
So you can use those to offset gains

465
00:17:29,590 --> 00:17:33,990
in your portfolio and access liquidity in a

466
00:17:33,990 --> 00:17:35,430
tax neutral way.

467
00:17:35,430 --> 00:17:39,530
So it's important to note, if you're working

468
00:17:39,530 --> 00:17:42,470
with our team or a different financial advisor,

469
00:17:42,950 --> 00:17:46,530
it's important to note what those carry forward

470
00:17:46,530 --> 00:17:49,170
losses are so that it can be baked

471
00:17:49,170 --> 00:17:51,230
into the strategy for taxable accounts.

472
00:17:51,550 --> 00:17:53,250
Yeah, I mean, people need to know.

473
00:17:53,730 --> 00:17:54,410
What's that, Jeff?

474
00:17:54,750 --> 00:17:55,510
It's a great point.

475
00:17:55,590 --> 00:17:57,110
And I think if you work with the

476
00:17:57,110 --> 00:17:58,710
same CPA every year, they're going to have

477
00:17:58,710 --> 00:18:01,030
this number loaded up and so they're going

478
00:18:01,030 --> 00:18:01,690
to find it.

479
00:18:01,690 --> 00:18:03,370
But I think if people do their own

480
00:18:03,370 --> 00:18:06,430
taxes, this one might be missed by people.

481
00:18:06,730 --> 00:18:07,970
You know, after a couple of years, they

482
00:18:07,970 --> 00:18:09,870
could forget.

483
00:18:11,210 --> 00:18:11,950
Well, gosh, yeah.

484
00:18:12,010 --> 00:18:12,830
I hope not.

485
00:18:13,130 --> 00:18:14,790
But then that's the kind of thing too

486
00:18:14,790 --> 00:18:16,610
that...

487
00:18:16,610 --> 00:18:18,030
Uncle Sam's not going to put it in

488
00:18:18,030 --> 00:18:18,590
there for you.

489
00:18:18,650 --> 00:18:19,490
No, maybe not.

490
00:18:19,990 --> 00:18:22,290
So it's one of those instances where it's

491
00:18:22,290 --> 00:18:25,730
important to remember and important to communicate to

492
00:18:25,730 --> 00:18:27,890
who you work with if you're having help

493
00:18:27,890 --> 00:18:30,790
with your portfolio so that they can be,

494
00:18:31,370 --> 00:18:35,250
instead of restricted by trying to mitigate tax

495
00:18:35,250 --> 00:18:40,010
implications, there might be opportunities they can reset

496
00:18:40,010 --> 00:18:43,890
without having to worry about those gains that

497
00:18:43,890 --> 00:18:45,890
might limit what they'd otherwise do.

498
00:18:47,050 --> 00:18:48,970
There's also worth carrying...

499
00:18:48,970 --> 00:18:49,330
Oh, sorry.

500
00:18:49,510 --> 00:18:51,050
Can you share what we do for our

501
00:18:51,050 --> 00:18:51,430
clients?

502
00:18:52,710 --> 00:18:53,810
With regard to this?

503
00:18:53,870 --> 00:18:55,470
Yeah, we usually try to have a tax

504
00:18:55,470 --> 00:18:55,910
budget.

505
00:18:55,910 --> 00:18:59,970
And as a default, with what we think

506
00:18:59,970 --> 00:19:02,590
is reasonable, is we usually set a tax

507
00:19:02,590 --> 00:19:07,030
budget around 5% of the taxable portfolio

508
00:19:07,030 --> 00:19:10,490
value as how much we'd consider having in

509
00:19:10,490 --> 00:19:12,990
gains realized in a given year.

510
00:19:13,610 --> 00:19:15,830
And that means for most people, that might

511
00:19:15,830 --> 00:19:19,630
be about a 1% tax consequence relative

512
00:19:19,630 --> 00:19:21,130
to the size of their portfolio.

513
00:19:22,010 --> 00:19:24,070
But that can still be justified.

514
00:19:24,070 --> 00:19:26,570
Sometimes you'd say, well, just buy and hold,

515
00:19:26,710 --> 00:19:27,270
never sell.

516
00:19:27,690 --> 00:19:29,390
But there are times when either that will

517
00:19:29,390 --> 00:19:31,610
get you out of balance where your allocation

518
00:19:31,610 --> 00:19:35,470
gets too concentrated in a particular name, too

519
00:19:35,470 --> 00:19:38,350
concentrated in a particular industry, maybe too much

520
00:19:38,350 --> 00:19:38,910
equities.

521
00:19:39,630 --> 00:19:41,710
And so you do need to trim and

522
00:19:41,710 --> 00:19:42,590
make some adjustments.

523
00:19:42,870 --> 00:19:45,650
And periodically, a thesis can change.

524
00:19:45,750 --> 00:19:48,990
Oh, I want to rebalance to change the

525
00:19:48,990 --> 00:19:53,610
weight of my allocations for a particular industry.

526
00:19:54,950 --> 00:19:57,790
Broadly, maybe the risks in the market look

527
00:19:57,790 --> 00:20:00,190
different or more attractive, less attractive at a

528
00:20:00,190 --> 00:20:00,990
given moment in time.

529
00:20:01,110 --> 00:20:05,010
And these things create turnover that can create

530
00:20:05,010 --> 00:20:05,950
some tax consequence.

531
00:20:06,070 --> 00:20:07,650
So on the one hand, we want to

532
00:20:07,650 --> 00:20:12,430
be deliberate and not excessive with these taxes.

533
00:20:12,550 --> 00:20:15,270
But at the same time, we want to

534
00:20:15,270 --> 00:20:18,310
be proactive and managing.

535
00:20:18,310 --> 00:20:22,090
And so we try to find a balance

536
00:20:22,090 --> 00:20:23,530
and we set a budget.

537
00:20:23,690 --> 00:20:26,070
Different people have different willingness for that budget.

538
00:20:26,210 --> 00:20:28,790
So we tailor it to what someone asks

539
00:20:28,790 --> 00:20:29,130
for.

540
00:20:29,850 --> 00:20:32,190
But when we have that kind of flexibility,

541
00:20:32,210 --> 00:20:34,550
it can open up more freedom to say,

542
00:20:34,730 --> 00:20:38,710
ah, this position's really just too, it's grown

543
00:20:38,710 --> 00:20:39,910
so much, it's too large.

544
00:20:39,970 --> 00:20:41,130
We'd like to change it.

545
00:20:41,610 --> 00:20:44,970
But we don't want to be burdened by

546
00:20:44,970 --> 00:20:45,830
too much tax.

547
00:20:45,830 --> 00:20:48,850
Well, if we had some carry forward losses

548
00:20:48,850 --> 00:20:50,790
that we could make use of, all the

549
00:20:50,790 --> 00:20:51,130
better.

550
00:20:52,110 --> 00:20:53,110
So-called, right?

551
00:20:53,230 --> 00:20:55,290
You know, I mean, rather have not losses.

552
00:20:55,430 --> 00:20:56,810
But if you have them, you'd rather use

553
00:20:56,810 --> 00:20:56,950
them.

554
00:20:57,590 --> 00:20:59,390
It's also important to know that if you

555
00:20:59,390 --> 00:21:01,490
have those losses, you do get to apply

556
00:21:01,490 --> 00:21:02,710
a little bit of that each year.

557
00:21:02,810 --> 00:21:05,910
$3,000 can be a deduction off your

558
00:21:05,910 --> 00:21:07,350
numbers each year.

559
00:21:07,510 --> 00:21:10,650
So even if you're not using it for

560
00:21:10,650 --> 00:21:12,890
offsetting capital gains, you have the benefit of

561
00:21:12,890 --> 00:21:14,850
some tax advantage.

562
00:21:15,970 --> 00:21:18,930
Taxable accounts, we're looking for those tax lost

563
00:21:18,930 --> 00:21:21,250
opportunities all the time.

564
00:21:21,810 --> 00:21:22,830
That's right.

565
00:21:22,910 --> 00:21:23,750
That's right.

566
00:21:25,830 --> 00:21:28,290
We do that ongoing, to your point.

567
00:21:28,510 --> 00:21:29,350
For clients, right.

568
00:21:30,070 --> 00:21:31,970
And a lot of times you hear about

569
00:21:31,970 --> 00:21:33,630
advisors talking about it at year end.

570
00:21:34,290 --> 00:21:37,970
It's something people are most mindful about, very

571
00:21:37,970 --> 00:21:41,330
mindful, at the end of the year.

572
00:21:41,330 --> 00:21:46,730
But they also are not recognizing that oftentimes

573
00:21:46,730 --> 00:21:49,530
the opportunities for these happen throughout the year.

574
00:21:49,790 --> 00:21:52,410
And so we try to pay attention to

575
00:21:52,410 --> 00:21:56,030
that as we go when we're managing accounts.

576
00:21:56,530 --> 00:21:58,570
Some other things that are just general stuff

577
00:21:58,570 --> 00:22:00,430
that was in the Barron's topic that I

578
00:22:00,430 --> 00:22:03,330
thought was worth reminding you about is be

579
00:22:03,330 --> 00:22:06,570
aware of mutual funds tend to have capital

580
00:22:06,570 --> 00:22:08,390
gains distributions at the end of the year.

581
00:22:08,390 --> 00:22:11,750
So try to avoid buying into those because

582
00:22:11,750 --> 00:22:15,750
that's just a bad tax planning when it's

583
00:22:15,750 --> 00:22:17,570
a non-IRA account.

584
00:22:17,670 --> 00:22:19,110
If it's in an IRA, it really doesn't

585
00:22:19,110 --> 00:22:22,190
matter, just the way the whole thing works.

586
00:22:22,290 --> 00:22:24,470
But when it's in a non-IRA, a

587
00:22:24,470 --> 00:22:27,890
joint account, a individual trust, whatever, then you

588
00:22:27,890 --> 00:22:31,950
get some unneeded tax drag that you could

589
00:22:31,950 --> 00:22:32,270
avoid.

590
00:22:33,370 --> 00:22:36,910
For people who have the ability to control

591
00:22:36,910 --> 00:22:39,410
when they receive income, this time of year

592
00:22:39,410 --> 00:22:40,450
is a good time of year to try

593
00:22:40,450 --> 00:22:45,330
to defer bonuses if you want to push

594
00:22:45,330 --> 00:22:46,570
them into a future year.

595
00:22:46,750 --> 00:22:50,930
You might also be in a position where

596
00:22:50,930 --> 00:22:53,590
you have the ability to bring forward expenses

597
00:22:53,590 --> 00:22:55,930
if you control your business.

598
00:22:56,750 --> 00:22:59,090
These are things to be thinking about.

599
00:23:00,750 --> 00:23:03,330
When you have a retirement plan at work,

600
00:23:03,710 --> 00:23:07,110
have you maxed out your ability to at

601
00:23:07,110 --> 00:23:12,170
the minimum capture all of your employer's match

602
00:23:12,170 --> 00:23:14,230
at a maximum?

603
00:23:14,470 --> 00:23:17,130
Could you possibly do as much as is

604
00:23:17,130 --> 00:23:21,310
allowed into your plan and do that savings?

605
00:23:21,690 --> 00:23:24,410
Again, many plans these days allow you to

606
00:23:24,410 --> 00:23:29,310
do either tax-deferred savings or Roth-type

607
00:23:29,310 --> 00:23:29,910
savings.

608
00:23:30,190 --> 00:23:33,650
So you've got choices potentially there.

609
00:23:35,430 --> 00:23:37,990
If you have your own business, a little

610
00:23:37,990 --> 00:23:41,390
side gig, maybe you could do an individual

611
00:23:41,390 --> 00:23:45,170
retirement account of some kind, an individual 401k,

612
00:23:45,850 --> 00:23:48,630
a SEP, or simple IRA, whatever might be

613
00:23:48,630 --> 00:23:49,870
befitting your needs.

614
00:23:50,870 --> 00:23:53,230
Think about your medical expenses.

615
00:23:53,490 --> 00:23:55,190
If you've had a lot of medical expenses

616
00:23:55,190 --> 00:23:57,690
this year, it might be worth trying to

617
00:23:57,690 --> 00:23:59,850
gather that up and tally some of that

618
00:23:59,850 --> 00:24:03,010
to plan for maybe you do that dental

619
00:24:03,010 --> 00:24:03,630
work plan.

620
00:24:03,630 --> 00:24:05,910
This year before the end of the year,

621
00:24:06,470 --> 00:24:10,790
or whatever, get those hearing aids or fill

622
00:24:10,790 --> 00:24:11,350
in the blank.

623
00:24:12,590 --> 00:24:17,030
Because if your medical expenses exceed 7.5

624
00:24:17,030 --> 00:24:19,930
% of your adjusted gross income, they might

625
00:24:19,930 --> 00:24:22,330
be something you'd prefer to take a deduction

626
00:24:22,330 --> 00:24:25,490
on depending on the size and scale relative

627
00:24:25,490 --> 00:24:27,830
to the individual standard deduction.

628
00:24:29,090 --> 00:24:30,110
What else?

629
00:24:30,110 --> 00:24:31,930
Consider Roth conversions.

630
00:24:32,070 --> 00:24:34,570
As we were talking about, bringing some of

631
00:24:34,570 --> 00:24:36,990
that income forward sometimes makes sense.

632
00:24:37,590 --> 00:24:39,510
It may be that you actually take the

633
00:24:39,510 --> 00:24:42,070
money and take it out of the retirement

634
00:24:42,070 --> 00:24:42,410
plan.

635
00:24:42,770 --> 00:24:44,790
Maybe instead you just do a Roth conversion.

636
00:24:44,950 --> 00:24:46,010
You keep it in the plan.

637
00:24:46,470 --> 00:24:48,690
It stays growing, in this case tax-free,

638
00:24:49,090 --> 00:24:51,190
but you pay whatever income tax you need

639
00:24:51,190 --> 00:24:51,570
to pay.

640
00:24:51,850 --> 00:24:53,450
Things in that instance you have to be

641
00:24:53,450 --> 00:24:55,770
mindful of or aware of is there's got

642
00:24:55,770 --> 00:24:57,250
to be some money to pay the tax.

643
00:24:57,250 --> 00:25:03,070
If you're all tax-deferred sources and you

644
00:25:03,070 --> 00:25:07,170
don't have much in your non-IRA bucket,

645
00:25:08,750 --> 00:25:10,570
you might have a challenge with that.

646
00:25:10,870 --> 00:25:12,470
Those are a couple of additional things.

647
00:25:12,570 --> 00:25:14,310
What else do we have in this other

648
00:25:14,310 --> 00:25:15,690
article that we might want to hit on?

649
00:25:15,770 --> 00:25:16,830
There's a number of things.

650
00:25:17,290 --> 00:25:18,730
Maybe estate tax changes.

651
00:25:19,490 --> 00:25:21,170
Yeah, there's a big change in the estate

652
00:25:21,170 --> 00:25:21,550
tax.

653
00:25:21,630 --> 00:25:23,710
That was one of the headlines of the

654
00:25:23,710 --> 00:25:25,210
article.

655
00:25:25,210 --> 00:25:30,670
The new $15 million permanent exemption and $30

656
00:25:30,670 --> 00:25:31,710
million for a couple.

657
00:25:31,950 --> 00:25:33,970
Of course, you still have Massachusetts where you

658
00:25:33,970 --> 00:25:35,710
guys are to have to deal with, but

659
00:25:35,710 --> 00:25:37,770
is that up to $2 million now?

660
00:25:38,010 --> 00:25:43,930
$2 million, you have without an estate tax,

661
00:25:44,070 --> 00:25:47,450
but over $2 million is potentially exposed to

662
00:25:47,450 --> 00:25:48,250
an estate tax.

663
00:25:48,630 --> 00:25:50,450
In the Sunshine State, where I happen to

664
00:25:50,450 --> 00:25:52,650
be, we don't have that problem.

665
00:25:53,110 --> 00:25:54,510
We don't have those.

666
00:25:55,230 --> 00:25:58,390
That's why people retire to Florida.

667
00:25:59,170 --> 00:26:00,790
Well, it is one of the reasons.

668
00:26:01,030 --> 00:26:03,770
The Ethel Kennedy case was a famous one.

669
00:26:05,190 --> 00:26:07,190
Yeah, share a little more.

670
00:26:07,850 --> 00:26:11,900
Do you want to share a little more

671
00:26:11,900 --> 00:26:12,440
about that?

672
00:26:12,840 --> 00:26:13,820
The Ethel Kennedy case?

673
00:26:13,980 --> 00:26:14,120
Yeah.

674
00:26:16,620 --> 00:26:22,020
She became a legal resident of Florida and

675
00:26:22,020 --> 00:26:25,360
there was some news whether or not she

676
00:26:25,360 --> 00:26:27,700
was a resident of Florida and the tax

677
00:26:27,700 --> 00:26:32,300
difference between dying in Florida versus the tax

678
00:26:32,300 --> 00:26:34,860
difference of dying in Massachusetts was significant for

679
00:26:34,860 --> 00:26:35,420
her state.

680
00:26:35,720 --> 00:26:37,060
Yeah, exactly.

681
00:26:37,780 --> 00:26:39,820
So you can understand why people want to

682
00:26:39,820 --> 00:26:40,020
do that.

683
00:26:40,080 --> 00:26:41,880
We have a client going through that right

684
00:26:41,880 --> 00:26:43,240
now, changing their residency.

685
00:26:43,880 --> 00:26:48,500
They have residences in both states and making

686
00:26:48,500 --> 00:26:49,340
that change.

687
00:26:49,340 --> 00:26:51,600
As we learned when we were talking to

688
00:26:51,600 --> 00:26:55,080
Marcia, there's some, Marcia Mantel, when we were

689
00:26:55,080 --> 00:26:57,880
talking about Medicare, there are some differences in

690
00:26:57,880 --> 00:27:01,440
how that works between states.

691
00:27:02,520 --> 00:27:02,960
Absolutely.

692
00:27:03,660 --> 00:27:07,380
So don't just do it because, but if

693
00:27:07,380 --> 00:27:08,960
you do spend more time in Florida and

694
00:27:08,960 --> 00:27:11,640
own a home here and they do make

695
00:27:11,640 --> 00:27:13,120
you go through some hoops to become a

696
00:27:13,120 --> 00:27:13,400
resident.

697
00:27:13,580 --> 00:27:15,500
It's not just, you can't just self-declare

698
00:27:15,500 --> 00:27:15,700
it.

699
00:27:15,940 --> 00:27:18,320
You have to do some things.

700
00:27:18,320 --> 00:27:19,460
You have to file some paperwork.

701
00:27:19,640 --> 00:27:20,720
You have to get a driver's license.

702
00:27:20,840 --> 00:27:21,820
You have to register your car.

703
00:27:22,080 --> 00:27:23,580
You have to register to vote and so

704
00:27:23,580 --> 00:27:23,900
forth.

705
00:27:24,720 --> 00:27:26,900
There's a number of things and I think

706
00:27:26,900 --> 00:27:30,840
best practice and attorneys could be probably help

707
00:27:30,840 --> 00:27:31,140
you.

708
00:27:31,300 --> 00:27:33,020
Your estate planning attorney could probably help you

709
00:27:33,020 --> 00:27:34,720
navigate this, what the rules are.

710
00:27:34,780 --> 00:27:36,660
But I think you kind of have to

711
00:27:36,660 --> 00:27:40,940
track, so you can justify how often you

712
00:27:40,940 --> 00:27:45,260
were in the state or, and ultimately you

713
00:27:45,260 --> 00:27:46,940
want it to be less than six months

714
00:27:46,940 --> 00:27:47,840
and some days.

715
00:27:47,840 --> 00:27:48,440
I don't remember.

716
00:27:48,640 --> 00:27:50,700
Yeah, it's not, it's not a legal requirement,

717
00:27:50,860 --> 00:27:52,640
but that is a common suggestion to keep

718
00:27:52,640 --> 00:27:55,440
a calendar, you know, and so you could,

719
00:27:55,560 --> 00:27:57,920
if you had to defend yourself, it's basically

720
00:27:57,920 --> 00:27:59,720
where your intent is and, you know, where

721
00:27:59,720 --> 00:28:01,000
you do those important things.

722
00:28:01,120 --> 00:28:03,800
But if your estate's big enough, they're probably

723
00:28:03,800 --> 00:28:04,600
going to challenge it.

724
00:28:05,060 --> 00:28:05,500
Yeah.

725
00:28:05,580 --> 00:28:07,940
And it's important to remember too, that people

726
00:28:07,940 --> 00:28:12,100
who have some wealth in Massachusetts, say a

727
00:28:12,100 --> 00:28:17,120
residence, it's not that you'll not have any

728
00:28:17,120 --> 00:28:20,280
Massachusetts estate tax exposure.

729
00:28:20,860 --> 00:28:23,560
It's that you'll be limited to the wealth

730
00:28:23,560 --> 00:28:26,500
that's in Massachusetts for that exposure.

731
00:28:26,840 --> 00:28:29,580
So, you know, if your home was worth

732
00:28:29,580 --> 00:28:32,500
more than $2 million, well, you still might

733
00:28:32,500 --> 00:28:34,600
have an estate tax in Massachusetts, but if

734
00:28:34,600 --> 00:28:37,560
your estate was worth 5 million, but your

735
00:28:37,560 --> 00:28:40,740
house was worth, you know, 1 million, well,

736
00:28:40,900 --> 00:28:43,220
you know, you'd be in a different situation

737
00:28:43,220 --> 00:28:47,140
where you might have some exposure, but it's

738
00:28:47,140 --> 00:28:49,040
more modest by comparison.

739
00:28:49,800 --> 00:28:51,220
Certainly if you live in two states, make

740
00:28:51,220 --> 00:28:55,480
sure that someone who's really experienced in both

741
00:28:55,480 --> 00:28:58,260
states crafts here a state plan because there's

742
00:28:58,260 --> 00:29:01,060
requirements, although we have a uniform probate code,

743
00:29:01,200 --> 00:29:03,320
there's still state specific requirements.

744
00:29:03,320 --> 00:29:04,860
So you don't want to get it wrong

745
00:29:04,860 --> 00:29:07,460
by having the laws of one state that

746
00:29:07,460 --> 00:29:09,620
conflict with some laws of the other state.

747
00:29:09,680 --> 00:29:11,260
And that is the case for Massachusetts and

748
00:29:11,260 --> 00:29:11,580
Florida.

749
00:29:12,160 --> 00:29:12,260
Yeah.

750
00:29:12,340 --> 00:29:14,180
When we moved, we had to do some

751
00:29:14,180 --> 00:29:17,060
revisions because of specific Florida statutes to make

752
00:29:17,060 --> 00:29:18,360
sure we were in compliance.

753
00:29:18,740 --> 00:29:18,920
Yep.

754
00:29:19,240 --> 00:29:21,480
Even just how many witnesses and things like

755
00:29:21,480 --> 00:29:22,300
that can...

756
00:29:22,300 --> 00:29:22,720
Yeah, that too.

757
00:29:23,260 --> 00:29:23,940
It's a basic thing.

758
00:29:24,380 --> 00:29:25,740
I'll just put in a little plug.

759
00:29:25,820 --> 00:29:28,020
My brother Keats is an estate planning attorney,

760
00:29:28,300 --> 00:29:29,180
Boyd & Boyd, PC.

761
00:29:29,460 --> 00:29:29,960
Best in the business.

762
00:29:29,960 --> 00:29:34,420
They are very familiar with the Florida residency

763
00:29:34,420 --> 00:29:36,900
and all that goes into that and how

764
00:29:36,900 --> 00:29:39,120
the impact on an estate plan can be

765
00:29:39,120 --> 00:29:39,540
affected.

766
00:29:39,880 --> 00:29:42,500
So in any case, if you need help,

767
00:29:42,640 --> 00:29:45,440
certainly there's lots of great people to reach

768
00:29:45,440 --> 00:29:45,760
out to.

769
00:29:46,040 --> 00:29:48,000
With that, we're going to wrap up this

770
00:29:48,000 --> 00:29:50,340
episode and thank you for being with us.

771
00:29:50,780 --> 00:29:53,120
Hopefully if you need any help when you're

772
00:29:53,120 --> 00:29:55,480
thinking about whether it's these kinds of issues

773
00:29:55,480 --> 00:29:59,460
at year end, whether it's the complicated continuity

774
00:29:59,460 --> 00:30:03,980
of planning across taxes, estate planning, portfolio management,

775
00:30:04,280 --> 00:30:06,760
financial planning of various considerations.

776
00:30:08,180 --> 00:30:09,720
Hopefully you have someone you're working with that

777
00:30:09,720 --> 00:30:11,060
does a great job with this, but if

778
00:30:11,060 --> 00:30:12,880
not, we would love to be part of

779
00:30:12,880 --> 00:30:13,300
your team.

780
00:30:13,420 --> 00:30:15,060
So don't hesitate to reach out to us.

781
00:30:15,520 --> 00:30:18,420
Until next time, keep striving for something more.

782
00:30:19,200 --> 00:30:21,040
Thank you for listening to Something More with

783
00:30:21,040 --> 00:30:21,760
Chris Boyd.

784
00:30:21,760 --> 00:30:24,220
Call us for help, whether it's for financial

785
00:30:24,220 --> 00:30:28,140
planning or portfolio management, insurance concerns, or those

786
00:30:28,140 --> 00:30:30,180
quality of life issues that make the money

787
00:30:30,180 --> 00:30:31,280
matters matter.

788
00:30:31,660 --> 00:30:34,920
Whatever's on your mind, visit us at somethingmorewithchrisboyd

789
00:30:34,920 --> 00:30:38,100
.com or call us toll-free at 866

790
00:30:38,100 --> 00:30:41,780
-771-8901.

791
00:30:41,920 --> 00:30:45,660
Or send us your questions to amr-info

792
00:30:45,660 --> 00:30:47,600
at wealthenhancement.com.

793
00:30:47,780 --> 00:30:49,720
You're listening to Something More with Chris Boyd

794
00:30:49,720 --> 00:30:52,120
Financial Talk Show, where wealth enhancement advisory services

795
00:30:52,120 --> 00:30:54,340
and Jay Christopher Boyd provide investment advice on

796
00:30:54,340 --> 00:30:56,040
an individual basis to clients only.

797
00:30:56,240 --> 00:30:58,180
Proper advice depends on a complete analysis of

798
00:30:58,180 --> 00:30:59,360
all facts and circumstances.

799
00:30:59,680 --> 00:31:01,460
The information given on this program is general

800
00:31:01,460 --> 00:31:03,500
financial comments and cannot be relied upon as

801
00:31:03,500 --> 00:31:05,080
pertaining to your specific situation.

802
00:31:05,300 --> 00:31:07,260
Wealth Enhancement Group cannot guarantee that using the

803
00:31:07,260 --> 00:31:09,260
information from this show will generate profits or

804
00:31:09,260 --> 00:31:10,380
ensure freedom from loss.

805
00:31:10,580 --> 00:31:12,740
Listeners should consult their own financial advisors or

806
00:31:12,740 --> 00:31:14,840
conduct their own due diligence before making any

807
00:31:14,840 --> 00:31:15,600
financial decisions.